PPCall is an Opportunity for Innovation, Not a Necessity out of Desperation

At the mobile local search industry confab, the Kelsey Group’s DMS ’09 conference held recently in Orlando, Telmetrics CEO Bill Dinan, urged traditional yellow page companies to move to performance based pricing (press release.)

In his panel and press release Dinan argued that traditional media has proven its worth – when the number and length of calls are tracked the metrics are successful - and said now is the time to prove it with pay per call (ppcall) pricing. Dinan told Kelsey’s Charles Laughlin that he expects ppcall will become the largest revenue category for Yellow Pages, from overwhelmingly subscription today to 70-30 in favor of performance pricing within a few years.

Dinan backs up his argument with data that he says indicates print yellow page (PYP) leads are more valuable than internet yellow page leads (IYP) – as measured by average call length. Here’s the data:
• Print Yellow Pages ads average 20.5 calls per month at 2.7 minutes in length
• Internet Yellow Pages ads average 20 calls per month at 1.3 minutes in length
• Direct Mail ads average 8.4 calls per month at 1.7 minutes in length
• Interactive / SEM average 6.4 calls per month at 1.3 minutes in length

With several years in the call measurement space serving Yellow Page publishers, I concur that Print YPs deliver leads and should not be afraid to report them. However, the difference in the data – average call length of IYP (1.3 mins) vs PYP (2.7 mins) - strikes me as unusually high. I look at the Telmetics data above and I do not see the superior quality of PYP leads and an argument for pay-per-call, I see a fundamental issue with IYP call tracking and an opportunity to solve the challenge revealed within the data: Why are IYP leads 50% in quality compared to PYP leads?

Wrong numbers are one reason that IYP publishers would see very low average call lengths. However, after so many years in the space, Telmetrics should be well beyond the learning curve of dealing with wrong number calls. It’s also possible that their clients are recycling numbers on their end - or using dynamic number insertion and that is causing wrong number calls. While these actions would be beyond the call measurement provider’s control, the resulting data should raise a red flag for the client and the vendor.

Another likely explanation of the significant difference in the average call length between PYP and IYP calls is relevancy of the IYP listing. Print yellow pages are accurately targeted - nearly all listings are in my neighborhood. Online I often see ads for merchants several cities away.

I have a saying: if a merchant receives 10 calls and the average call length is 15 seconds, I don’t know what the question was, but the answer was most likely “NO.” Multiple calls to a merchant listed in an IYP heading resulting in “no” responses means the merchant isn’t relevant to the consumer search (out of business, mis-categorized, etc.) This scenario would skew average call length.

I do not view accountability and performance pricing as a requirement born out of desperation. The local mobile search industry has an opportunity for innovation and it is not limited to pay-per-call. For example, many merchants want a fixed budget and will be well served with ROI reporting (call tracking.) The mobile local search industry needs to move beyond call tracking or pay-per-call with Voice 1.0 applications and embrace the benefits of today’s innovative Voice 2.0 applications.

Yext demonstrated an example of innovative Voice 2.0 applications at TechCrunch50. The company has identified and is trying to solve the problem of leakage and dirty calls within pay-per-call. Yext Calls uses voice recognition and analytics to examine key words - within a phone call - for relevance and to filter out junk calls or non-sales leads. For example, calls such as “what are your hours of operation?” may not be charged as a lead. Yext wowed the crowd at TechCruch50 and followed-up with an announcement of a $25M venture round. (I previously commented on Yext Local Search: Enormous Opportunity – Complex Solutions.)

Another innovator in mobile local search, and the TechCruch50 winner, is Redbeacon. While not focused on pay per call, or calls at all – they are trying to solve the problem of merchant availability. This is more closely related to pay-per-call than most realize. If the merchant's staff is not available to respond to a call, the consumer is not served (and you typically cannot bill for the call). The merchant who answers the phone is generally more available than the merchant that does not - especially over a series of calls.

FastCall411 also offers an exciting fix for leakage, dirty calls and merchant availability. The goal of TryAnother, our patent-pending parallel dialing application, is to deliver more quality leads to available merchants by capturing real-time connection rate data on each call (paid and organic listings). Merchants are offered the ability to accept (and optionally pay for) a lead only when they are available to provide the service. Merchants want good clean calls.

The next generation of Voice 2.0 applications insure 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. As innovation continues improving phone leads delivered to local merchants, the replacement (virtual) phone number will no longer be an objection to overcome with the merchant, but another useful feature delivered by Yellow Pages publishers to help the merchant manage their lead pipeline.

No doubt ppcall is a big opportunity – only by tracking calls could we learn that IYP calls are half the average call length of PYP calls giving us an awesome opportunity to find out why. I am excited by the innovative, fresh thinking of the new Voice 2.0 applications coming into the market.