This week I read an article on how Netflix offered a $1 million dollar prize associated with a contest to improve its movie recommendation system by at least 10 percent.

I assume everyone knows who Netflix is and how they work, but in case you don’t it is an online DVD movie rental business. Customers create accounts and pay monthly fees to receive DVDs through the mail. When finished viewing the movie, the customer mails the DVD back to Netflix and Netflix mails out another movie that is on the customer’s movie wish list.

A company with a subscription based business model, Netflix needs to focus on keeping customers signed up with their service to grow their business. The recommendation system is one means to accomplish this. When customers provide feedback on how much they like a movie they rented, the recommendation system provides additional movie suggestions for that customer. If the recommendation system works and accurately suggests new movies to the customer that they might not have known about, then the customer is more likely to continue with their subscription.

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There are four primary advertising campaigns used to generate Internet leads. These include:

1. Pay Per Click
2. Organic Search
3. Display Advertising
4. Email Marketing

Pay per click
In this model advertisers generate leads typically by purchasing keyword phrases on search engines such as Google, Yahoo, and Microsoft. When consumers look for a service and enter in the purchased phrase in the search field, the ad from the direct marketer shows up within a paid search section on the page. The advertiser pays the search engine a fee each time the listing is clicked.

For Google, this is generally the top three placements on a page or additional listing on the right side of the page. Consumers who click on these pages are taken to a web page created by the advertiser where they are encouraged to enter their information to be contacted about the service they are interested in.

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Moderator, Alex Baydin, CEO of PerformLine, led a second-day 2009 LeadsCon panel discussion on lead quality with speakers:

• Dave Wengel, GM of Interactive Markets at TARGUSinfo
• David Sobie, VP of Marketplaces at LeadPoint
• Matt Wise, CEO of Q Interactive
• David Dowhan, SVP of Online Markets at eBureau

The discussion began with each panelist defining quality.

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