AT&T Tests Ad-Supported Directory Assistance (Mobile Local Search)

AT&T is launching an ad-supported directory assistance (DA) service through the phone number 1-800- YellowPages (1-800-935-5697). Right now it’s available in three markets: Bakersfield, CA.; Oklahoma City, OK; and Columbus, Ohio. Described as a “controlled trial,” it’s not clear yet if the service will roll out nationally. However, I would assume so eventually.

It reportedly will support both business-name queries, which currently constitute about 80% of DA call volumes and category search, which is critical for ad-supported models. There are four ad options:

• The Jingle (1-800-Free411) inspired “switch pitch,” where a competitor’s ad is played before the requested listing (this is a flawed model and bad user experience)

• Sponsorships, which are the equivalent of CPM/display advertising online
• Ads at the “top” of category search results (e.g., florists)
• Ads for the requested businesses themselves (an ad for the business plays before the caller hears the business contact information)

Ads will also probably come from AT&T-owned YellowPages.com as well as direct sign-ups for the service.

The AT&T free DA debut follows public consideration of an ad-supported DA model by Verizon. AT&T-owed Cingular wireless offers enhanced, though not free, DA services through a partnership with TellMe.

Jingle Networks was the first one to make ad-supported DA “viable” (though not yet profitable). Jingle competitor Infreeda basically ran out of money and is no longer operating. But with the experimental entry of AT&T and, potentially, Verizon into the market it’s clear that “free DA” is here to stay.

It’s wise for several reasons for AT&T to cannibalize its own DA traffic rather than let a competitor take it away through a comparable, free service. The use case for the service is wireless, though it will equally be available through landlines.

DA call volumes are increasingly shifting to wireless handsets for a number of reasons. Among them, because the Internet is a superior alternative to DA from a work/home “landline environment.” Also, many companies block DA to save the cost of uncontrolled employee calling.

With the inclusion of category search, this is “mobile local search for the rest of us.” Though unconfirmed, Google is thought to be testing an automated DA service at 877-520-Find. That service offers category search as well as traditional business-name lookups and is actually relatively good.

Google, Yahoo! and Microsoft are also all now offering PPCall advertising on mobile devices. Though not explicitly mentioned in the release, PPCall is the primary ad model in the new AT&T offering. Indeed, mobile is really where PPCall is starting to take off.

It’s also worth noting that as all the major carriers and search engines race to develop mobile local search and mobile search capabilities “ordinary people” are already used to calling DA and will likely adopt these services without much hesitation. Voice is a much more intuitive and, in some ways, efficient interface than those otherwise available through the phone keypad – even if it’s a full Qwerty keypad.

We are likely heading to a very segmented mobile local search market where some people use mobile search on smartphones, some use SMS query systems and some use voice and Free-DA offerings. Ease of use and efficiency will determine which of these modalities prevail. But in all likelihood people will use two out of three types, depending on the situation (driving vs. walking, etc.).

Here’s the full press release.