Depending on which networks’ distribution lists you are on, you have probably noticed at least one or two major announcements surrounding the online education space from revised marketing policies to all out taking down of offers. Interesting, is one choice of words to describe some of the changes, but what makes this period in the performance marketing landscape so notable are the unrelated threats impacting so many major segments. It’s not just education, but debt, and health. These aren’t the traditional threats - traffic partner changes, price increases for media, or even industry association changes. These are on the highest level - federal. There was an article discussing Wall St.’s love affair with this administration coming to an end. The same could very well end up being true with our space.
Known Legal Threats
Education - We’ve covered the for-profit sector in lengthy detail. Unlike debt, the education sector has known that changes were coming for some time, but what those changes will encompass haven’t been known. Only recently has there been greater clarity regarding how the schools themselves will be held accountable. As we wrote last week, “these rules will dictate what schools must do to be eligible for federal funds. If they aren’t compliant, they won’t receive the fund. No funds, no marketing. No marketing, no leads. Even the slightest changes to the rules could alter how schools buy leads and how many.” Education marketing spending will not be going away, but it will be changing. The real stress for most companies is how they will be able to show growth going forward. It’s looking less like an industry wide decline, spread evenly across all players. Like the stocks of the companies, we will see some traffic suppliers being cut off while others will only experience minor hair cuts. Prediction: 15% fewer leads purchased in 2011. 20% to 25% less in dollar spend.
Debt - Consumer debt relief has been one of the beneficiaries of the now multi-year long recession. Like pay-day loans, it has its shares of detractors, and the detractors appear to be winning at the moment. Industry legal expert Jonathan Pompan, an attorney for Venable LLC in Washington D.C., summarized for us the specific changes in an article he wrote for us at the beginning of August. The highlights focus on that the Federal Trade Commission announced its long-awaited amendments to the Telemarketing Sales Rule (“TSR”), specifically focusing on the sale of “debt relief services.” He writes “Under the Final Rule, virtually all debt relief service providers that promote their services through inbound or outbound telephone calls, including calls arising from lead generators and online advertising, will be subject to a host of new and existing requirements under the TSR – most notably, a ban on advance fees before services are provided and a renewed emphasis on companies that provide ‘substantial assistance.’” No advanced fees means less money for all but the most seasoned to continue buying leads. Prediction: 30% fewer leads purchased in 2011. 50% less in dollar spend.
Health care - Rounding out the trifecta of major legislation is the biggest piece of legislation from the consumer standpoint, health care reform. Talk about an incredibly charged issue. It is so big and so complex, but the shortest interpretation of its impact comes from the attitudes of those who currently sell insurance, the thousands of licensed agents and brokers. That they call the future of medicine Obamacare will give some indication of their attitudes, especially when you realize that it’s not a term of endearment. Like debt, the fall out could be severe. When new portions of the regulation kick-in at the beginning of next year, it will mean only the most seasoned will survive. The upfront fees for debt settlement firms allowed many to purchase leads. Fewer will be able to support the float required. With health insurance, agents are going to see big cuts on the commissions they can make. That alone will drive many out of business and force those already buying to tighten up. Additionally, until guaranteed coverage begins in 2014, we will have a period of uncertainty as people hunt for policies but aren’t aware of the timing of legislation. Prediction: 10% fewer leads purchased. 30% less in dollar spend.
Mostly Dead Is Slightly Alive
There is generally a silver lining in all bad news, and in some respects, that applies here. While certain verticals are most certainly going to experience challenging times ahead, others should recover while newer ones will continue to take off. Refinance is making a comeback, and as the economy recovers (eventually) and rates remain low, we will see the once king of lead gen take a place among the top three. While health insurance might be a challenge, other insurances are going to remain strong. Auto will continue to grow but life insurance and other creative options will see (and have seen) great growth. Senior care is the big unknown. It’s already pretty big, and the question is just how big will it get. The aging demographic along with their increased online literacy is creating a world of opportunity. Their needs are varied, expensive, and interconnected. Matching this demographic with the right goods and services could become the number two sector by the end of next year. Other financial service instruments, such as credit cards, are also going to be on the rebound. So, while there is plenty to lament, there is still enough to keep a few good marketers from switching to mobile apps or social gaming.
Editor
DM Confidential
www.dmconfidential.com
|
Digg 
