Deal highlights convergence of local search, wireless devices, and pay-per-call.
San Francisco-based Ingenio has sealed a strategic partnership with online yellow pages provider go2, in a revenue-sharing deal based on a model we're likely to see more of: a cocktail of local search, wireless, and pay-per-call. Growth markets, all.
Under the terms of the agreement, listings from Ingenio pay-per-call advertisers will appear in go2's directory, available both online and to millions of mobile phone Internet users, to the tune of 15 million pageviews per month. go2 has partnerships with a stable of wireless carriers, including Alltel, AT&T Wireless, Boost Mobile, Cingular, Nextel, Sprint PCS and Verizon Wireless.
Ingenio listings are slated to go live in go2's directory in the first quarter of 2005.
The joint service will allow advertisers to buy their way up the results queue, so as to be among the top listings on a mobile user's phone for a local search query.
"What this does is offer a way for local businesses, 99 percent of whom have no Web advertising yet, not to be closed out of the market just because they don't have an online shopping cart," said Marc Barach, Ingenio's CMO.
Ingenio unveiled its pay-per-call platform, in a deal with FindWhat.com, to much hullabaloo in April 2004. FindWhat provides paid search results to MetaCrawler, Excite, NBCi, and Search.com. Departing from the more prevalent pay-per-click model, online advertisers pay Ingenio only for ads that generate a phone call.
"Everyone knows what a phone lead is worth," Barach said. "Eighty-five percent of businesses know their close rates on phone leads. It clears up any ROI (return on investment) ambiguity."
For its part, go2 benefits by getting more relevant advertising to its content in a market that will take years to mature, said Lee Hancock, chief executive of the Irvine, California-based company.
Chief competitors for the Ingenio-go2 model are the traditional sources of local search information available by phone. "The competitor they're trying to dethrone is the 411 model," said Niki Scevak, a JupiterResearch analyst. "Wireless data services need to be more convenient than the phone call in order to succeed. While certainly achievable, I don't think the convenience is at that level yet."
According to the latest JupiterResearch data, the local search market is expected to grow from $502 million in 2004 to $824 million in 2008. There are an estimated 170 million mobile phone users in North America.
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