Reply.com just launched a new blog and revealed their new lead exchange. It appears the lead marketplace concept is about to get a bit more competitive, with Reply.com being one of two new entrants that I have heard whispers of emerging.

The concept of a lead exchange seems simple, but I think the challenge is in the execution.

Do They Have What it Takes?

The opportunity to create a more sustainable, less volatile, value-based relationship with your buyer is attractive and certainly increases the defensibility of your business model.

This announcement is intriguing considering my dinner conversation last night with an investment banker in this space. My question was, “what makes an investment/acquisition attractive lead generation company?” He (my simplification) indicated that there a two critical elements:

1. Differentiating efficiency in buying media, traffic generation, and delivery to the buyer, and
2. Value (quality) generated “stickiness” to your buyer base

It seems that Reply.com is putting together these key elements.

There team is proven in lead generation efficiency and further endorsed by people closer to observing that efficiency:

They are extremely efficient acquirers of traffic that they then package for their customers. Venturewire estimates their revenue at $20m annually. I spoke with them last year and they had some very smart thoughts on the transition of the classifieds industry into a performance-based world. (Niki Scevak, August 2005)

And, it seems this new lead exchange could lock up the second element–buyer “stickiness.”

The proof, of course, is in the execution and I think the lead exchange business model is deceptively challenging. I look forward to observing there potential for success.

Other Lead Exchanges to Watch

• LeadPoint
• Root Markets
• Detroit Trading Exchange

Your Thoughts?

What are your opinions on the lead exchange business model within the “lead ecosystem?”