Why Pay-Per-Call Advertising Needs Ad Agencies

This article by Hollis originally appeared in ClickZ on January 17, 2006.

Born into the world of performance-based online marketing two years ago, pay-per-call advertising is still trying to break into the mainstream marketplace. Most closely akin to PPC advertising, pay per call allows an advertiser to pay only when someone calls in from a specific ad. We shouldn’t confuse pay per call with its kissing cousin, click to call, which is powered by the same call-tracking technologies but isn’t an ad buy. Instead, click to call integrates site-side or the same call-tracking technology can be used by a marketer to track its offline call-in leads.

Pay-Per-Call Distinctions

With pay-per-call advertising, a company can truly utilize the Internet’s marketing power and tracking without a Web site for the first time. Small businesses of all types no longer must have Web sites to generate online leads.

Pay per call naturally fits in with local search. If local search takes off as predicted, pay-per-call advertising opportunities should flourish as well. Kelsey Group analyst Greg Sterling predicts that by the end of 2006, “all the major portals and engines [will] have pay-per-call distribution, if not their own pay-per-call advertising options.” Google confirms it’s “conducting a limited test of a pay-per-call model.”

Pay per call’s potency certainly exceeds many other online ad options. Providing customer service via the phone combines direct response marketing with branding, and the immediate connection of customer to company can increase conversions fivefold over click-through Web leads. The conversion cycle is also reduced. One case study shows sales average close rates at 14 days per click and one day per call.

As a result of this lead quality, buyers can expect to pay higher prices. In an auction environment, pay-per-call leads can start at $2 and go as high as $50 for the most competitive, high-ticket sales.

The Players

• Ingenio is the most well-established company in the pay-per-call ad space. It provides the pay-per-call backbone to AOL, MIVA, and Local.com, among others. Ingenio launched an API in August; in 2006, it’ll launch a developer forum and a program for SEM agencies.
• eStara’s Push to Talk powers SuperPages.com and Amazon’s A9.
• Jambo has a distribution relationship with InfoSpace, and others are in the works.
• VoiceStar enables over 100 publishers and networks with pay-per-call, including Yelp and Advertising.com.

Best Practices

Advertisers who will best benefit from pay-per-call have a solid call center in place and know their metrics. Some best practice tips include the following:

• Understand the qualitative differences between a Web call and other calls so customer service can respond differently.
• Experiment by first allocating a small budget and comparing results to other direct marketing channels.
• Know where and how pay-per-call placements appear, so you can bid accordingly to ensure visibility (e.g., AOL only displays one pay-per-call ad per search results page).
• Understand how the client is charged for a call (e.g., how many days from an initial call until the client is charged again for that caller?).
• Use features such as day-parting, call forwarding, call scheduling, geotargeting, and bid management when available.
• Know what data and reporting are available to you and review them.
• Proceed with caution, and be prepared for a very manual process. Heeds Dave Roth of Carat Fusion, “Bidding systems are improving but are not there yet, and nor are third-party bid management providers on the pay-per-call bandwagon yet.”

Pay-Per-Call Needs Us

Right now, almost all pay-per-call providers find new advertisers by following the most common search query trails, then contacting matching prospective advertisers in the region. It’s far easier, however, for these providers to partner with ad agencies and search marketers to bring the client to the process.

By bringing key advertisers to the pay-per-call advertising marketplace, agencies can help build the critical mass necessary to help secure more placements for pay-per-call opportunities. Advertisers using pay per call successfully are clamoring for more inventory. Given the economics of a $0.25 click versus a $10.00 call, with increased market demand sites may well devote more placements to pay-per-call in the near future.

And what’s my own personal contribution to pay per call? I’d like to see an abbreviation, so we can talk about it more easily. Since “PPC” is already taken, how about “PPTC” for “pay per telephone call”? It has a nice ring to it.

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