Lead generation does not work. Or does it?

This morning I was sifting through some unread RSS feeds and I stumbled upon this nice post from Paul Fisher.

It’s basically a constructive argument about the inadequacy of CPA and lead-generation models under various point of views. The full article is here.

I tend to agree with the general argument but I’d raise 2 points around a short paragraph, where Paul says:

The last click before a purchase is not the reason why that purchase was made. Intuitively this makes sense: I am personally more likely to click on an ad for Dixons than I am for ABC Online electrics ltd. This is a result of 20 years of brand-building from Dixons.
The question then becomes: why should I pay a lead-gen fee or CPA to an affiliate if they have not done the work?

First off you don’t necessarily have to be the “last click” to get paid. Or, better, you could easily be among the last redirections to Dixons (I’ll use Dixons as a synonym of any merchant) and still get a revenue share. Every affiliate program offers a cookie of 30/60 days on average, therefore you can drive a user to Dixons and get paid for a future purchase (under certain circumstances of course). It’s basically what Paul refers to when he quote DoubleClick’s “view-throughs”.
Let’s use Veedow as an example. Even if our user goes to Dixons thorough Veedow and he doesn’t make any purchase today, chances are that he will go back straight to Dixons (or also through a natural result on Google) and if it does within the cookie’s time frame will generate money for your site. Even better, that person might have seen a vacuum on your site and end up buying a washing machine and a flat screen TV… you “risk” to get a commission for all that stuff.

This leads me to the second point. Paul wonders why should I (say, Veedow) get paid if I haven’t done the work (Dixons brand-building in the example). Well, the way I see it is that Dixons and all the other merchants are paying for traffic, eyeballs and potential customers. So they’ve done only half of the job building their brand. Also, after 18 months spent working with Affiliate Networks what is quite clear is that revenue share levels reflect not only the merchant’s business (technology has very low margins and pays 1.5 to 3% on average, while furniture could easily go up to 15-20% and fashion is in the range of 8-15%) but also its brand weight. So the Net-a-porter of all industries pays a lot less than the less know brands, therefore paying back the investments done to raise their brand awareness.

One last point about this topic and Veedow. As Paul says referring to Moveme.com:

[...] a great web app will act as a “noise reduction agent” to cut through the advertising clutter.

I completely agree with him on this and the necessity to better connect users to products, services and brands. One of the main goals here at Veedow is to bridge the gap between products and people, allowing our users to discover great new stuff they would have hardly found otherwise. And the reason of that is simple, probably these people didn’t even know that they fancied something and without the right tip, the right recommendation, they wouldn’t have enough motivation to search for that thing. Veedow inspires you and - as evil as it may sound - it sparks new ideas and needs for great products to buy or desire.

I’d be happy to hear other points of view on this topic, so comments are very welcome.

-Fabio