Online lead generation is a growing segment of the online advertising and marketing arenas.

According to the Interactive Advertising Bureau, online lead generation refers to "fees advertisers pay to online companies that refer qualified purchase inquiries ... or provide consumer information (demographic, contact, behavioral) where the consumer opts into being contacted by a marketer."

"These processes are priced on a performance basis (such as a cost-per-action, -lead or -inquiry), and can include user applications (such as for a credit card), surveys, contests, sweepstakes or registrations," the IAB explains.

But the practice also is under scrutiny from privacy pundits. In particular, they believe the biggest problems stem from the sharing of consumer data among third parties without reporting this to customers, as well as the highly complex and hard-to-find privacy statements that allow this practice to go on.

eM+C asked Bill Mahoney, chief privacy officer for Prospectiv, a Woburn, Mass.-based company that provides customer acquisition, e-mail marketing and data analytics solutions to leading consumer brand marketers, to offer some best practices for companies in the online lead generation space.

They are:
1) Transparency. "Let customers know what they are signing up for. Offer more disclosures on landing pages before someone submits any personally identifiable information like an e-mail address. When you're asking somebody to provide that information, be clear and upfront with what is going to happen."

2) Offer quality leads. "From an online lead generation company's perspective, make sure you are delivering good data to your clients. You can do this through phone and address checking, or by e-mail verification by sending out a confirmation e-mail and tracking bounces. Clients are getting more sophisticated, so they are asking for better data, they are asking for targeted data, and they are tracking their conversion rates so they know how the data that we provide them converts for them compared to how our competitors' data converts for them." In fact, Mahoney says, this could be a best practice for advertisers: "Track the lifetime value of the conversion rates of the leads by source so that you can see where you are getting the best results."

3) Know your clients' audiences. "And target the offers to Web sites that have the same or similar demographic. Also, demand of your affiliates a list of sites where the offers will show up. There are tools you can use to track referring sites through Web logs."