Pay Per Call: A Multichannel Ad Strategy for Marketers and Agencies of All Sizes Overview It’s obvious that paid search advertising – better known to many as “pay-per-click” advertising – has revolutionized online marketing. No doubt, its unique pay-for-performance value proposition will continue to attract advertisers for years to come. However, as pay-per-click enters its “teen years”, new paid search advertising models, like Pay Per Call®, are extending the benefits of pay-for-performance advertising to the millions of search marketers who desire direct response in the form of phone calls rather than clicks to a website. What’s more, as consumers begin to migrate away from their desktop computers as the solo access point for search, and move to new channels, like mobile search, text messaging and free directory assistance, Pay Per Call advertising will provide even greater utility. This is because phone calls can be tracked as a response mechanism across both online and offline media. This paper takes a look at how Pay Per Call advertising works and how the model is being leveraged by national marketers today. It will also examine how consumer search behavior, and, subsequently search marketing, is evolving to encompass media channels both old and new, and how today’s direct marketers can take advantage. Pay Per Call Advertising: The Value of a Phone Call Lead One aspect most service-based businesses have in common is the phone – 85 percent of businesses know their customer close rates from telephone conversations. And most businesses (in a variety of verticals from professional services to auto repair) prefer phone leads over website clicks by a ratio of 2 to 1, and would pay as much as 5-15 times more for a phone call than a click to a website1. Clearly, the phone plays a critical customer acquisition function for these businesses. Enter Pay Per Call – the model that enables these businesses to purchase phone call leads from the Internet on a performance basis. But how does a Pay Per Call ad system work, both from the perspective of an individual advertiser and an agency looking to offer Pay Per Call solutions to its client base? The Pay Per Call Advertiser Experience From an advertiser perspective, getting started with Pay Per Call is a simple 10 minute process that entails: • Creating an ad by filling in simple business information • Choosing a geography or location they want to service • Selecting a business category • Setting “callable” hours 1 Ingenio/Jupiter Research Executive Survey, 3/04 1 • Establishing a price per phone call, based on what the competitive bid environment is like in their particular category and location The bidding on categories (versus key words) is a key difference between traditional click- based advertising and the leading Pay Per Call products of today. Keyword management is a huge headache for businesses - a recent survey from eMarketer claims that 40 percent of the respondents reported they manage more than 5,000 keywords per campaign. Category bidding simplifies the process for advertisers, many of whom don’t have the time or the resources to manage complex combinations of key words. The categories are not unlike what you would find in the Yellow Pages today, and map to a behind-the-scenes library of key word search terms. All advertisers have to do is select the categories that best describe their business. Another key point is that Pay Per Call allows marketers the benefit of day-parting – a benefit unavailable to online advertisers until Google introduced the feature in AdWords in late 2006. By pre-selecting the hours they are available to take calls, Pay Per Call advertisers are able to choose which times of day their ad will run. Advertisers can also direct calls to whatever number they choose – be it home, office or mobile – to ensure that no matter where they are, they can always interact with a potential customer. This helps guarantee advertisers only receive and pay for calls when they are ready to do business. After the set up process is complete, the Pay Per Call ad is displayed on the search results page after a consumer has entered a relevant query on a search engine or a mobile device. In some cases, audio versions of Pay Per Call listings may also be served through free directory assistance providers, such as 1-800-FREE-411 in response to a consumer query. The highest-bidding advertiser in a particular category gets showcased at the top of the list, with the others following in bid order. In addition to providing 1,000 characters of descriptive text, maps, coupons and hours, the ad displays a specialized, toll-free phone number, unique to the advertiser-publisher pairing. Advertisers pay only when a consumer calls that phone number as a result of seeing or hearing the Pay Per Call ad. Behind the scenes, the call is first routed through the Pay Per Call system for billing and reporting purposes, and then forwarded to the advertiser – a process that is completed in a matter of milliseconds. To the consumer, the phone call is completely seamless. A Word About Click-to-Call Click-to-call and Pay Per Call are often used interchangeably in the media, which creates confusion. Here are some solid definitions to refer to moving forward. • Pay Per Call: An end-to-end paid search advertising system that generates calls from a variety of online and offline media channels on a performance-basis. • Click-to-Call: A technology feature that initiates a telephone call (via VOIP or regular phone lines) from a computer. The key point here is that click-to-call is an online-only connectivity method. Historically, click- to-call implementations have been used as online customer service tools, with no charge to either consumer or business to connect. However, with the rise of the Pay Per Call model, the traditional context around click-to-call has changed. Simply put, click-to-call refers to a consumer “clicking to call” a merchant, while Pay Per Call refers to an advertiser paying for a phone call from a consumer. Of course, a Pay Per Call system can use multiple options enabling the consumer to call the advertiser. Consumers can simply pick up the phone and dial a number in the ad, or they can connect via a click-to-call 2 button, which prompts the consumer to enter his or her own telephone number into the computer, then wait for the phone to ring with the merchant on the other line. Which is right for your business? If you’re already driving sufficient customer traffic to your website, then click-to-call could provide an additional way for consumers to contact you (it is recommended, however, to feature a traditional phone number alongside a click-to-call link). Alternatively, if you’re seeking to acquire new customers from paid search and prefer receiving leads in the form of phone calls rather than clicks, a Pay Per Call advertising system with visible phone numbers can help achieve that goal. While inserting a click-to-call link in a sponsored Pay Per Call listing is possible, side-by-side experience has shown that consumers still prefer to utilize the “regular” phone numbers by a wide margin. This was underscored by a recent Pike & Fischer report which concluded that several factors including privacy concerns and lack of industry support could hinder consumer adoption of click-to-call. Since the goal of Pay Per Call is to grow your customer base (rather than provide a connectivity experience), deploying an approach that reduces friction between buyers and sellers is critical. Advertiser Value Proposition In summary, Pay Per Call Advertising enables advertisers to: • Pay only for leads as they come in. • Pay the amount they determine a phone lead is worth for their particular business. • No website required – any business, online or offline, can benefit. • Receive results in the traditional manner to which they are accustomed – by phone. • Because a phone number in a Pay Per Call ad can be syndicated via online, offline and mobile media, Pay Per Call offers advertisers a central place to manage one campaign and reach millions consumers via a variety of media channels in one fell swoop. Case Studies Several kinds of businesses are using Pay Per Call today; from national brand retailers to local mom and pop businesses. Key characteristics shared by successful Pay Per Call advertisers typically include: • Highly-developed culture of customer acquisition • Relationship-based/consultative sale • Complex sale; Q&A prior to purchase Nathan Belcher is Vice President of Operations in charge of sales, marketing, and recruiting at Staffing Medical USA, a healthcare staffing company offering travel contracts for registered nurses. Nathan began managing the company’s Ingenio Pay Per Call campaign in early 2005. The approach initially appealed to StaffingMedical USA due to its cost-effective nature. Pay Per Call allows granular budget control; because Nathan only pays for calls coming in, he is able to track his spend on a daily and weekly basis. Given the nature of the staffing industry, the majority of StaffingMedical USA’s business is driven by phone leads, which is another reason why Ingenio Pay Per Call has made such an impact on the company. The phone, unlike the website form, enables StaffingMedical USA to develop an interactive, tailored sales pitch to each prospective client while engaging them in 3 a live conversation to establish a relationship. Nathan estimates that his conversions with Pay Per Call average 3.3 percent compared to pay-per-click conversions, which average 0.66 percent.