Event: Kelsey Group Drilling Down on Local Search 2005
Session Title: Pay-per-Call: Update from the Field
Session Date: April 19, 2005
Session Time: 4:00 pm – 4:45 pm
Pay-per-call has been received by the press with considerable anticipation and excitement as the product that will demystify online advertising for local business. There are also many potential uses for national advertisers and some intriguing, potential offline uses. Ingenio pioneered the platform and FindWhat formally introduced pay-per-call in September 2004. Citysearch introduced a similar product in early December. Now a major portal has adopted pay-per-call. How have advertisers responded to date? Who’s using pay-per-call, and how far and wide is it likely to penetrate the marketplace?
Marc Barach, CMO, Ingenio
Gerry Campbell, VP & GM, AOL Search & Directional Media
Richard Rosen, VP of Business Development, CallSource
Michael Kerans, SVP/General Manager, FindWhat Pay-Per-Call
Jean-Pascal Lion, VP, Electronic Directories, Yellow Pages Group
Related Posts: buzzhit!’s Drilling Down on Local Search 2005 Index Page
Callsource: manages 150K numbers; provide call data
Q: What’s the reception to a pay-per-call pitch from merchants
Lion: Different forms of ppc; offering it on wireless platform (with callGenie — product named Hello Yellow). Will advertisers pay? Absolutely, though more so in certain categories/headings
Kerans: We have 100K advertisers worldwide. Pricing is well above the cost of a click; clicks are expected to hit $5B. Taking this to direct reponse, which is a $5.2B market. A financial call (national) could go for $150/call.
Rosen: It’s not about advertiser adoption; they already know from print, radio, etc what their cost per call is — as long as we’re in the range, they’ll do it. The question is will the media companies (publishers) offer it
Lion: We’re not doing ppc, we’re doing a flat fee for aggregated volume of calls.
Campbell: Advertisers have to be in the system, but there has to be consumer demand. We’re working to prove that they will, creating a great experience. We want this to be additive to PPC.
Q: This is a high profile launch for you, not a test, right?
Campbell: We don’t have all the answers, but we’re testing with placement all over the page. We do know that this is a logical, seamless transition from web to offline.
Barach: 25% of searches online are local, that’s about a billion searches. We know that people call businesses; it supports a $16B YP business today. We also know that the consumer is different than the traditional search consumer; 33% of people who call a merchant are ready to transact //now// (vs. 1% clicking through to a site). [Ed: hmmmm]
Q: It seems like it’s going to be very difficult to get merchants to pay on a per call basis; arguments about is it an old customer, etc. Selling a bucket of calls (per Lion), seems more logical. I don’t think the marketplace has the capacity to understand the value per call
Lion: The name of the game is conversion.
Q: Refining question again… no one disputes the value of the call, but should it be per-call, a bucket of call, call tracking services, auctioned, etc.
Barach: The market is the best mechanism to set the price/value for a lead. Advertisers are incredibly astute as to what they should pay. And it’s not just for a call, but for the LTV of a customer.
Q: Doesn’t that assume a level of sophistication that doesn’t exist among the SMEs; that they know how to manage in that type of marketplace
Barach: The complexity for bidding is reduced greatly when it’s categories instead of keywords (because there are few of them). Because this is industry driven, some categories may change every three minutes, others may not change for days.
Rosen: Totally disagree. SME earlier said she’d be willing to pay a royalty; that’s the last way that media wants to sell.
Lion: ppc already exists; it’s a given that people will pay a fair amount per call. Bidded is a different matter.
Q: The context of the presentation of the phone number is critical. How much info do you need to wrap around the number, where does it appear? I’m not going to call for research…
Lion: We are working on making more pictures available with each number
Kerans: No one picks up the phone without the right call to action
Campbell: We’re at the very beginning of this. The right consumer experience (category by category, buying cycle position, etc) hasn’t been created yet. But we can’t figure it out unless we try. [Ed: Disagree. All about confidence, which has triggers and is quantifiable. Correct, however, that you can’t know some things without trying… at least AOL is innovating somewhere]
Q: Is there a ppc opportunity if they already know what they want? Why pay for a call if it’s essentially a directory assitance look-up. We’re going to turn a free listing into a revenue opportunity?
Campbell: If you want to have control over how the user sees it, a certain number of advertisers will choose to be on the page multiple times in order to win the customer.
Audience Q: Is this about branding?
Campbell: Branding probably isn’t going to
Audience Q: Click to call A9, Google Mobile Local
Barach: Click-to-call has been around a long time, so we understand it pretty well. We prefer to go with presenting a telephone number.
Rosen: Part of that question is, is this a business? Or is it something that we do to measure response from the measure. You can measure response on click-to-call more easily than calls into a store
Audience Q: Is there an issue/liability with click-to-call for doctors
Kerans: Yes, for both doctors and lawyers.
Rosen: Real estate too.
Rosen: What is that advertiser spending? If it’s $200/mth, who cares. If it’s $5000-15k, then they’re a real prospect and they probably have the sophistication.
Q: Is this really a national play, and SMEs, no matter how interested, won’t have the savvy to do it
Kerans: The value of a lead (click) is there; look at Overture’s CAGR. The same will happen here; these are inbound calls, not telemarketing
Campbell: The magic value is the consumer intent; when you get an effective path to critical mass of consumer intent, the dollars will flow.
Barach: 1/3 of all businesses don’t buy YP. Those that take advantage of it will expand their businesses, others won’t. [Ed: This gets back to the “appetite to grow your business” meme, legit]
* These are raw, unproofed notes taken in real-time. Nothing attributed to any speaker should be assumed to be an exact quote. Rather, my goal was to capture and communicate the essence of what was said. If there is a significant mistake, please post a comment or email me; I will make a correction at my earliest opportunity.