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Pay-Per-Calls

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                   SoHo NEWS & TIPS
Helping You Make the Most of Your Small Office/Home Office
                    SoHoTIPS.com
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Greetings,

For small businesses that don't receive as much advertising 
and internet clicks, the pay-per-call method is probably more 
practical than pay-for-clicks. Small businesses rely heavily 
on the phone to generate business this could be a beneficial 
marketing tool. The article below discusses how this method 
works, and how to get started.

Best,
Mandi

P.S. You can discuss this issue or any other topic in the 
new SoHo News & Tips forum. Check it out here...
SoHo News & Tips Forum

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Pay-Per-Call Marketing Tool

So-called pay-per-call advertising is far from reaching the 
ubiquity of "pay per click." But for the legions of small and 
local merchants that rely more on the telephone than the Web 
for business, buying calls instead of clicks makes more sense.

Like all performance-based advertising, businesses only pay 
when they reap results from their ads -- in this case when 
someone calls the number listed in their pay-per-call ad. Over 
the past two years, several companies including Ingenio, 
Citysearch, and Verizon, have introduced pay-per-call ad 
services that circulate their ads on various Web sites' paid 
search results, often alongside pay-per-click ads.

Here's how it usually works: A business signs up with a 
service that designs it an Internet ad that lists some inform-
ation about the business and a unique number used to track and 
bill for calls generated from the ad. The ad appears in paid 
search results on whatever Web sites the provider distributes 
them on with when consumers search for such a business in its 
geographic area. The advertiser pays a fee -- ranging anywhere 
from $2 to $50 -- when someone calls the number listed in the 
ad. The average call fee is about $8 to $10.

Each service operates a little differently, however. Ingenio, 
for instance, hosts an online auction where businesses bid on 
their per-call fee to jockey for better placement in search 
results. The highest bidder pays a penny more than the next-
highest bidder in their business category and geographic area. 
Others charge flat fee per call depending on the business type.

But pay-per-call ads are just now gaining traction, as more 
search providers use them. Ingenio, which distributes its ads 
on AOL.com and a few other search engines, recently announced 
a deal with Microsoft Corp.'s MSN unit to place ads on its 
search service for wireless devices. Kelsey Group, a Princeton, 
N.J. market-research firm, estimates that pay-per-call 
advertising will reach 15% of all local search advertising by 
2010, up from about 2% today.

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cont'd...

A big reason pay-per-call hasn't been widely used so far is 
that the largest search behemoths like Google and Yahoo have 
yet to deploy it. Yahoo has tested pay-per-call ads and Google 
recently announced plans to retest a similar feature early 
next year called click-to-call advertising, where consumers 
type their phone number into a designated box on the ad and 
the call is automatically connected.

But despite the narrower exposure, there's little risk to 
testing out a pay-per-call service.

Call ads can be particularly beneficial to local merchants 
that operate solely in their geographic area depending 
primarily on the telephone to conduct business, says Greg 
Sterling, an Oakland, Calif. Internet marketing analyst. Not 
to mention that an estimated half of all small businesses 
don't even have a Web site, so pay-per-click ads are 
impractical. And even those that do have a Web site aren't 
adept at converting clicks into actual business.

Typically a business will pay 10 times more for a call than a 
click. But callers are generally more serious shoppers than 
those who just click on ads, says Matt Booth, a senior vice 
president of the Kelsey Group. A caller will convert to a 
paying customer roughly half the time, whereas "it takes about 
10 clicks to a site to generate one phone call," Booth says.

Another advantage: "Click fraud," or the problem of people 
clicking on pay-per-click ads without the intent to possibly 
buy something, isn't an issue with call ads.

Though some businesses do worry they will rack up high fees 
from irrelevant or prank calls, most pay-per-call services try 
to dodge such concerns by not charging for a call until after 
it's been connected for a certain duration, such as 15 seconds.

Moreover, businesses have to make sure previous customers who 
first contacted them through the pay-per-call number call them 
back on their regular number so they don't end up needlessly 
paying for calls.

startupjournal.com
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DID YOU KNOW?

Why start from scratch? Why not look at how your competitors 
sell their offerings to get some instead about what has been 
tried before and what has worked well for existing companies? 
Do they have retail storefronts, or do they sell through a 
distribution channel to many retail outlets? What distributors 
already carry your competitors' products? Ask the retailers; 
they will tell you who they buy from and their alternate 
sources.

So what did you think about this issue? Drop me a line and let 
me know at mailto:mandi@gophercentral.com 

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Copyright 2006 NextEra Media.  All rights reserved.

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