Nasdaq-listed Verisk intends to merge the UK-founded firm with Jornaya, a Pennsylvania-founded consumer insights platform it bought back in December 2020.
The deal, the financial details of which were not disclosed, will see both firms offer insights into buyer journeys across the UK and the EU.
Set up in September 2019 by Alain Desmier and Mike Laming, Contact State has focused on preventing fraudulent data practices among lead generation firms.
The firm's technology produces independent certificates which record and secure consumer consent throughout a customer’s journey.
It works with product providers, financial intermediaries and performance marketing agencies in the life insurance, health insurance and mortgage sectors.
Mike Laming, Contact State’s chief technical officer, said the firm has already made “a much higher standard for consumer data exchange” for its clients and partners.
He continued: “The Contact State vision has always been to become an essential part of European performance marketing infrastructure and joining Verisk takes us a step closer to that goal.”
The firm’s decision to merge with Jornaya will help it better target customers with “the most relevant and timely interactions”, it said in a release published yesterday (7 September).
Alain Desmier, Contact State’s co-founder and managing director, said the firm had been “finding a way through the commercial turbulence caused by the pandemic”, which hit the UK just seven months after the firm launched.
But despite the “turbulence”, Rob Rokoff - a senior vice president at Jornaya - said: “[Contact State’s] progress in such a short space of time has been remarkable.”
Both firms share the same ambition, which is to create a global industry standard for consumer consent, according to Rokoff.
He added: “This acquisition represents a natural evolution of our business, and as Contact State and Jornaya learn and grow from each other, we will help make the marketing ecosystem increasingly transparent and efficient for consumers and our customers.”
Solving an industry problem
Lead generation has been a long-running issue in the UK.
The Financial Conduct Authority closed a consultation almost a year ago, around changes to the rules regarding financial promotions.
But it is yet to publish its conclusions, which means many advisers are still vulnerable to fraudulent providers.
Protection advisers told FTAdviser back in June they fear the 'mortgage protection gap' is exposing them to “a wild west” of unregulated parties.
There is a consensus in the industry that mortgage-focused advisers fear mentioning a complicated product like protection will scare away clients, hence protection-only advisers struggle to source direct referrals.
This means they have to rely on unregulated lead generators to reach customers.
At the same time the pandemic caused a surge in protection interest from consumers, which is why there are "more unregulated third-party lead providers than ever", Charlotte Nixon, proposition director at adviser network Quilter Financial Planning, said in June.
She said: "More people are googling protection due to Covid-19, which means these firms are looking to sell leads at more expensive prices. Cost per lead is going up. There's a lot more competition in this space, which makes it quite an expensive space for advisers to be in.”
She continued: “It’s a bit of a wild west. There’s no real regulation. Clients’ data can be sold multiple times. It can be fraudulent, but advisers get charged for it anyway. Advisers are regulated, but lead generation firms aren’t.”
Advisers have also highlighted the barriers they face in terms of carrying out their own effective marketing, and the quality of leads provided by generation firms - even if they are regulated.
ruby.hinchliffe@ft.com
