[JayBallentine]

This word, consolidation has been uttered amongst insiders relative to the future of the industry.

$2.7BN in VC Capital is presently out in 1,300 finance / business finance related start-ups.

This number has been increasing year over year... So it's kind of like a Tsunami is on the horizon because not only are threats from outside of the industry going to make it tough to compete, but the fierce competition for leads right now are driving up costs of customer acquisition across the board.

I think a funder posted here that he started out spending $5 on Google and eventually got to $15, next year is going to be the opposite of Christmas in PPC.

So... I've been sitting around thinking about this, like; "what would I do if I were a funder?" I have fun with these sorts of things, probably too much. lol

Anyway, I came up with the most ridiculous idea / thought you guys may have heard in your lives, but follow me...

Funders who spend significant sums of money in PPC should sell each other their leads.

No, I haven't been drinking too much of the brown water, let me explain.

If the average click for a premium placement costs $20, AND your conversion rate is 40% (Holy Grail), then your average cost per lead is $50. If only 1 in 10 of the those leads convert to a sale (within a set time period), then your average cost per sale is $500.

We all know merchant shop around, and that only 2% buy from the first place they arrive at. So, by selling a competitor and now collaborator the 9 (QUALIFIED) leads that never converted to a sale, puts you both in a position to get what is essentially 2 customers for the price of 1.

I think this is pretty cool because it's a way of striking back at Google. Google's leverage in setting these auction prices lies in the fact that you guys are engaged in a slugfest. You start collaborating across the board, PPC prices go down across the board.

Clearly, this is the type of deal that would have to be made between guys that knew and trusted each other. But, if I were paying a crap load in PPC, it's one of those deals I'd certainly go out and try to make...

I have been brainstorming a bunch of ways guys can collaborate I've probably taken up too much of your time as it is!

[Sean Cash]

Even if your conversion rate on a click was 40%, the vast majority of conversions are from people who don't have businesses. The amount of people trying to start a business is astounding.

[JayBallentine]

I definitely agree. I don't think anyone is getting 40% - though they could. They could outsource it to start-ups who do this. There are firms who will have an army of experts optimize the crap out of your PPC assets for money later.

In other words, if they don't save you money, they don't make any money. That simple.

A while back, I took a clients' old stuff, and with a partner turned what one would perceive as trash - into treasure. Keep in mind, this client spent a ton on PPC. I'll have another post about "old leads" soon, but that was the genesis of this "brain fart."

I recently got back deep into the trenches recently myself... Working deals, generating leads, etc. I'm glad I did. I found quickly that leads 30 - 45 days old performed pretty well. In speaking with merchants who all invariably play games, I found that some (I wish I knew a precise percentage), went to the next guy just to save face. If you gave me an option; "Jay we are going to now fund Real Estate Agents who are barely getting by, and we guarantee 100% approval, or, you can work our leads from 30 days ago." I'm choosing the leads form 30 days ago. Those leads from 30 days ago are educated, jaded, and in prime position for me to close them if I approach them right.

For instance, you quote a guy 1.38, he says "screw you", I quote him 1.38, he says screw me, and then he goes to Joe ISO who quotes him 1.38, he says "aww hell, I'll sign." I want the guy who's willing to say "aww hell I'll sign" over any instant Google ad - period.

So, based on my empirical observations, I know that if two guys sat down and came to an agreement on a unified code, and agreed framework there's value to be exchanged.

It starts with campaign construction, on to lead management. If two guys agree on mirroring each others; PPC optimization - by outsourcing it to Silicon Valley, on page optimization, and lead response management, that establishes a solid control, in as much as both guys who are spending a bazillion are basically casting a wide net anyway.

So yes, I'd be buying a guys start-up leads from a purely mathematical perspective. However, there's surely to be an "aww hell I'll sign" lead in there as well.

Mind you, this can all be micro tested... Never go gung ho without testing.