An online ad that yields a phone call: Now that’s counterintuitive. After all, isn’t the point of such advertising to reduce phone time by directing customers to a website? That’s true for some businesses, but others—especially service providers—prefer to encourage prospective clients to dial them up.
Say hello to pay-per-call. These online ads, which appear as sponsored links on search engine sites, prompt potential customers to make contact by phone rather than a website. Advertisers pay when a customer calls. As with pay-per-click, the cost of a pay-per-call ad is determined by a bidding process among advertisers. The higher the bid, the higher an ad appears in its search category.
One early adopter, American Incorporators Ltd. (AIL), which provides incorporation services, says the sales conversion rate on its pay-per-call ads is 8 percent to 10 percent, compared with 1 percent to 2 percent for its pay-per-click ads. “Ours is a business with a lot of questions from clients,” says David Clarke, AIL’s marketing manager. If the company can answer prospects’ initial questions, it’s easier to sign them up as customers, he adds.
AIL buys its pay-per-call ads from Ingenio. Ingenio assigns advertisers unique toll-free phone numbers for their ads so that it can track whether one has triggered a call; it charges advertisers a minimum of $2 per call received.Ingenio’s chief marketing officer, Marc Barach, acknowledges that pay-per-call is in its infancy. But the potential for growth is immense: The Kelsey Group recently forecast that spending on such ads could reach between $1.4 billion and $4 billion in 2009. Verizon is also selling pay-per-call ads, and Google is testing the concept.