From Clicks To Calls

As 2010 closes, I believe we are seeing the beginning of a transformation in digital marketing: what we at Marchex call “the call economy.” Although built on the backs of established online marketing tactics, the advent of a market for leads delivered through phone calls under a performance-based model represents a massive shift in how advertisers can efficiently acquire new customers.

For a very broad range of search advertisers, both large and small, the targeting of search terms and purchase of clicks is mere prelude to what they consider the ultimate outcome, and the one over which they have the most direct influence when converting a lead: a phone call. Whether the advertiser is a SOHO accountant or a national insurance giant, the clicks they drive are generally rendered valuable only in the context of their ability to lead to actual conversation.

Historically, the market for clicks took hold where it mattered most: for advertisers looking to drive revenue or attention proximate to the click event, primarily e-commerce or other online monetization regimes (such as, ironically, re-selling the same click). But what’s so exciting about the emergent call market is that it’s inherently cross-channel: a web or mobile search, map query, or other digital (as opposed to online-only) event yields a durable, intimate, person-to-person connection in the form of advertiser and prospect actually speaking… and transacting.

In the transition from display to search marketing, we saw advertisers gravitate to a market that provided both better performance (intent was arguably clearer given specific search terms at a moment of consumer need, and generally higher conversion rates), and greater transparency (the ability to measure correlations between a stated consumer need and a desired advertiser outcome at scale). As the market for calls develops, necessarily piggybacking on other established means of generating leads, the same propensity for increased performance and transparency is expressed pretty dramatically:

Performance. Any company, of any size, that secures new customers over the phone will tell you that calls sit far deeper in the conversion funnel than any impression, search, or website interaction ever could. Our own data suggests that in certain categories, phone-based conversions can reach double digit multiples of click conversion rates.

Transparency. Actual voice dialogue with prospects is invaluable, since inference is kept to a minimum. You can literally hear what’s on the mind of the customer: why they called, what they’re looking for and what hooks will get them to convert. Compare this intimate window to the evanescence of a click.

When we look to 2011, here are some of the macro trends we believe will help establish and grow the call economy.

Phones are becoming computers. According to Forrester, 23% of 18-44 year-olds already own a smart phone. On both smart phones and even a broad range of simpler mobile devices, access to information is greater than ever before, and the friction between finding a number and dialing it is as simple as a button press.

Computers are becoming phones. Every desktop and laptop running a copy of the over 500 million downloads of Skype is capable of turning a search for a product or service into a seamless conversation with an advertiser. A consumer can research auto insurance, come to a conclusion, click on a number and instantly speak with an agent without ever picking up a physical telephone.

When you can buy calls, clicks seem exorbitant. If an advertiser needs to buy 50 clicks at $5 apiece to generate a single call, a market that provides a qualified call at the rate of anything less than $250 will quickly cannibalize click budget.

Phone calls convert well, and put the advertiser in direct control. Beyond the notes above on the typical conversion performance of a call, the context—direct conversation with a potential customer—puts the advertiser in the driver’s seat with respect to conversion. As opposed to generally calcified landing pages or web sites, which otherwise would need to mediate between a purchased click and a call, being able to pay to actually speak to a prospect means access to all of the closing tactics of a live sales person.

Phone calls yield intelligence. Even when calls don’t convert, they can be data mined in the aggregate to surface everything from products of interest to knowledge of competitors, to sensitivity to features or price points, to the efficiency of the IVR (interactive voice response) or call center.

The supply/demand equation is solvable. On the demand side, analysts like BIA/Kelsey estimate is that advertisers already spend in the region of $30B annually to drive phone calls. On the supply side, new sources open up every day, from mobile applications to Skype.

To be clear, our belief in the ascendancy of the call economy isn’t without very specific costs, since the barriers to entry are quite high. By way of example, here’s a tiny sample of the challenges of participating in the call economy: having a telecommunications infrastructure that can scale to hundreds of millions of calls a month; being able to data mine audio; securing and homogenizing fragmented sources of supply; educating advertisers about the benefits of purchasing calls directly, as opposed to trying to drum them up themselves; being able to split run test IVRs to optimize for qualified callers; providing direct hooks into large call center workflows; understanding how to automatically recognize a pocket dial on a mobile phone; and a thousand other tricks which are found in no other field of marketing we have yet seen.

Since the turn of the year is a great occasion for shifting from navel gazing to star gazing, I’ll leave the reader to consider this vision: turning every single phone call between a consumer and a business into a monetized event, aligned along the axis of a newly-conceived, efficient marketing economy.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Local | Local Search Column

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About The Author: is the Executive Vice President of Product Engineering for Marchex, a leading local search and advertising company that provides innovative online and call-based advertising products and services for local and national advertisers and advertising resellers.

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  • http://www.AlchemyUnited.com ChiefAlchemist

    Well stated Matt. Mind if I share a couple observation of my own?

    —The strictly online click to (immediate) conversion construct was artificial. It defined the clickers’ thought funnel in a way that was not in line with reality and expectations. Phone calls are obviously not new. What is new is the understanding that they still matter to many people. It’s an acknowledgment that the funnel is more complex then Click A should immediately lead to Conversion B.

    —That said, the attraction of phone calls could also be indicative of weakness in a website. Are people phoning because they feel they have to, or because want to?

    —We are ultimately local beasts. Sure we all love the convenience and ubiquity of the internet, However, the majority of our real world tactile connections are local. It’s still natural for many to gravitate to that collective unconsciousness. That could certainly fade but for the moment it still seems to exist today.

    —I think sometimes internet industry types forget that not everyone is as internet-y as they are, nor do those others really care to be (that geeky?) . At some point it’s wise to separate the hype from most people’s reality. Phone calls might not be new or sexy but for many they are still a viable channel of communication.

  • http://www.organicSEOconsultant.com/ Miguel Salcido

    Matt, great piece. Do you know of any companies that can track phone calls to organic keywords? I have heard Marchex sales people claim it alot but have yet to get confirmation from anyone in the industry and am still confused as to if it is possible and how.r

    Also, how do you overcome the issues of a local phone number on your site as a local ranking factor and that if you syndicate your contact info and phone it should match your site and google Places account? I meant that in the context of using tracking phone numbers.

    Can that be overcome? Serving Googlebot the same number but serving a different number for call tracking to everyone else is sort of against their TOS. Although one could argue that the visitor ends up at the same place no matter what number they call through.

  • http://www.centuryinteractive.com/stephen Stephen Cravens

    Great post, Matt! The handwriting is on the wall that advertisers will come around to paying for calls directly and bypass paying for intermediate conversions.

    Miguel, you bring up fantastic queries. I know for a fact (because I work there!) that Century Interactive can track phone calls to organic keywords. We have hundreds of clients doing this, and it’s dynamite for keyword discovery.

    Also a great question on putting a tracking number in your Places entry. Google doesn’t prohibit tracking phone numbers in your listing, however, it asks that the ring-to be the place of business represented in the listing. It wants to prevent out-of-area businesses from establishing a ghost presence in your city.

    http://www.google.com/support/places/bin/answer.py?hl=en&answer=107528&rd=1

  • http://www.qualitywebsitetesting.com mgammel

    I just wanted to share some problems my clients had with tracking phone numbers. I work primarily with small businesses providing organic SEO services. What my clients run into is that they try out an internet marketing service. That service sets up tracking phone numbers and creates profiles on Google, Yahoo, and other directories with the tracking phone number. Other online services and databases can also pick up the tracking phone number.

    The problem occurs when the client cancels the internet marketing service and the tracking phone # remains in the profiles. But the phone # gets reassigned. The client doesn’t realize this till months later. It can take awhile to clean this up. In one case, the tracking phone # assigned to my client ended up being redirected to a questionable dating service.

    While tracking phone #’s have some good qualities, companies should be wary how they are used.

  • http://www.centuryinteractive.com stevecravens

    mgammel – that raises another pesky issue with call tracking, the need for you to own your own phone numbers! It’s not hard to set up an account, with say a Century Interactive, and by doing so, you have the autonomy to provision/cancel numbers at your whim. Thus, eliminating any risk those tracking numbers will ever be published elsewhere. Great comment!

  • http://www.PhoneFromHere.com phonefromhere.com

    Hi Matthew, Really interesting post, you share our thoughts on converting Web interactions to voice leads. PhoneFromHere.com may well be able to supply you with services to help you achieve your web to voice lead aspirations including all the analytics you need to track lead origination. Get in touch in the New Year and lets see if we can work together.

 

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