Stuart Henshall

Pay Per Call

October 10, 2005 09:59 AM

Topics:

I wish I could really use James Enck's line "from a valued gold plus platinum reader" still I enjoy getting pointers and tips and I won't downplay them. They aren't just valued, they are often priceless. So thanks to a Skype Journal reader who pointed me to these two articles. A few more scribes are starting to get their heads around the Skype-eBay merger and put some dollars on them.

"With Skype, eBay can expand into the service industries. They can serve attorneys, contractors, dry cleaners, who knows! They can serve anybody who values a lead but doesn't want to build a website. eBay caters to people whose business involves posting, listing, selling, and shipping. Service based businesses, such as contractors, can post pictures of what they do, but the buyer wants to talk." ISP-Planet - Business - Thinking About Skype and eBay

Putting some numbers on "pay per call."

In pay-per-call, keywords also are auctioned. But instead of a link to click, the ad directs the user to the telephone. In one version, the user calls a special number that is forwarded to the advertiser's regular phone. In another, users type in their phone numbers and get a return call from the merchant. Either way, the advertiser is billed for the referral.

America Online Inc. and smaller Web portals have partnered with a pay-per-call pioneer called Ingenio Inc., whose investors include eBay Inc. and Microsoft Corp.
Ingenio's chief marketing officer, Marc Barach, said the approach is ideal for small service businesses florists, lawyers, contractors whose customers ask lots of questions.

"They do their business by phone. They probably don't have a Web site, or if they do, it's not transactional,'' Barach said. "And customers who call them ... are really demonstrating their intent to buy. They're not just browsing.''
Judson Brady, who owns online florist Broad Street Flowers in Atlanta, said calls are much easier than clicks to convert to sales.

"You've got a much better chance of closing a sale when you're talking to them rather than having them look at your site and 10 other competitors' sites,'' Brady said.

He estimated that he closes one sale for every 70 clicks but with pay-per-call, it's one in three.
As a result, pay-per-call ads cost more. Barach said Ingenio's average per-call charge is $7, compared with about 50 cents per click. Frasier, the lawyer in Tulsa, said he pays $10 per call.

The Kelsey Group, a market-research firm based in Princeton, N.J., projects that pay-per-call will become a $1.4 billion to $4 billion industry by 2009. That would roughly parallel the recent growth of pay-per-click advertising, which jumped from about $100 million in 2000 to $3.1 billion last year, according to Jupiter Research. Gwinnett Daily Post




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Comments

Posted by: angryman at October 10, 2005 1:12 PM

Regarding the first article, I posted a similar one in mid-September
(http://fangpi.blogspot.com/2005/09/ebay-skype-services-marketplace-i-dont.html).

The second article makes you think eBay will be able to use SkypeMe links to create added revenue but then people will be able to use something like Firefox Greasemonkey scripts to overlay the original page with one that contains a link that allows a free call to the seller using any type of (SIP soft)phone.
The idea is very attractive but it's not going to be easy for eBay to cash in on it.

Posted by: Stuart [TypeKey Profile Page] at October 10, 2005 1:47 PM

I think it is worth looking at the Ingenio model. These models may be tried first, although I generally think they are old fashioned. I'm more interested in really new opportunities.

Posted by: Dan at October 11, 2005 11:01 AM

ClickZ made a good point recently that pay per call may not always be the best solution for advertisers. Which is something that eStara has been saying for quite sometime. Companies want call tracking and see the value of where leads are being generated from, but PPC is just one business model.

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