Friday, September 17, 2004

FindWhat Links Pay-Per-Click to the Telephone

In an aggressive and innovative move, FindWhat has launched a new targeted pay-per-call service, which as the name implies, links the Web to the telephone primarily for the benefit of those advertisers that do not yet have a Web presence.

Working with technology partner Ingenio, the FindWhat pay-per-call service will allow advertisers to bid for position using the same popular per-per-click auction model which is distributed throughout the FindWhat network of partner sites. Each pay-per-call ad will contain a special 800 number. When dialed, the call will be automatically forwarded to the advertiser's regular business phone line, and the advertiser will pay only on a "per call received basis."

What makes this new offering even more noteworthy is that it has been specially tailored to local advertisers, as advertisers will bid for categories rather than key words, and they'll bid for those categories in specific geographic markets. As Rick Szatkowski, Senior Vice President and General Manager of the Network and Private Label Division explained to me, "Every market, local or national, becomes its own auction environment for products and services, thus [advertisers] may bid $10 for the "personal injury lawyer" category in Atlanta, Ga., $12 for the same in Roswell, Ga., and $5 for the same in College Park, Ga. (both are Atlanta suburbs). The individual market will determine the value. The process works the same way for advertisers seeking local prospects for their products, choosing the local geography in which to show their ads. So, for example, if a florist in Chicago chooses to advertise under Florist-Chicago category, she will only be bidding with other advertisers who also bid in the Florist-Chicago category, not national florists."

For each forwarded call, the service will use a "call whisper" feature, which will announce the call to the merchant, but the caller will not hear it. That's a powerful way to reinforce the value of the service and gives advertisers a way to measure the quantity and quality of the leads that are generated. In addition, advertisers will be able to view itemized reports showing the caller's phone number (the last four digits are stripped off so advertisers aren't tempted to telemarket the list), time of call, call duration and cost for the call.

I asked Szatkowski if advertisers, now able to assess the quality and value of each call with the "call whisper" feature, might start pushing to only pay for calls that result in sales. He noted that, "Today, advertisers invest significant dollars in direct marketing and other print advertising media. They pay a flat price and have no sense of the quality of leads from those ads or the quantity of the leads; no sense of ROI from the largest portion of their advertising budget ... and there are no refunds for non-performing ads. To the extent that we now give them a tool to measure both the quantity and quality of the leads immediately, the advertiser has the ability to modify the creative if it is not drawing leads that convert and can, as a last resort, take the campaign offline immediately. The sunk cost in our model is minimal as compared to traditional advertising and the opportunity to change or "stop the bleeding" is immediate." In short, this perfect linkage of advertising to results give advertisers more control than any other form of advertising -- even "traditional" Web-based pay-per-click.

Regular readers know that I have been skeptical of all the hype surrounding local search, largely because the approach of most players to date has been to offer Web-based global reach to local businesses with no Web sites -- hardly a recipe for success. With pay-per-call, I believes that FindWhat has "cracked the code" with an offering that provides all the benefits of the Web without advertisers having to change they way they do business. As importantly, it's based on a pricing model that reflects the local nature of their businesses.

Industry veterans know that "key phone" programs with dedicated phone numbers are one of the industry's most powerful and effectives tools to prove directory advertising effectiveness. FindWhat is moving the key phone concept to a whole new level.

This is powerful, revolutionary stuff, and FindWhat is ready to offer it to publishers on a private label basis, something well worth considering.

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