Search Marketing, Meet Pay-Per-Call

OCTOBER 15, 2007


An interview with Marc Barach, chief marketing officer of Ingenio

Pay-per-click is fine for promoting Web sales, but pay-per-call offers an alternative for companies without transactional sites. Pay-per-call works on auction pricing and encourages consumers to call instead of click.

Marc Barach was president/CEO of I-Impact, chief marketing officer of InsWeb and vice president of marketing at Charles Schwab.

In 2002, Mr. Barach joined Ingenio, a pay-per-call ad service provider. eMarketer spoke with him about how pay-per-call fits into the search marketing landscape.

eMarketer: What is pay-per-call?

Marc Barach: It's a pay-per-performance unit similar to pay-per-click.

Pay-per-call is good for local, service-based firms. Online ads run free, and the advertising company appears in search results, which include a unique phone number for the advertiser. Billing is based on those phone calls. It opens up search marketing to companies that aren’t online. It's also good for brochureware-type Web sites or other non-transactional sites.

eMarketer: How does it work?

Mr. Barach: When advertisers sign up with us, we collect information from them, including what they sell and their location. We create text ads for them. They choose the geographical location they want to cover, from a two-mile radius up to national coverage. They also choose a business category in which to advertise, bid for how much they’ll pay for completed calls and set up a payment plan.

eMarketer: How does this compare to other search marketing ad networks?

Mr. Barach: We aren’t a search distribution site. We make deals with companies like Microsoft Mobile, AOL and InfoSpace. The searches get passed along to Ingenio based on geography and the other categories specified by the advertiser. Advertisers get sent back from Ingenio based on auction, like other paid search.

What gets displayed, instead of the advertiser’s site, is what advertisers tell us during sign-up. On the consumer side, those who call are very close to the sale.

eMarketer: You mentioned Microsoft Mobile. How does pay-per-call work with mobile marketing?

Mr. Barach: We create audio ads. It's part of free directory assistance. Our advertisers sponsor free 411 calls. The average call price for those is between $8 and $10, which is eight or nine times an average click price. Those customers are more valuable because they're already on the phone.

eMarketer: Who is the competition?

Mr. Barach: Several firms have click-to-call and call forwarding. Pay-per-call is more of an ad system. Idearc also offers an alternative to yellow pages ads, but they do not have a network with search distribution sites. Google is testing similar technology. We believe pay-per-call is coming in a much bigger way soon.

eMarketer: How about integrated campaigns?

Mr. Barach: Pay-per-call can be provided through APIs [application programming interfaces], which would then give a unified view to customers, allow tracking by account execs and the like. Many clients have created fully integrated views—these are for huge customers. Smaller firms just have a pay-per-call account.

eMarketer: And metrics?

Mr. Barach: It's near real-time information, including the call source and duration. Clients can get push and pull data.

eMarketer: Do clients sometimes misunderstand pay-per-call?

Mr. Barach: Not really. We deal with a lot of early adopters, and pay-per-click did a good job of educating people. For people who are completely new to the Internet, even paid search can be challenging to explain.

For small businesses, managing keywords can be a pain, so we have business-level advertising, which takes care of the keywords. Clients select up to five business categories, which are similar to yellow pages categories.

eMarketer: What else should marketers know about pay-per-call?

Mr. Barach: For online marketers, the main thing to know is that growth will occur from product innovation, not from stealing market share. Marketers need to stay current and experiment. There are no guarantees as to what will work.