According to the latest figures from the Internet Advertising Bureau (IAB), seven per cent of all retail spending in the UK is now online, which makes the Internet a marketplace that businesses simply cannot ignore. However, of the four million small businesses in the UK, 2.7 million still have no website. The good news is that pay-per-click (PPClick) advertising – which has become commonplace online – is now being joined by pay-per-call (PPCall), offering businesses that do not have a presence on the web the ability to use the online marketing medium for the first time. It also has other benefits for different audiences.
PPClick as a marketing model is now well understood. Advertising placed on strategic partner’s websites generates a click-through to a site in order to view marketing messages. Calculating ROI for PPClick advertising is increasingly accurate and forms an essential component of many companies’ marketing mix. The ‘Achilles heel’of PPClick is that the advertising business must maintain a website for PPClick to operate effectively. PPCall, on the other hand, offers an additional channel for PPClick users, but more importantly, gives millions of SMEs the ability to use the web as a marketing channel without needing their own site.
To click or to call?
Many businesses will not make an either/or decision when using PPClick or PPCall. Chrysi Philalithes, VP of global marketing and communications at Miva points out, “We don’t believe PPCall leads are of a higher value than PPClick leads. Rather, we see PPCall as a complement to PPClick campaigns. The key is to give your customers the choice of how they interact with your brand, via clicks or calls. Across Miva’s UK network, PPClick bid prices start at 10p, while PPCall bid prices start at £2. The reason for this higher opening bid price relates to the ability PPCall gives advertisers to close business over the phone as well as cross-sell and up-sell to prospects who have called in responses to ads.”
In the B2B arena, localisation can also be very important for some businesses. Dominic Trigg, VP of search & directory at InfoSpace, says, “The potential for B2B marketing is promising. As search engines are still struggling to offer targeted local search services, PPCall may be the route for advertisers if they are looking at local targeted marketing. Considering it’s estimated that more than 70 per cent of people searching online then go and make a purchase offline, PPCall has to be something that should be considered.”
Clearly, if your business doesn’t currently have a website, this is no longer a major barrier to increasing your sales via the online channel. As Glen Drury, MD at Yahoo UK outlines, PPCall is very attractive to these businesses, but really comes into its own if your business is chasing local customers. He says, “I believe that the opportunity for PPCall is enormous. I think it is potentially disruptive to businesses like Yellow Pages where businesses pay for an ad whether anyone actually calls or even looks at that page. I think that in the future PPClick will include geotargeting. In this scenario a business would only buy the keyword ‘plumber’, but that is also linked to ‘Wimbledon’. What PPCall does is add another layer to which customers can connect to a business.”
Better, faster conversions?
For the B2B sector, PPCall could have a massive impact on business’ ad conversion rates. The cost of gaining the sales lead will govern your use of PPCall as a marketing channel, but as Drury, of Yahoo UK points out PPCall enables an enterprise to market specific elements of its business. “In the B2B market the use of PPCall will really depend on how qualified the call is. If we take serviced offices, as an example, when a business calls they will ask very specific questions such as what colour the carpet is, etc. This kind of interaction is best handled on a PPCall basis, but at the same time, if the business just wants to know about the offices square footage and costs, this is best done via a webpage that is reached via a PPClick model. Advertising really needs to be integrated to achieve this. What many businesses do wrong is look at each of their advertising channels as completely separate from each other.”
PPCall is certainly still in its early days of development. However, as Andy Brown, editor of specialist website PayPerCall, points out, PPCall is a burgeoning channel that will see substantial growth over the next few years once its mechanics are understood by business and consumers alike. “B2B has been slower to take up CPClick so it makes sense that they will be slower to jump on the PPCall bandwagon. However, these are the sort of companies who could well be set up to handle inbound calls; so long-term we’d expect to see PPCall as a valuable online marketing channel for B2B markets. PPCall could become a very lucrative channel for some businesses. It is a simple concept that is easily understood. However, the web has become a ‘click’ medium for users as well as advertisers. At the moment, it looks like users don’t really get the ‘phone this number’ message in PPCall ads. It’s almost as if they aren’t seeing it.”
Worth the cash?
The key to effectively using PPCall is to ensure that your staff are clearly briefed on the sales offer they are supporting. Research by the Kelsey Group has indicated that the calls your business will receive from potential customers will result in a sale rate of 40 per cent. These figures were based on the online version of Yellow Pages operating in the US. “Advertisers now more than ever need to make sure their call centre staff convert calls at the highest rate possible,” states Duncan Parry, director of strategy at Steak Media. “With the sort of detailed tracking available from PPCall and PPClick, call centre managers can clearly see the cost of each conversion and analyse why calls are not converted.”
The cost of PPCall is significantly higher than PPClick advertising as the perceived return is much greater from each sales call placed by a potential customer. However, the higher costs must be put into context, as Brown of PayPerCall, says, “There are only a limited number of suppliers in the UK, but typical entry cost is approximately £2. This difference isn’t as big as it sounds since PPCall has been targeted initially at the high cost-per-click (CPClick) markets, such as financial services. In fact, it could be argued that there are bargains to be had in PPCall at the moment in some sectors. It is believed that if a prospect is prepared to talk to you on the telephone they are more likely to convert into a customer. That makes sense since few people are confident enough to call a company, unless they have a reasonable idea about what they are buying and what they need. This is the strength and the weakness of PPCall. Early indications are therefore that there is a very high conversion rate for PPCall leads. However, the volume may not be as high as some people had predicted.”
The ROI that PPCall will generate is clearly the driving factor behind this form of online advertising. If targeted correctly, PPCall can be effective as Miva – which has pioneered PPCall in the UK – claims. Philalithes of Miva, comments, “Kelsey Group estimated that 45 per cent of all inbound calls convert to business, making PPCall an important new addition to direct response schedules. This value of calls has been underlined by the bidding habits of Miva’s UK PPCall advertisers. Since launching PPCall in the UK a year ago, we’ve seen bid prices increase from £2 to £36 in one finance category.”
Matching the market
The trend may be for larger businesses to close their call centres and move more of their customer activity to their websites, but this doesn’t mean that PPCall can be the perfect way for SMEs to grab the slice of the market that their larger competitors will leave behind. This is the incorrect way to look at how PPClick and PPCall fit together as marketing companions.
“Many companies want to decrease call centre costs and therefore move to web-based services,” concludes Matt Booth, VP & program director of interactive local media at The Kelsey Group. “This is more of a margin decision than a strategic decision. Businesses, especially smaller ones, will want to reach qualified consumers however they can. The market is still in its infancy so it’s too early to draw any conclusions. Our advice is to understand the ROI from your consumers. PPCall offers an ideal way to track the actual value against the historical value of your consumers. From that, you can derive a simple ROI and place ad dollars where they are most effective.”
Redial?
The development of PPCall as an effective marketing channel is still unclear. The localisation of online searching would seem to be an inevitable development as consumers increasingly use the web to search for local suppliers and services. Google’s ‘click-to-call’ trial would clearly indicate that local search and the use of PPCall as a marketing model has a future, even if this is an uncertain one based on the current levels of usage.
Jupiter Research forecast that the PPCall market will grow from $502 million in 2004 to $824 million by 2008. Whether these figures are achieved remains to be seen. PPCall does, however, look set to become another marketing channel that businesses can successfully use, but its effectiveness outside of niche or local markets has yet to be proven.
