Microsoft Adds Pay-Per-Call Ads to Mobile Search

Microsoft has struck a deal with pay-per-call advertising provider Ingenio to deliver local ads on browser-based phones and other mobile devices.

When a user searches for local business information using Windows Live Search for mobile, Microsoft will show a single sponsored link from an Ingenio advertiser above its own results from local and Web searches, relevant news and Windows Live Spaces pages.

“When it comes to mobile devices, we believe the pay-per-call model will be the primary monetization model. It’s what will bring local advertisers online, and provide the best experience for users,” Marc Barach, CMO for Ingenio, told ClickZ.

The company becomes the third major Web search player to introduce new advertiisng products to its mobile presence. Yahoo last week launched keyword-based advertising for its wireless search sites in the U.S. and U.K., and google last month began testing a mobile option for AdWords advertisers.

According to The Kelsey Group’s latest forecast, the market for pay-per-call advertising is expected to reach $3.7 billion in the next four years. It is expected to be a key growth driver for the overall paid search market, in both wired and unwired environments, according to Matt Booth, program director for The Kelsey Group’s Interactive Local Media practice.

“The rapid growth in mobile search is certain to further pay-per-call adoption among top-tier advertisers and publishers,” he said.

Ingenio has similar mobile pay-per-call deals in place with AOL and Go2. Those implementations have helped Ingenio better refine results based on user intent and identify user preferences for various implementations, Barach said.

Ingenio sells the pay-per-call ads from its site, with advertisers bidding on keywords for a certain location in an auction model, as they do for click-to-call ads on search engines. Average bids for impulse searches, like finding a local restaurant or taxi service, have been in the $2 to $3 range. For more considered searches, bids can exceed $20 per call, which many advertisers are happy to pay to get a live lead on the phone, where they know how to close a sale, Barach said.

“Mobile searchers are starting to do more than just impulse searches for pizza or hotels. They’re starting to do more in-depth searches for things like residential real estate, cable TV, and mortgage refinancing.” Barach said. “There’s a consumer shift starting, where people are using their phones as mobile computers.”

On the Web, Miva, AOL and most recently Google have implemented pay-per-call ads.

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