Mobile Plays Role in Lead Gen Battle

In case you’ve stayed away from the web for the Halloween weekend, you have missed a war on lead generation scams programs from TechCrunch editor Michael Arrington.  It all started with the video below, taken from a trade show discussing virtual goods:

If you are not familiar with the industry, the virtual goods space is currently generating hundreds of millions of dollars for lead generation companies such as Tatto media and Offerpal, many times through the distribution of mobile subscription services. If you are on Facebook or MySpace and play social games such as Farmville, no doubt you’ve noticed they give user the ability to upgrade their status in the game by either buying virtual goods or signing up for services. Arrington points out an example mobile scam offer below:

A typical scam: users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they’ve done that, they’ve just subscribed to a $9.99/month subscription. Tatto Media is the company at the very end of the line on most mobile scams, and they flow it up through Offerpal, SuperRewards and others to the game developers.

Stay tuned to see how this battle plays out and whether or not Facebook and MySpace will take action against these programs.