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San Francisco-Based Company Introduces Pay-Per-Call Advertising by: Dean Phillips Is a phone call better than a click? Pretty soon advertisers will be able to make the final call on that question. Ad developers are pushing a new type of paid search ad dubbed 'pay-per-call.' The technology for pay-per-call was actually introduced in April by Ingenio, a San Francisco-based company that develops technology for delivering online ads. Five-year-old, privately held Ingenio has 90 employees and expects 2004 revenue of $65 million to $70 million, says Marc Barach, chief marketing officer. He says it's been profitable the last seven quarters. Barach says Ingenio has received a patent for the main technology that enables pay-per-call. It deals with call- switching software and hardware that track and route 1-800 calls made by consumers to advertisers. In paid search, advertisers pay companies like Google to place their ads prominently on their results pages for specific search terms. The main type of paid search involves pay-per-click ads. That's where advertisers pay a certain amount each time someone clicks on their ad. Pay-per-call takes that idea one step further. Here's how it works: Advertisers pay a certain amount only after a user dials the 1-800 number that appears with the ad. In theory, advertisers will be getting an even more interactive response than if someone merely clicks on their ad. Pay-per-call ads are currently in the process of being tested. The target market appears to be mostly small businesses. The ads will be programmed to appear in local searches, which target a specific ZIP code. Local search is a quickly developing market. Advertisers will have to pay more per call than per click, but if the pay-per-call ads provide a better lead than the pay-per-click ads, developers and analysts alike expect the market to really take off. Jupiter Research says U.S. advertisers will spend $3.2 billion on paid searches in '2005
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