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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