Analysis: After pay-per-click comes pay-per call

Pay-per-call is a mutation of the very popular pay-per-click online advertising model. Pay-per-call ads are keyword search engine listings that feature a free phone number that users can call to speak to a real person, rather than clicking through to a website.

In much the same way that pay-per-click works, advertisers only pay for the ads that generate a phone call.

From where I’m sitting, this pay-per-call model seems like a pretty strong proposition. It generates real, live leads by getting actual people on the phone to clients rather than on to web sites, where they may have second thoughts about transacting.

Crucially, for those companies which don’t have a site, it’s a new way of using the internet to generate new customers. In the U.S, less than 500,000 of the 14 million plus small businesses have e-commerce websites. More than ten million don’t have a web presence at all (according to "InfoUSA":http://www.infousa.com).

The pay-per-call model also ensures that leads are targeted and relevant, as they are generated by people already looking for certain services on search engines.

"FindWhat.com":http://www.findwhat.com/content/advertiser/ppc2.asp, the U.S parent of European pay-per-click giant Espotting, has just "launched":http://www.findwhat.com/content/about/news/pressrelease.asp?a=166 pay-per-call in the U.S, and is as yet the sole provider. That doesn’t look set to last if the idea is as good in action as it is on paper.

None of the UK’s search engine players – namely Espotting, Overture and Google – have launched pay-per-call in the UK so far, but it’s a safe bet that they’re all looking or have looked at the idea very closely.

But, speaking to Netimperative, Overture's European managing director Stephen Taylor ruled out the launch of pay-per-call from his company this week: "There are significantly better and more efficient ways of bringing SME's into the paid search market."

Karen Yagnesak, vice president of marketing and communications at FindWhat.com, obviously doesn't agree and says that it and its European partner Espotting are "evaluating the situation in Europe.”

The notion of putting phone numbers on web sites and online advertising has been going for years, but FindWhat.com is the first online operator to offer the model as a whole advertising package that only charges for results.

Charlie Dobres, chief executive of online media planning and buying agency "I-level":http://www.i-level.net, thinks it’s a brilliant idea.

“The concept seems like a really good one,” he says.

Person-to-person contact is a very powerful tool.

“Sometimes phone contact is better. You have an opportunity for a better chance to convert a lead into a sale, and the chance to up-sell to customers is also offered [to advertisers] during a phone call.”

Dobres says pay-per-call doesn’t even have to be limited to search engine listings and that it could also work in banner ads and other online formats. He thinks that it could help brands whose products are quite sophisticated or complicated to shift more units.

People looking to buy pricey products via the web, such as a laptops, a digital camera, or long-haul flights, might be more likely to buy if they can speak to a real person rather than interact with a web site, because it makes them feel more secure.

“I don’t doubt that the consumer has an appetite for this,” predicts Dobres.

The only drawback with the system, says Dobres, could be tracking the leads that are generated by numbers featured in ads as opposed to those picked up from print classifieds and so forth.

But Yagnesak said they’ve got it covered. When a potential customer calls a number they see online, the receiving operator on the other end will hear a whisper that says that the call was generated by FindWhat.com (the caller on the other end won’t hear it).

Presumably, the free phone (or toll free as they say over there) number used on the web can be different to the one used in print advertising or other promotions, making the leads it generates more easily identifiable.

The launch of pay-per-call in the UK and Europe isn't yet a sure thing, but it looks more like a case of not "if" but "when".

As in most things web related, the U.S model will provide the test ground. Watch this space, or perhaps call this toll-free number…

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