Heeding the Call
By Michael Myser

(Business 2.0) - Google (Research) and Yahoo (Research) take in billions of dollars annually in pay-per-click advertising, but they've also been leaving billions on the table. After all, many local businesses--lawyers, plumbers, and the like--prefer the phone for generating sales. "Seventy-one percent of small businesses say they'd rather have phone leads than clicks," says Greg Sterling, a search analyst with the Kelsey Group. That's why search giants are scrambling to deploy pay-per-call. Similar to click-based ads, pay-per-call ads require advertisers to bid on product categories. But instead of a URL next to the search results, a unique toll-free number routes calls to the advertiser. America Online rolled out the new ad model last year, and Google and Yahoo are rumored to be readying their versions by summer.

As the name suggests, advertisers pay for every conversation with a customer--and heftily. San Francisco-based Ingenio, which runs pay-per-call for AOL, is the clear leader in the very young category, which the Kelsey Group estimates could be worth $1.4 billion by 2009. Pay-per-click ads cost $1.50 a click on average, but Ingenio says it's getting $8 to $10 per call. Judson Brady, owner of Atlanta-based Broad Street Flowers, says he pays $4.15 per call with Ingenio, but for every three phone leads, he gets an order worth at least $25. "With pay-per-click ads, we're lucky just to break even," Brady says. Forget about click-through: How's your ad's call-through? Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.