FindWhat to Lure Local Businesses with Per-Call Pricing

FindWhat has paired with telephone technology player Ingenio to develop a system whereby advertisers pay per-phone-call, rather than per-click. The move is designed to attract local businesses without Web sites, or others who depend on phone calls to close deals.

Local advertising is expected to be one of the drivers of growth in the expansion of search engine marketing. The Kelsey Group expects local paid search advertising in the U.S. to reach $2.5 billion by 2008, and players have been lining up to get a slice of the pie. Google recently launched a beta version of local search, and Yahoo rolled out a search function, called SmartView, that allows users to find local businesses by proximity.

Advertisers participating in the program will be able to create simple text ads; create a business information page; choose their keywords, categories and geographical area; and bid for placement, according to Marc Barach, CMO of Ingenio. Advertisers will be able do this via the Web or on the phone, and they can make subsequent changes via either medium. The new service is set to launch in the third quarter, the companies said.

Listings, which will include a special, trackable phone number, will show up on the sites of FindWhat’s distribution partners, the companies say. It’s not yet clear where on the page they will appear, but they are expected to be separate from the FindWhat pay-per-click ads. The new ads will also link to a special business information page, which acts as the advertiser’s Web presence. As with pay per click, positioning depends on bid amount.

“To my knowledge this is the first application of a pay per call capability where the telephone call gets monetized in the same way a click does in a search advertising context,” said Greg Sterling, SVP at the Kelsey Group.

Sterling said anecdotal and empirical evidence says local businesses want phone calls. With an online business, the sales can occur online. But if it’s necessary for a conversation to take place to close a sale, pay-per-call is potentially a valuable form of advertising, he said.

“The question is whether or not local advertisers are going to go in and do this. How difficult is the process? How difficult is it setting up an ad? I’m assured it’s simple,” Sterling said.

According to Barach, advertisers are willing to pay 5 to 15 times more on a per-call basis than per click. The companies will establish a minimum per-call price, but that has not yet been determined.

According to a March 2004 survey commissioned by Ingenio, 42 percent of small business advertisers surveyed are more interested in paying for customer leads via phone calls to their business than clicks to their Web site. Forty percent of businesses surveyed said if pay-per-call were available in their area they would allocate new advertising budget dollars for such a product. The study was performed by Jupiter Research, owned by the parent of this publication.

“This is potentially a competitive differentiator for FindWhat. None of the others [search engines] are offering this capability. We’ll see other paid listing providers and search providers look at this too and maybe adopt this capability,” said Sterling.

“Overture does not currently offer this service, but the company is always looking into ways to better serve customers,” said Dina Freeman of Overture.

FindWhat and Ingenio will also work together to develop a private-label solution that combines per-click and per-call advertising. They’ll then try to sell it to other companies.

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