FindWhat Launches Online/Offline Performance-Based Ads

  |  September 14, 2004   |  Comments

Findwhat.com's pay-per-call lead generation service allows offline companies to take advantage of online paid search.

Findwhat.com today added a pay-per-call lead generation service, allowing companies without an online presence to take advantage of its performance-based search offering.

"Pay-per-call is really the first performance-based solution out there that allows offline businesses to participate in the online paid search world," said Rick Szatkowski, senior VP of the FindWhat.com network and private label services.

The pay-per-call model is one of the ways online advertising players are trying to attract smaller local businesses. Google offers locally targeted ads through its AdWords program, but there's no offline component. Yahoo's Overture division's contribution is its Local Match sponsored search product, which includes individual Web pages for each advertiser. Several online yellow pages providers also offer performance-based ad offerings, but none of them yet offer a similar pay-per-call product.

As with FindWhat.com's pay-per-click service, advertisers bid for placement in search results which are displayed on sites in the FindWhat.com Network, which includes portals such as Excite, NBCi, Search.com and MetaCrawler, along with Yellow Pages directory SuperPages.com. The placement of the pay-per-call ads on the page will vary on each distribution partner's site, though FindWhat intends that the ads be kept separate from existing pay-per-click ads to avoid confusion.

Instead of bidding on keywords, as in the pay-per-click service, advertisers bid on relevant categories and choose the geographic area where they want their ads to show. Advertisers only pay when someone calls a trackable toll-free number included in the ad copy, as opposed to the pay-per-click service where advertisers pay whenever someone clicks on their ad. The minimum bid for pay-per-call is $2, compared with $0.05 for pay-per-click.

"It's a significantly higher price point per event than pay-per-click, but there's a reason for that," Szatkowski said. "The call occurs later in the buy cycle."

Shoppers are likely to click on several links in the early stages of research, but when they make a call, they're more likely to be closer to making a final selection, he said. Another reason for the higher price for a phone call, he added, is that it is more likely to result in a sale than a click, especially for a non-Internet-savvy business.

"Most businesses know how to convert a phone call. When they get a person on the phone, they know how to close the deal. It's harder to do via email or a Web site. The expectations are that it will be a higher close rate for them," Szatkowski said.

The higher average cost should also make it more attractive to distribution partners, who generally have a 50/50 revenue sharing agreement with FindWhat for the ads appearing on their Web sites. The program has been tested with a small number of distribution partners, but FindWhat is now courting other partners to display the ads, said Karen Yagnesak, FindWhat.com's VP of marketing.

"We expect most of our distribution partners to take up these ads, unless their business model doesn't have any sort of local application. When you look at the attractiveness of the higher bid price, and the added value of the content to their users, we expect they'll want to participate in this," Yagnesak said.

The program, announced in April, is the result of a partnership with Ingenio, a telephony provider that developed and powers the technology behind the application. Since this program is targeted toward offline businesses, the companies wanted to let advertisers manage their campaigns offline. FindWhat.com is using Ingenio's technology to provide a telephone-based interface for managing bids, setting up call routing features and accessing some reporting functions.

The program will appeal to some online advertisers as well, especially since the pricing model means that they only pay for a lead when it happens. Using this approach, they have the opportunity to experiment with different creatives and still only pay for the leads that get delivered to them, Szatkowski said.

"This gives them an alternate performance-based channel they didn't have before. It gives them the opportunity to tweak their ad creative, change the call to action," he said.

Another application of the pay-per-call offering would be a completely offline performance-based marketing approach. Since the billable event is a trackable toll-free number, there's no reason that a print ad, billboard, TV or radio ad couldn't have a pay-per-call number associated with it.

This is the first application of Ingenio's pay-per-call technology.

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ABOUT THE AUTHOR

Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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