AdWords advertisers must use Call Metrics and a Google Voice-generated call tracking number to participate. But rather than just paying $1 per completed call for call tracking, advertisers can now separately bid on calls.

In the near future, depending on the amount of bids and how many calls are received, Google will begin to include calls in its ads quality score. I spoke to Google’s Surojit Chatterjee who told me advertisers that don’t participate in bid for calls won’t be disadvantaged. But advertisers whose paid-search ads are generating lots of calls may see a boost in their AdWords rankings accordingly.

In other words, “call-through rate” will now be a factor in ranking. To participate in bid for calls advertisers enable Call Extensions and Call Metrics:

Last year when Google’s call tracking program “Call Metrics” was first introduced I suspected PPCall wouldn’t be far behind. Google experimented with PPCall on the PC years ago but never rolled it out broadly.

Despite its relatively low-key introduction this morning, this is a major development for Google and for AdWords advertisers. Being able to bid on calls separately as well as getting ranking “credit” for calls generated from Google ads will be significant for many advertisers (local and national) that operate call centers or have stores in the real world.

Jingle’s 800-Free-411 competed with GOOG-411, which was closed down last year, and Microsoft’s Bing-411, which is still operating. However Jingle was the leader in the “free directory assistance” segment.

At one point I called free-DA “local-mobile search for the rest of us.” That was before the dramatic growth of smartphones, which have continued to erode traditional DA call volumes.

Marchex has evolved its business over time to focus on calls and has built a call-based ad network that spans traditional media, online and mobile. The company services national clients and small businesses through partners that include Canada’s Yellow Media/Yellow Pages Group, AT&T Interactive and Skype. Marchex also offers call analytics and several other products such as reputation management.

Jingle’s revenues for 2011 are estimated to be $26 million.

Postscript: Here’s a statement from Pete Christothoulou, Marchex COO:

They do own 1-800-Free411, but that is not the reason we acquired them (in fact, this is a declining minority of their total call volume).  There are many reasons for the acquisition, but the core rationale for the acquisition was:  1) mobile voice search is an important product for our call advertising network and we could own that core IP and market leadership position; 2) Jingle has strong mobile partnerships with both carriers and mobile network operators; and 3) Jingle has growing, high-quality call volume in an important digital media channel, mobile.  For these reasons, we wanted to combine their business into our Call Advertising Network and accelerate our strategy and increase our scale and effectiveness.

Related Entries

• GOOG-411 Winds Down, Bing-411 Parties On
• AdWords And Google Voice Hook Up To Form “AdWords Call Metrics”
• Billboard Showdown: Google 411 Takes On Ask’s Algorithm
• Microsoft’s Tellme Offers Improved Mobile Voice Search Experience
• TellMe To Launch New Mobile Local Search

The program is the brainchild of Howard Lerman, Yext’s CEO. In the wake of Google Tags, Lerman conceived of the notion of taking Tags across the web with a single buy. Lerman has many ideas about overcoming the fragmentation of local and this is one response; it’s less about creating an “anti-Google” network. In fact Lerman told me in an email last night that he would love to have Google participate in “Yext Tags” distribution. He just believes that the company is unlikely to do so.

Yext Tags are probably going to become an important new ad product for local marketers and national advertisers with local stores or outlets. Here are the basic details:

• The program costs $99 per month, with a 7-day free trial (Google offers a month free)
• Tags will be sold by Yext directly but partners will be able to resell the product — so you’ll be able to buy it from Yelp or Superpages or Yellowbook or Citysearch later
• As with Google Tags, the “ads” appear in natural search results on the network sites rather than in traditional sponsored ad units
• It will take up to 48 hours to “go live” initially, depending on the site
• Yext Tags updates roll out simultaneously across the network (permitting A/B testing of a sort)

Here’s a mock-up of how Yext Tags may appear:

One could argue that Yext Tags is as much a response to Groupon’s success as it is a reaction to Google. While Yext Tags can contain any promotional message most likely they will be used for offers and deals. (There’s also an offline tracking component if offers are redeemed at the point of sale locally.)

As mentioned in the bullets above the program allows advertisers a single point of entry and distribution across a vast local network that represents easily over 100 million uniques monthly. More importantly it overcomes the fragmentation of local sites not unlike European nations coming together in the EU with a single currency. As mentioned, when changes are made or new offers introduced, updating happens simultaneously across all the participating sites. So the reach and the near-real time aspect of this are very powerful.

Not exactly the “poor man’s SEM,” Yext Tags will be a way for unsophisticated advertisers to do a form of search marketing without getting involved in any bidding or keyword picking. In addition to its Tags product Google recently introduced Boost to simplify paid search for small businesses.

Many national advertisers with local stores or outlets will undoubtedly utilize Yext Tags. According to an email exchange I had with Mapquest’s Christian Dwyer, Yext Tags allow national advertisers to “configure the offering specific to each of its locations or a region.”

Another benefit of Yext Tags, which is not obvious, is data uniformity and SEO. Signing up for Tags will also ensure correct business listings information is distributed throughout the network. Yext CEO Lerman told me in email:

The first thing that happens is that we automatically scan each of these sites for your listing and ask you (the merchant) to confirm it . . . If your business is not listed on the site, Yext Tags will automatically add you. As your Tags go live, you will be notified by e-mail with a screenshot of your Tag and a link to your live page.  Once your Tag is live for the first time, you can update it directly from the Yext Tags app in our dashboard, and, on most sites, the update will appear instantly.

This functionality is built upon Yext’s free “Yext Rep” product, which identifies where local business listings appear and whether they’re correct. Yext also sells phone calls but the Yext Tags product is completely independent of that offering.

Yext on its site references Google (case studies) that assert a 2X or greater lift in response from the use of Tags.

Related posts:

• Google Boost Ads: Automated AdWords For Small Businesses
• Google Expanding Local Tags, Pushing Them Into Mobile
• Google New Local Ad Category Invades The “7 Pack”

In the future, advertisers will combine online media with mobile ads to drive:____________.

What did you put in the blank? Let me guess.

• Branding, combining rich online experiences with mobile mini-experiences?
• E-commerce, as more people surf the Web using both devices?
• Coupons and promotions, taking advantage of the new, mobile media?

Let me try a radical idea out on you:

In the future, advertisers will combine online media with mobile ads to drive… wait for it…

Phone calls!

Here’s an admission. As a digital marketing executive for over ten years with both aQuantive and Microsoft, I didn’t consider that the “two screens” would combine to drive calls until recently. And neither did most of my colleagues.

Today, however, my view has radically changed. I believe an enormous re-evolution of the phone call is on the horizon.

Why did we never consider calls, and what makes me think that a re-evolution is on the way? Let me explain.

How did we get here?

Historically, we overlooked calls for three main reasons:

We didn’t have scalable ways for turning Internet traffic into phone calls through ads.

To drive a phone call via digital media, we needed to cause someone to leave their PC and dial a number. And almost nobody was able to do this at scale.

Today, people have an increasing number of ways to make calls through the PC so that the experience is seamless. In fact, responding to an online ad via a phone call has the major advantage that users don’t have to click away from the page they’re on. Think about that.

We didn’t have a critical mass of mobile ads.

Call-based campaigns have also struggled due to the slow emergence of mobile advertising. However, according to the May 2009 Mobile Advertising Forecast from MAGNA, U.S. mobile ad spending is projected to grow from $169 million in 2008 to $409 million in 2011.

We over-focused on the opportunity to drive online transactions to self-serve..

The speed with which the internet transformed retail, financial services, travel and other industries into self-service models was breathtaking. So we built online conversion tracking systems, message targeting capabilities and eCRM systems to make media work for these models.

Meanwhile industries like insurance, consumer credit, education and telecommunications still relied heavily on the phone for transactions. Focused on the low-hanging fruit of driving online conversions, we left call-based ad products, tools and analytical capabilities out of our mix. Sensing the opportunity, dozens of online lead generation businesses emerged, taking advantage of advertiser demand by selling online forms as call-proxies.

These three ingredients: Massive, yet slumbering demand for calls; increasing numbers of ways to place a call via the PC; and an emerging source of supply from mobile ads go together to lay the groundwork for a transformational re-evolution of phone calls.

The onset of a re-evolution

I came to Marchex so that I could be at the very front of the re-evolution of phone calls in the digital media mix. In fact, I wanted to create and drive it. And that’s what we’re doing. From my post, here is what I see:

Advertisers are beginning to plan media explicitly to drive calls..

Two years ago, we purchased VoiceStar, a call-tracking company, and invested heavily in building analytics capabilities on top. We believed that advertisers would need technology to drive calls, and would want to use call data to improve their entire marketing mix.

We were right. Many advertisers begin by implementing the system to discover how many calls their current spends are already driving, so that they can bid accurately in search.

Pay-per-call business models are emerging.

We founded our pay-for-call business because we saw an opportunity to lead the way in creating best practices around driving calls with both online and mobile devices. Our results thus far speak for themselves: Pay-for-call is the fastest-growing business under the Marchex umbrella, with very low negative customer churn.

Ad-supported “free call” models are about to emerge.

Imagine for a second that you are an advertiser in the insurance industry. Would you underwrite the cost of a phone call in order to receive calls from potential customers? The answer to this question is obvious, and signals the emergence of ad-supported call models. These models will likely be born on the PC, and will speed adoption of PC call capabilities.

How far will it go?

The re-evolution of calls is underway, and I’m excited about it. Moreover, when I consider the potential of calls as an advertising product, I am inspired. Consider three thoughts:

Online, click-to-call ads could perform significantly better than online direct response ads.

Here’s my logic. First, over time, response rates to online click-to-call ads could come close to those of today’s online direct response ads. For example, even if only 30% of Internet users adopt click-to-call as a part of their web surfing behavior, they are likely to respond to ads more frequently because calls do not interrupt surfing.

Second, even if response rates are lower, conversion rates of calls will be significantly higher than current click-to-conversion rates. For example, today we know that calls convert at nearly four times the rate of clicks for many businesses.

Third, the major buyers of calls—insurance, consumer credit, education—pay more for conversions than any other category.

These forces—similar response rates, significantly better conversion rates and higher bounties—could combine to create a huge interruption in the landscape of online performance ads. In short, current direct response ads could literally be replaced in large part by click-to-call ads.

Pay-per-call ads could dominate mobile advertising. Consider this assertion: If calls build a meaningful footprint as a part of the online media mix, they will dominate mobile advertising. The logic here is simple, and I find this conclusion inescapable.

Ad-supported call models could spring up quickly among wireless carriers. If this model succeeds in driving the adoption of PC-call capabilities, it will almost certainly spread to the phone.

What are your thoughts? Please share them in the comments section below.

We’ve long known that calls are much more valuable than clicks to small businesses in particular, but also to many larger entities with call-center sales operations. However… it’s taken PPCall much longer to get going than I originally anticipated.

Sterling sees pay-per-call growth in traditional media and mobile. He also notes that pay-per-call programs are now increasingly being used in print Yellow Page directories such as AT&T which just announced pay-per-call programs via the YPmobile App for iPhone and iTouch . Merchant Circle also recently announced pay-per-acquisition pricing – including pay-per-call.

And it’s not just AT&T and Merchant Circle. Other traditional yellow page publishes are renewing interest, and venture rounds by MojoPages, Balihoo, RingRevenue, as well as the TechCrunch50 launch of Redbeacon and Yext show that there is a growing supply of pay per call offerings coming into the mobile local search market.

In fact, I just read a blog post lamenting the poor service delivered to a pay-per-call advertiser. The merchant—who was irate that he received wrong number calls and was charged inappropriately—reminded me of what can go wrong with an advertiser’s pay-per-call campaign.

All of this brings home a point: as more and more search engine marketers, publishers and others in the mobile local search ecosystem are discovering, pay-per-call is not as easy as it appears on the surface. If your local business is being pitched by a provider who just provisions a few tracking numbers, begins charging for calls and then expects to roll in the dough, you need to be prepared to ask a few hard questions.

Five rules for every local merchant interested in pay-per-call pricing

Make a good first impression. If the first calls received from your campaign are wrong numbers look out. Despite best intentions, assigned numbers (necessary of course for pay-per-call), are never entirely clean. Before a number is assigned, your provider should be monitoring for wrong number calls.

Be selective. Pay-per-call can succeed for local advertisers focused on phone lead generation, but it may not be right for your business. Your business should not rely on walk-in traffic (retail); the cost of sale cannot be too low, or too high; and sales generally need to be closed every few calls (high sales to call ratio). You are an ideal pay-per-call advertising candidate if you have advertised in the yellow pages, newspapers, FSIs, Valpak or other mailers, radio or local TV. Business-to-business (B2B) advertisers or niche merchants are not typically good candidates for pay-per-call.

Be prepared to serve your callers. I founded my company on the premise that pay-per-call must benefit the consumer, merchant and publisher. Ten dollars per call may be a great deal for you, but your business needs to be properly staffed and trained to answer the phone. Without a connection to your helpful, available staff, the consumer is not served. If your business does not have the infrastructure to serve clients by phone, pay-per-call may not be for you.

Be able to close a sale or make an appointment by phone. I had a client—a direct mail publisher—whose advertiser complained that they did not make any sales as a result of the pay-per-call leads. We were recording the calls (with permission) for the client and discovered that the leads from the publisher were good, but the advertiser’s staff couldn’t sell.

Calls prove return on advertising investment (ROI) even without pay-per-call pricing. If pay-per-call isn’t right for your business, don’t give up on the numerous benefits of tracking and routing calls.

Look for innovators and leaders when comparing pay-per-call offerings. Yext demonstrated an example of this innovative thinking at TechCrunch50. Leakage and dirty calls are a real problem with pay-per-call. Yext is using analytics to examine key words for relevance and filter out junk calls.

The TechCruch50 winner, Redbeacon—while not focused on pay per call, or calls at all—is trying to solve the problem of merchant availability. This is closely related to pay-per-call (see Rule #3). If your staff is not available to respond to a call, the consumer is not served. The merchant who answers the phone is generally more available than the merchant that does not—especially over a series of calls.

Successful implementation of pay-per-call requires bottom up thinking with the same new product development rigor as any major new advertising or lead generation product. The next generation of Pay-per-call 2.0 insures a high level of satisfaction with the quality of your callers (consumers) by including detailed analytics and reporting to identify repeat calls by caller ID and other calling patterns; category management to deliver the best leads to the right merchants; pricing models that optimize value; and finally advanced, real-time call routing applications to deal wrong numbers, vendors and other unwanted calls.

Despite several years of building expectation, pay-per-call is still a relatively new pricing model within mobile local search. Providers entering this market must be prepared for a fairly steep learning curve and merchants need to be prepared to ask the right questions.

Reverse proxy method: Best suited for local advertisers

With the reverse proxy method, instead of web requests going directly to an advertiser’s website, the user request is routed to an intermediary server which determines what content should be displayed. This proxy retrieves the content from the advertiser’s website and transforms the output by inserting and/or replacing specific phone numbers on the page with call tracking numbers based on keyword or search engine triggers. This is done via cached copies of an advertiser’s website or in some cases, in real-time, for every request through the proxy so that any dynamic content included on the advertiser’s page is reflected ensuring that data is always current and up-to-date.

As reverse proxy capability is more readily available from SEM or other third party resellers, this approach is very effective for local advertisers or SMBs that do not have sophisticated internal technology resources easily available to make modifications to their existing websites. However, because a service provider is involved, it is typically more expensive. Also, reverse proxy is a better option for advertisers that use third party website functionality for shopping carts or email forms.

A disadvantage of the reverse proxy method is that it is not well suited for tracking organic search activity. Reverse proxy sites are invisible to search engine spiders, so organic searchers would never reach a reverse proxy site and online organic search activity is not captured. Also, larger advertisers with complex websites that are considering this approach should ask the reseller about their reverse proxy method as some require the advertiser to share control of the websites as they continuously make duplicate or updated copies of the page. This “carbon copy” approach would be a complication for advertiser sites that include real-time data such as news feeds, RSS or stock quotes, as it risks serving static or old data.

Javascript tracking codes: Best suited for national advertisers

In the Javascript tracking code method, user requests are routed to the advertiser’s actual website rather than through a third party intermediary. Similar to Google Analytics, a piece of Javascript code containing a unique identifier is inserted into an advertiser’s webpage which links to the SEM provider’s servers via a web service. When an ad click or organic search result routes a user to the advertiser’s website, the Javascript takes the parameters used to perform the search along with the advertiser’s unique identifier and passes them to the SEM provider to be processed against predefined keyword, ad group and browser triggers. The result is a series of phone number substitutions returned to the advertiser’s page where it is used to dynamically update the content with the designated call tracking numbers.

Since the coding is performed client-side, this method requires HTML design and maintenance expertise—something typical SMBs lack. It is best suited for larger, national advertisers with committed monetary and technology resources or which have access to specialized agency resources that can perform such maintenance.

A benefit of the Javascript tracking code method is that advertisers can use it to track organic search activity. This method uses an advertisers’ primary website and domain names, which are easily visible to search engine spiders and enable advertisers to compare the organic traffic from a keyword or ad campaign on Google versus Bing. As such, Javascript tracking code is the best method for tracking full search engine optimization and marketing results. Also, because this method uses traditional or primary domain names, such as macys.com, rather than a third-party provider URL like provider.macys.com, national advertisers have more control over their branding standards.

One minor pitfall of this method is that some browsers disable Javascript tracking code. It is a small percentage but does represent a data loss.

The overall benefits of DNI—through either method—are simple: DNI provides advertisers greater visibility to the source of inbound calls and allows advertisers to track the performance of specific ads and/or keywords. With the ability to capture the full value of online advertising initiatives adding call counts to the traditional click count approach to online campaign performance, advertisers can optimize their spend and move underperforming keyword-search engine ad buys to more successful combinations.

Simultaneously, click-to-call or call completion was terminated on Google Maps. Here’s what Google officially said at the time:

“Google is always working to improve the local search experience. We are constantly testing new features and iterating based on feedback from our users. Click-to-call was a valuable experiment that enabled us to learn more about the preferences of our users. While we are no longer providing this service, we expect to incorporate our findings into future developments for Google Maps.”

Microsoft Live Local had a similar program, “Call for Free,” which it appears to have discontinued.

The central issue with click-to-call is consumer adoption and usage. While there’s some dispute over this, the majority of anecdotal evidence suggests that consumers don’t use these services. However, providing visible tracking phone numbers is more expensive than the VoIP-supported click-to-call boxes Google was using. Yet calls are more compelling to many advertisers (local and national) than clicks. Think: hotels or any local business that deals in appointments. That persistent recognition may be partly motivating the renewed test.

Given the history and lack of consumer adoption, it’s very interesting that Google has apparently resumed this program, although I was unable to find any such ads in several attempts to find one. It should be noted that click-to-call is not the same as PPCall, but they’re often confused. The former is a method of delivering or connecting phone calls, while the latter is a billing or advertising system that may be supported by click-to-call but also conventional tracking phone numbers.

Here’s a video showing the apparently renewed test on Google:

Postscript: Superpages says it is still using click to call.

PhoneSpots has been around since 1999 and pioneered the “send to mobile” feature now in widespread use on local search sites. PhoneSpots originally partnered with European mobile operators to offer enhanced results (additional content and links) from directory assistance queries when users opted to receive them as text messages. Most recently, PhoneSpots announced its first US customer relationship with AT&T, to power the YellowPages.com “send to mobile” feature and the company’s YP411 SMS platform.

CallGenie offered a “voice in, voice out” approach to content and ad delivery. However, that approach is incomplete in a rapidly evolving market, and the PhoneSpots acquisition allows the company to deliver mobile content and ads via text message or WAP in addition to voice.

We previously wrote about PhoneSpots’ mobile ad exchange. There’s also some additional information on LocalMobileSearch.net.

I have more detail on my personal blog.