Pay-Per-Call: A New Avenue for Search Marketers

A special report from the Search Engine Strategies conference, December 13-16, 2004, Chicago, IL.

Yet another 4 million businesses have "brochureware" sites that aren't served by the cost-per-click model, according to Chief Marketing Officer of pay-per-call service provider Ingenio

"Buying clicks isn't for everyone," said Barach during the"Pay-Per-Call, Flat Rate & Other Pricing Alternatives" panel at Search Engine Strategies.

Enter pay-per-call advertising—a tasty new type of online advertising that mixes search functionality and on-the-phone interaction resulting in an appealing marketing opportunity for small-to-medium sized businesses—especially local businesses without a web site.

"Ninety-eight percent of all U.S. businesses don't buy PPC yet—but they all have phones," said Dan Ballister, Vice President of Sales for FindWhat.

From the consumer standpoint, it's much easier to call a local business than rely on email to ask details about pricing, programs and product availability. When your pipes are leaking, and you need to locate a plumber—fast, people will be searching for phone numbers—not relying on email.

"People going online and performing a local search are not 'traditional searchers,'" says Barach. They typically want to talk to someone on the phone."

Dialing in to a pay-per-call campaign

Setting up a pay-per-call campaign is easy. Merchants define their relevant keyterms, choose their desired categories and decide upon the geographic area where they'd like their ad to appear (local, regional or national) From there, they create their ad, containing their company name, address, a short description and a trackable toll-free number which redirects to the advertiser's actual phone number.

"Pay-per-call is an incredibly uncomplicated product," says Ballister. Instead of title, description and URL (a PPC ad format,) the ad lists a title, description and a phone number."

To illustrate the pay-per-call conversion flow, Ballister provided a case study on BizJournals.com, a B2B site showcasing industry news and local business journals across the US. When a prospect clicks on a pay-per-call ad, they are sent to a profile page about the business.

"The landing page provides a simple 'soundbyte' to try to engage the customer and get the call," says Ballister.

Merchants are charged on a CPA basis when someone calls the toll-free number—not when someone clicks-through from the ad. Call tracking information and call pattern statistics are available to the merchant so they can measure results.

"You would be floored by the number of real-time stats," says Barach.

Pay-per-call results are distributed across local search providers, Internet Yellow Pages and vertical directories, according to Barach. AOL is using Ingenio platform for AOL Search and AOL Yellow Pages, as is go2.com. FindWhat is also an Ingenio partner, with their pay-per-call results distributed across partners such as Snap.com and BizJournals.com.

Dialing for dollars equals more qualified local leads

Will demand from small-to-medium sized businesses have the pay-per-call advertising buzz ringing off the hook? Yes, according to both Barach and Ballister.

Because of the high value merchants place on phone leads, they are willing to pay a higher bid price. Pay-per-call rates can range from $2 per call to $20 a call or more, with the bid price depending on the category and ad position.

"Clients value calls over clicks," says Barach.

One reason that clients heavily value phone leads, reports Ballister, is an improved conversion rate. "[Pay-per-call] provides merchants the opportunity to engage customers about their specific needs. Conversions improve when you move from online to on-the-phone."

Although pay-per-call is much more expensive than traditional PPC advertising, the value to early adapters, such as mortgage brokers, credit and debt management companies, mortgage banks, and real estate agents is high. Phone leads allows them to talk to prospects person-to-person, discover their needs and build immediate rapport.

Additionally, small business owners also have an easier time tracking their on-phone conversion rates than their web conversions, according to a 2004 joint study by Ingenio and Jupiter Research. Although 85 percent of small businesses can estimate their phone call conversion rates, they don't have the same clarity regarding their web site conversion rates.

Pay-per-call ringing true for some local small businesses

It's doubtful that pay-per-call completely will replace PPC advertising in the local market. However, pay-per-call does a very specific niche for businesses without a web site, or for businesses that don't have the time, capital or knowledge base for a fully-optimized campaign. These merchants are still able to leverage a web "presence" of sorts (the pay-per-call ad) gaining highly qualified conversions.

For merchants with existing PPC campaigns, pay-per-call provides another smart advertising channel. They can reach motivated prospects who are, as Barach said, "looking for a phone number online, not looking for an experience." That is, some people searching for a real estate agent may want to browse through a site and view listings. Other prospects may simply want to make a call and talk to an agent. Mixing pay-per-call and PPC provides the best of both worlds—letting merchants dial into local search marketing in a whole new way.