The Unexpected Re-Evolution Of The Phone Call

Quick: Are you a digital marketing pro? If so, complete this sentence:

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.