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Special Reports
Lead Generation
Trading Platform Open
An open, transparent marketplace for leads.
By Brad Finkelstein
The team behind Root Markets here calls the new company the first financial exchange
for Internet leads.
The firm was founded by its chief executive Seth Goldstein. Lew Ranieri, one of
the best-known names in the mortgage banking business, has joined the company as its chairman.
Expanding further on the exchange concept, Mr. Goldstein said there was not an
open trading platform for lenders to get access to qualified borrowers. Root Markets fulfills that role.
He compared Root to the stock exchange. Without the creation of the stock exchange
there would be a lot of local knowledge but no way to share it, no place to serve as a central clearinghouse. This
is very inefficient, he continued.
Mr. Goldstein compared the lead generation marketplace to the mortgage business
prior to the creation of the mortgage-backed security by Mr. Ranieri. "We are sort of in the early '80s in
the lead generation process, with no securitization feature," he said, continuing that Root is creating a
transparent marketplace for a single source of high-quality leads.
In a statement issued by the company, Mr. Ranieri said, "Root Markets is
the first exchange to marry Wall Street and Madison Avenue. By creating a more efficient Internet lead generation
marketplace with transparent pricing and explicit consumer permission, Root Markets has an opportunity similar
to that which I saw on Wall Street more than 20 years ago in the mortgage market prior to securitization."
The company serves each segment of the market. For example, advertisers can access
a large supply of high-quality consumer leads from one source at a fair price. Today, advertisers must purchase
leads from a variety of suppliers at different prices, with little control over quality.
For publishers it is a place where they can directly sell leads to originators,
Mr. Goldstein said. Currently, publishers have limited visibility or control as to how their inventory is being
monetized by third parties. There are lots of small and midsized companies in the lead generation space, and leads
are a fungible asset, he noted. An example of this is LendingTree.
Investors can access a new market for trading, while consumers can access their
personal data securely and conveniently and share it with third parties for a variety of benefits. Mr. Goldstein
compared such capabilities for consumers as being in a trusted advisor role. As a result, Root provides a level
of credibility, because it is not a lender.
Furthermore, Root recognizes that the ownership of consumer data belongs to the
consumer. It is a 100% opt-in without any incentives system.
Root has offices in New York, San Francisco and Detroit. It recently reached an
agreement to acquire Lead Filter, an auction-based marketplace that matches buyers and sellers of high-quality
mortgage leads. Lead Filter created a marketplace for brokers and lenders to access quality leads in a single exchange.
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