A Pay-per-Call model for advertisers without websites

September 15, 2004

FindWhat.com wants to become the first major network distributor of pay-per-call, a new search tool that redirects searchers to advertisers' phone numbers instead of their websites.

Advertisers who use FindWhat.com don't even need a Web site, because the company creates business profile pages that load when users query keywords relevant to an advertisers' business. Yahoo!'s Overture offers LocalMatch, a product that makes a similar hosted contact page available to advertisers in its network.

When they sign up for FindWhat's pay-per-call, advertisers provide their basic contact information--such as location, operating radius, which keywords they think are relevant to their business, and how much they're willing to pay for each call. The minimum bid for pay-per-call is $2, according to FindWhat, a performance-based marketing technologies provider.

Once they're in FindWhat's system, advertisers only pay publishers when their listing generates a call to their business. Ingenio, the tech provider, measures this information by granting each of its advertisers a customized 800 number that it tracks in order to accurately charge advertisers.

As with paid search, advertisers bid against one another on relevant business categories for higher placement within a page. Also as with paid search, the bid management, analytics, and optimization processes require constant attention; FindWhat provides these services for advertisers for an extra fee.

FindWhat.com is the first major ad network to offer the new advertising technology, which belongs to tech firm Ingenio, Inc. The FindWhat.com partnership is a major win for Ingenio, which needs distribution if pay-per-call is going to get off the ground.

"We bring the major distribution network and the expansive advertiser network," to the deal, says FindWhat.com network/private label Senior Vice President and General Manager, Rick Szatkowski. FindWhat's distribution network includes more than 300 different Web publishers, including CNET, Verizon Super Pages, and Yellow Pages Group Canada. It has over 100,000 advertisers.

FindWhat has yet to announce any direct distribution within its own network, but the company said it is "very close" to announcing such distribution deals.

JupiterResearch Analyst Niki Scevak predicted that it will most likely take two to five years for pay-per-call to generate a substantial advertiser base, because many of the small- to-medium-sized businesses FindWhat is trying to reach have limited to nonexistent Web presence. He said the FindWhat agreement is "significant"--but it's only a first step, as it will need to bring its publishers on board next.

According to local market research firm The Kelsey Group, 98 percent of the roughly 22 million businesses in the United States fall into the category of small- to-medium-sized enterprises--the precise targets for the local offerings of large ad networks like Google, Overture, and FindWhat.

Additional Kelsey data shows that small and medium-sized companies conduct most of their business locally. Eighty percent of small/medium companies make up 75 percent of their product buys and/or sales within a 50-mile radius of their business location.

Currently, only 350,000 advertisers participate in paid search worldwide. Tech providers and industry evangelists hope that the number is small because business owners don't advertise on the Web unless they have a site; only about 30 percent of small or medium-sized businesses have a Web site, according to Kelsey.

The lack of Internet presence also means that getting the message out to local advertisers will be a challenge. Marc Barach, chief marketing officer for Ingenio, hopes the technology becomes more visible. The company, he says, "is bringing its marketing acumen and marketing distribution network to get the message out."

Separately, Google on Tuesday introduced several upgrades to its local search service. The changes include a new design on the results pages, easier-to-use maps, and links to businesses' home pages, ratings, and reviews.

Source: Media Post

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