Is a phone call better than a click? Pretty soon advertisers will be able to make
final call on that question. Advertising developers are pushing a new type of paid search ad dubbed "pay-per-call."
The technology for pay-per-call was actually introduced in April by Ingenio, a San Francisco-based company that develops technology for delivering online ads.
Five-year-old, privately held Ingenio has 90 employees and expects 2004 revenue of $65 million to $70 million, says Marc Barach, chief marketing officer. He says it's been profitable
last seven quarters.
Barach says Ingenio has received a patent for
main technology that enables pay-per-call. It deals with call- switching software and hardware that track and route 1-800 calls made by consumers to advertisers.
In paid search, advertisers pay companies like Google to place their ads prominently on their results pages for specific search terms.
The main type of paid search involves pay-per-click ads. That's where advertisers pay a certain amount each time someone clicks on their ad.
Pay-per-call takes that idea one step further. Here's how it works: Advertisers pay a certain amount only after a user dials
1-800 number that appears with
ad. In theory, advertisers will be getting an even more interactive response than if someone merely clicks on their ad.
Pay-per-call ads are currently in
process of being tested. The target market appears to be mostly small businesses. The ads will be programmed to appear in local searches, which target a specific ZIP code. Local search is a quickly developing market.
Advertisers will have to pay more per call than per click, but if
pay-per-call ads provide a better lead than
pay-per-click ads, developers and analysts alike expect
market to really take off.
Jupiter Research says U.S. advertisers will spend $3.2 billion on paid searches in 2005, up 23% from an expected $2.6 billion this year, so a lot of advertising dollars could be at stake.
Developers think bigger companies will also use pay-per- call, if they see small businesses having success.
"The customer sees
ad, calls in and
call is routed through our software and hardware to
advertiser's phone," Barach said.