It was bound to happen, and it has: A major Internet Yellow Pages (IYP) provider has announced that it will support the pay-per-call business model, which lets small and local businesses control their search marketing costs by paying only for customers who call rather than click.
Verizon SuperPages.com announced during the San Jose Search Engine Strategies conference earlier this month that it will begin offering “Pay For Calls” to both local and national advertisers by the end of September. Like other offerings from Miva (formerly LookSmart) and America Online, the Verizon SuperPages program will give advertisers a dedicated toll-free or local telephone number—their choice—for each ad. Customer calls on those numbers will then ring through to the advertiser’s standard phone line.
As with other pay-per-call platforms, the appeal is expected to be strongest for those advertisers that do not transact business over the Internet or who in fact do not have a Web site. These are often businesses whose market is extremely local, or who feel they need personal contact with the customer in order to convert to a sale: an insurance agency, for example, or a bed and breakfast inn.
“We’ve been in the phone book business for 100 years, so those mom-and-pops are our bread and butter, says Kristina Gregory, product manager for Verizon Superpages.com. “We know what they want and what they need.”
In the fight for market share among local businesses, IYPs like Verizon SuperPages.com can deploy some substantial advantages. For one thing, they usually already have a sales relationship with these businesses through their print directories. And with a dedicated sales force that numbers, in SuperPages’ case, some two to three thousand pairs of feet on the street, it may not be a tough task to convince some of those print directory advertisers to add an Internet component to their marketing—especially if those online campaigns produce the calls they’re comfortable with rather than harder-to-convert clickthroughs.
For businesses without a Web site, SuperPages will let them build an online business profile that contains the basics of its operating information: address, services, hours of operation, credit cards accepted, and so on. Companies can then construct an ad that will contain links both to that short business profile and to the tracking phone number Verizon SuperPages will supply.
Other advantages that a directory publisher like Verizon SuperPages can deploy in the fight for market share include the choice of local or toll-free tracking numbers. “We know from years of experience with print that lots of local consumers would rather call a local number than an 800 number,” Gregory says. “They look for that local prefix.” Verizon SuperPages.com is able to reserve blocks of local phone numbers within its operating markets for those ad purposes.
It is also able to leverage its print prominence to let local advertisers bridge the online-offline chasm with print ads that add value for the bid winners in certain online ad categories. For example, Gregory explains, an ad on the spine or in the “taxi” category might simply say, “Do you need a taxi? Call this number.” That number would point to whoever was the highest bidder for that category at that time, and that advertiser would pay for those calls just like the ones that come via the Web. When that winning bidder’s monthly marketing is exhausted, the calls will automatically transfer to the second highest bidder.
“Most of our advertisers don’t care if their calls come from a Web site or the phone book,” she says. “In some cases where we haven’t sold all the print inventory in a category, it just makes sense to drive calls off those generic phone numbers to the highest pay-per-call advertiser.”
The online ads will appear on the directory search results page alongside the pay-per-click ads that Verizon SuperPages.com has been selling for about two years now. (More on how that works in a moment.) Advertisers will select several categories in which they want their ad to appear, and those categories will have bid floors of $2 per call, $4 or $6. The bid tiers are linked to the likely size of the sale converting from the ad; a moving and storage company, for example, would be in the $6-minimum tier because of the price of the average moving job, while a landscaper or roofer would start bidding at the $4 minimum. A restaurant might be able to place an ad for $2 per call, as would a business that is likely to get more referrals than direct sales from pay-per-call ads. Advertisers control their costs by setting their bid maxima for the relevant categories.
Combining clicks and calls on a results page is tricky. Calls are more expensive, both because the callers are more highly qualified buyers and because phone contacts give the marketer opportunities to upsell that a Web page does not. So Verizon SuperPages has developed proprietary, patentable technology that allows it to “translate” pay-per-call ads into clicks for purposes of determining which ads will win for a given category and geographic location.
“On our results pages, all the phone numbers are hidden under the phone hyperlink, so customers have to click before they call,” says Verizon SuperPages.com [??] Dana Barrett. “Using that information, we call tell that it takes your business 10 clicks to get one call. If you’re placing a $6 per-call bid, that will translate to a 60-cent click bid.” If other advertisers in your category—either per click or per call-- are bidding less than that for clicks, you win the top spot.
The translation move will allow Verizon SuperPages to serve up the highest converting ads in either business model without relegating them to different neighborhoods on the page. Other providers that sell both types of search ad confine pay-per-call ads to a less than optimum position lower on the page than the pay-per-click listings. “We’re integrating both types, and we feel that will benefit our advertisers,” Barrett says.
Gregory says that Verizon SuperPages’ pay-per-click business has proven to be a big hit with advertisers. The company recently signed deals to provide specialized searchable regional directories for legal publisher Martindale Hubbell and Psychology Today magazine. SuperPages is also working with both Yahoo! Search Marketing and Google to place standard pay-per-click ads on those engines for some of its advertisers.
“We’ve got some businesses that are so impressed by the value in our pay-per-click ads that they are actually committing more money than we can book ads on our pages,” Gregory says. “So we are looking at putting some of that traffic on the ‘co-opetition’—competitors who can become partners, such as Yahoo! and Google.” In effect, this IYP may transform itself into a one-stop search marketing shop for its small and local clients.
Fees for the Pay For Calls product from Verizon SuperPages.com will be the same as those for the pay-per-click product: a $15 monthly minimum and a monthly management fee of either $20 or 30% of the advertiser’s monthly billings, whichever is greater. The monthly fee will be waived for advertisers placing display ads on SuperPages.com or spending more than $500 a month.