Pay-Per-Call Gets Ringing at SES ShowNEW YORK -- Kevin Ryan of Did-it Search Marketing outlined many of the advantages and challenges of the pay-per-call environment during a session at yesterday's Search Engine Strategies 2005 Conference & Expo.
"Local respondents overwhelmingly tend to call more than they click in local avenues," he said. "For every click response you receive, you get three to five calls. You're really paying for the human interaction."
Ryan backed up his statement with a recent Jupiter Research statistic: 85 percent of advertisers surveyed knew their conversion rates better from telephone calls than they knew from clicks.
However, challenges in the space are many.
"It's very young [and] hasn't really launched yet, so we don't have a whole lot of traction in this space," he said.
Michael Kerans of FindWhat.com Inc. was bullish on the segment, telling session attendees that pay-per-call will be one of the fastest-growing categories over the next five years, online or offline. He quoted a Kelsey Research statistic that 4 percent of clicks result in transactions conducted with goods or services sold.
So, what are advertisers willing to pay? An example he gave was that, for an average purchase price in the $50-$250 range, "our research says that $4-$7 is a fair price to pay for that lead.
"Telephone calls are between five and 20 times more valuable than clicks, [and] conversion rates to actual sales, more than 10 times that of clicks."
Marc Barach, chief marketing officer at Ingenio, said local search would be a big growth driver in online advertising.
"When people go online to find local commercial businesses, they're ready to transact now," he said. "They're not actually in an information-gathering mode. They're in a solve-my-problem mode. The research that we have done shows that about a third of that market is ready to buy now, and somewhere about 59 percent is ready to buy in two weeks."