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Up Next: Pay Per Call
By Bob Rentsch, Vista Consulting

Internet marketers are now offering a new type of performance based advertising: Pay-per-call. Is it right for you?

Last month, my colleague Debra wrote an article on the Pay-Per-Click services offered by Google and Overture. Pay-Per-Click ads enable you to list your site at the top of the search engine results. You don't pay to list your advertisement; you pay only when a user clicks on your listing and connects to your site. Rather than shelling out advertising dollars up front, companies now have the ability to pay for performance. The benefits of this to advertisers include limiting your risk when purchasing ads as well as providing better tracking of results.

What do you do however if you don't have a method of determining the value of a 'click' or if you're one of the estimated 70% of business that don't have a website? A click on an ad is worthless if you don't have a website and hard to value if you do have a site but no ability to track clicks to sales.

Pay-Per-Call

For many companies the desired results of running an ad is to generate traffic. The traffic is often times expressed in incoming phone calls. Unlike a click, a phone call is a currency that most companies intuitively understand. This understanding is augmented by hard data from the yellow pages industry. Through years of collecting data on every type of product and service category in the phone book, there is a wealth of information on the average number of calls and the worth of the calls generated by yellow pages advertising.

Internet marketers are now extending this concept into a new type of performance based advertising: Pay-per-call. The concept is quite simple. You run an on-line ad which lists a metered phone number. Calls to this number are counted and re-directed to your phone. Advertisers pay only when the potential buyer picks up the phone and calls.

Pricing Calls vs. Clicks

Since calls generally come later in the purchasing cycle, they are often significantly more valuable to a business than a click on a website (which may happen earlier in the process). The absolute value of the call will be dependent on the type of business. A call to a plumber may be extremely valuable as it signals a customer very ready to purchase. A call to a car rental company may be of a lesser value, as the caller could simply be price shopping. In either case however, the call represents a potential buyers taking an action and speaking with a sales representative on the phone. As such it is expected that the price of a call to an advertiser in a pay-per-call environment will be higher the price of a click in a pay-per-click environment.

An exciting element to pay-per-call advertising will be in the data that can be provided back to the advertiser. Caller statistics that show the location, date, time and length of every call may prove to be as valuable as the call themselves. Advertisers may learn for example that they are missing a significant number of calls early or late in the day, and as such may want to rethink the way they handle off-hours phone calls.

State of the Industry

Pay-Per-Call is in its infancy. Ingenio (www.ingenio.com), a provider of solutions for the online search has announced a comprehensive suite of pay-per-call products. One of Ingenio's initial customers is FindWhat (www.findwhat.com). Findwhat produces an on-line advertising platform that is syndicated through a number of Internet properties. It is expected that the major on-line yellow pages properties will follow suit, providing per-per-call options to their advertisers. While initial pricing models for pay-per-call have been a fixed price per call, as the industry matures it will follow the same bid for placement model that has evolved in the world of pay-per-click.

What Should You Do?

Those companies allocating some of their advertising budget for performance based ads, should start to explore pay-per-call along with pay-per-click. The best place to start is investigating the options that printed and on-line yellow pages providers have in the making, then branching out into other providers such as Google, AOL, MSN and Yahoo!. Be sure to fully understand the call reports that will come with a pay-per-call package, and investigate what happens to the metered phone number once your ad stops running. While still in the early stages, pay-per-call may prove to be an exciting option for many companies in the very near future.



Bob Rentsch is a marketing consultant at Vista Consulting LLC ( www.vista-consulting.com ) and brings over 20 years of experience managing marketing and development organizations. Bob

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