Pay-per-call

Needium Pay-Per-Call Trial: Looking for a Few Good Advertisers

~ Sebastien Provencher ~ Leave a comment

I’ve been very silent on this blog in the last few weeks but it’s not because of a lack of topics to discuss. With the success we’re having with Needium since our launch in January, I am simply too swamped and busy helping the team scale the company! I have a blog post coming up soon that will talk about our first six months of operations.

As a recap, Needium (www.needium.com) is a social media customer discovery service. Our service monitors Twitter and retrieves local business opportunities based on user needs and life events. Basically, we’re  identifying and indexing public local tweets that have an implicit or explicit need expressed such as “I’m hungry”, “My car just broke down” and “Does anyone have a good Phoenix restaurant to recommend?”. We then surface that information in a Web-based dashboard where Needium community managers (yes, humans!) log-in to join conversations on behalf of the merchant (using the merchant’s own Twitter account). We converse with Twitter consumers to convince them to come visit us (us being the small merchant). You can see a 1-minute video explaining what we do here: http://needium.com/video

Needium can definitely amplify consumer awareness, strengthen consumer loyalty, increase social media follower count and drive store visits and sales, but we think Needium can also drive phone calls in some business  categories. We would like to test that hypotheses and we’re looking to trial Needium on a pay-per-call basis with a few advertisers.  If you or your advertisers already use the pay-per-call model and you’re interested in trialing Needium, I want to hear from you. E-mail me at seb AT needium.com.

Flickr Picture by plenty.r.

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Twitter Business Model: Shopping?

~ Sebastien Provencher ~ 2 Comments

Friday’s New York Times analyzes a quote from one of the VCs that has invested in Twitter. We learn that shopping and e-commerce might play an important in monetizing the social network’s product recommendation traffic:

Someday, when you ask your Twitter followers to recommend the most comfortable running shoe or the best digital camera, you might be able to go one step further and buy the product on the Twitter site.

E-commerce, including links to products and turnkey payment mechanisms, is a likely revenue stream for Twitter, said Todd Chaffee, a Twitter board observer and general partner at Institutional Venture Partners, which has invested in Twitter. (…)

Many companies are already on Twitter, monitoring what customers say about them and offering discounts and promotions to their followers. And many people use Twitter to ask for recommendations, like which type of gadget to buy or which movie to see. Since Twitter is already becoming one of the best shopping resources, Mr. Chaffee said, why not enable people to make purchases from the site as well?

“Commerce-based search businesses monetize extremely well, and if someone says, ‘What treadmill should I buy?’ you as the treadmill company want to be there,” Mr. Chaffee said. “As people use Twitter to get trusted recommendations from friends and followers on what to buy, e-commerce navigation and payments will certainly play a role in Twitter monetization.”

(seen in Mashable)

What it means: for Twitter, everything points in the direction of word-of-mouth monetization through shopping. E-commerce is a low hanging fruit given the strong existing affiliate program eco-system on the Web but the natural extension for Twitter will be local merchants (including services). And what is the equivalent of e-commerce affiliate programs for local? Possibly request-for-proposals and pay-per-call.

Update (June 22, 2009): Evan Williams, Twitter’s CEO, replied to the New York Times article and, according to ReadWriteWeb said “To be clear: Todd is a Twitter investor and a very smart and helpful guy. However, he is not actually on Twitter’s board and, in this article, he’s brainstorming on his own. These are not in the least bit concrete plans of the company.” I’m still convinced they will go in that direction. It’s a completely natural evolution, whether they want it or not… 🙂

If interested, follow me on Twitter at @sebprovencher

Telmetrics: Saving Revenues by Proving Value

~ Sebastien Provencher ~ 2 Comments

Telmetrics logo At the YPA Conference a few weeks ago, I had the opportunity to sit down with Bill Dinan, who was recently named CEO of Telmetrics, the Toronto-based call measurement company.  Bill has been with the company for 11 years (as a real jack-of-all-trades, doing technology, product management, operations, finance and sales) and our sit-down session gave me the chance to explore what Telmetrics was up to. As most of my readers know, I’m a big fan of call tracking and pay-per-call.

Telmetrics is known for their call tracking technology providing local numbers anywhere in North America (a lot of competitors only provide 1-800 numbers and Canadian local tracking numbers are usually hard to come by). They provide call data which can be transformed into a pay-per-call products by publishers. They also recently launched unique URLs to enable click tracking. Their customer base includes Yellow Pages publishers, local search companies, and national advertisers who are interested in tracking their results across a multitude of media vehicles.

As a recently-named CEO, I couldn’t help but asked where Dinan wanted to take the company. He told me he wants to help publishers transition from print to online, go to a model where the important thing is total calls generated notwithstanding the media form. He also wants to expand across new media like magazines and direct mails (even if those that are sold by a Yellow Pages sales force).

When I asked him why Telmetrics is important and where they fit in the local search ecosystem, he told me he saw his role as “saving revenues by proving value”. According to Dinan, “Call tracking is becoming a cost of entry like maps.” But it sure sounds like this is now a core business that every local media should own, no? The CEO answered that Telmetrics is structured to scale a lot of numbers, very quickly. He suggested they are the biggest call-tracking company out there.

On a related note, Telmetrics just released some data that shows that shows “that many Yellow Pages users visit a business’s Web site after reviewing their print ad.” After tracking 1,200 print Yellow Pages ads from November 2008 through April 2009, they found that, on average, URL visits represented 44 percent of leads, while call traffic generated 56 percent of leads. “Tracking unique URL activity in addition to call measurement shows a 78 percent increase in the overall leads driven by print Yellow Pages.” As Telmetrics says, we might be underestimating the power of the Print media if we don’t calculate the online leads driven by it as well.

What it means: for the longest time, print advertising was sold on trust, i.e. “trust me, it works”. Now, print media needs to prove it works by providing numbers. That’s definitely an impact of the “Google Revolution” which created the impetus to prove ROI and value. Call-tracking is a must for every local media. I also like the fact that Telmetrics aggregates information on millions of calls (and now clicks) and is able to look (in aggregate) at user behavior, call durations, what consumers are asking, etc. This could become the most profitable portion of the Telmetrics business as publishers start providing marketing advice and feedback to merchants.

Rumor: eBay to Sell Skype to Google?

~ Sebastien Provencher ~ 4 Comments

Techcrunch reports on a rumor this morning that would have Google either buy Skype from eBay or Google partner with Skype.  According to the site,

“Skype, acquired in late 2005 for $3.1 billion, has been a financial albatross around Ebay’s neck. eBay removed Skype co-founder and CEO Niklas Zennstrom in October 2007, reportedly due to frustration at the financial performance of Skype. Ebay also negotiated down the huge earnout due to Skype stockholders and took a $936 million one-time loss around the transaction.  It’s clear that eBay wants to either unload Skype, or significantly drive performance.  Google, by contrast, is just beginning to think about how to dominate the voice space. They have a VOIP service through GTalk, a free 411 service and GrandCentral, a telephone management service they acquired last year for $50 million.”

What it means: I think this potential acquisition/partnership makes complete sense. IMHO, call tracking and pay-per-call represents a large portion of future local search revenues and Google clearly sees that local search is where they will get tremendous growth in the next 5-10 years.  By buying the Skype infrastructure (and user base) and combining it with the GrandCentral technology and expertise, they instantly get core assets to execute that strategy globally.

Oops! We Forgot to Atomize Our Business Model!

~ Sebastien Provencher ~ 6 Comments

A couple of news articles caught my eye last week. Mediapost reported on a TV exec seminar hosted by Havas’ Media Contacts unit. Talking about the online video revolution, Mediapost says “major TV providers are moving aggressively online–and not only to their own online destinations, but in an array of “distributed” online content options to deliver their programming directly to consumers regardless of where they are on the Web.”

In addition, TorrentFreak discussed data from Mininova (one of the largest torrent listing sites) showing that “ 50% of all people using BitTorrent at any given point in time do so to download TV-series, quite an impressive number. In total, over a billion TV-shows are downloaded every year, and this number continues to rise.”

Our friend the Atom

Flickr photo by Marshall Astor

What it means: recently, all savvy media industry strategists have been talking about content atomization and clearly, in the TV industry, TV channels are being atomized by new Web technology. Whereby, in a traditional cableco world, channels used to be the basic content building blocks (think about how your cable TV subscription is structured), TV shows have become the new atomic element.

But there’s a problem.

The content is being atomized but the main TV business model (30-second ads) was built to be part of a larger element, the TV channel. Ads used to fill, i) the “empty spaces” between shows and ii) planned 3-minute interruptions during the show. In the first scenario, those empty spaces don’t really exist anymore as shows become the basic element and BitTorrent is disrupting the second scenario by offering easily accessible ad-less versions of your favorite programs.

Guess what. Someone forgot to atomize the TV business model while they were busy atomizing the content.

So, how do you atomize TV’s business model? Is it all about product placement, sponsorships, pre-roll ads? Do you move to a user-paid subscription model for individual shows? And BTW, is the future cableco the equivalent of a RSS reader for online videos?

And what does it mean for other media, newspapers for example?

In the case of newspapers, from a content point of view, news articles are the new atoms. This is the way news information travels online. But, in that situation, newspapers’ business model has been blown to bits (no pun intended). Let me explain. Like TV channels, newspapers are inserting ads in the empty spaces around news articles. These spaces don’t really exists anymore, so how do you monetize? News article sponsorships? A-la-carte article user-paid
subscriptions? This one is not easy as journalism ethics (rightfully so!) have kept news article and ads completely separated. How do you bring ads closer to the article without breaking readers’ trust?

What about radio?

For the traditional FM radio industry, individual songs are clearly the basic atom of content. But those are so easy to find online through legal (music streaming services, iTunes) or illegal means (BitTorrent again). As for their business model, radio stations insert ads around songs. Again, these slots don’t exist in an atomized world. Maybe radio stations should invest in original content or better DJs (Wired calls them robo-DJs in “Why things suck”)? Can radio stations move online as trusted brands and become real music aggregators/recommendation engines? It might be too late. So, is FM radio as we know it screwed? Maybe more than people think. That one again is not easy to solve.

And finally, directory publishers?

As for directory publishers, their business model is currently in the ranking of directory listings. But those individual listings might be the new content atoms. And if they are, it means that the ranking structure does not exist anymore. Is it now the merchants’ phone number and a pay-per-call model? Is it pay-per-click to individual merchants? Given that directory content is all about advertising, atomizing content does not impair a directory publisher from atomizing their business model but it just needs to be properly executed. I believe pay-per-call and pay-per-click to individual merchants might definitely be the way to go.

Conclusion

If you’re atomizing your content, don’t forget to atomize your business model! This blog post raises important questions about future traditional media business models. I don’t have all the answers at this point but I meant this post as a wake-up call to stimulate deeper strategic thinking in all traditional media firms.

A Look Back at 2007

~ Sebastien Provencher ~ 10 Comments

In business blogs everywhere, it’s that time of the year again, when we start looking back at the year that was and we start to forecast what 2008 will look like. In this post, I look back at 2007 and discuss the most significant local and social media news of the year.

1) Facebook

Clearly, Facebook was the number one news of 2007. By allowing anyone to open up an account in the Fall of 2006 (at about the same time they introduced their newsfeed function), Facebook paved the way for the arrival of tech enthusiasts and early adopters/influencers. Silicon Valley got very excited in the Spring and the launch of the F8 platform in May, allowing third-party developers to build applications, brought more excitement. I believe early adopters’ interest in Facebook has peaked (and has even started to decline) but the job is done. More than 55M active users of all ages access the site every month. The social network had a couple of setbacks around the end of the year with the beacon fracas and the launch of OpenSocial by Google but I believe it does not tarnish their luster. Facebook retaliated by opening up their infrastructure. The biggest benefit to the Web in general: Facebook is introducing people to the social web (micro-blogging, blogging, pictures uploading, “friending”), people who will eventually graduate to more complex social applications.

2) The opening up of the social web

Symbolized by the publication of the OpenSocial standard, the web is becoming more social and more open. Additionnally, the announcement by Six Apart that Movable Type, their leading blogging software, is going open source and the launch of the DiSo initiative to create open source implementations of distributed social networking are also important projects. Social will be part of the fabric of the web.

3) The launch of the iPhone and the unveiling of Android

Apple created quite a stir in June by launching the iPhone, a beautiful device that changes the way we see mobile web access. It’s not a perfect machine by any mean (still very closed) but it’s a game changer. The Android mobile platform by Google is also potentially very disruptive and paves the way to an interesting 2008 in that field. Local mobile search, the famous holy grail of local search, is on the verge of becoming reality.

4) The acquisition of Ingenio by AT&T/YellowPages.com

This purchase is a critical move for YellowPages.com and it clearly signals to the rest of the directory industry that call-tracking/pay-per-call will be the unifying standard in local product bundling, allowing a single sales force to sell multiple media formats. In the same vein, Marchex acquired Voicestar earlier this year.

5) The Radiohead “pay what you want” experiment

Even though it wasn’t as radical as industry watchers wanted it to be (Radiohead is still going to release a CD version of InRainbows), this trial by one of the most preeminent alt-rock group generated a lot of discussions in the blogosphere. Consumers were allowed to pay whatever they wanted to pay for the download including not paying at all. ComScore released some disheartening information about the percentage of people who paid for the album but that was quickly shot down by Radiohead’s management. In any case, the music industry needs more bleeding edge experiments like this one to find their future business model(s).

6) Reality check in the local search industry

The last two Kelsey conferences offered a sobering and realistic look at the realities of local search. Local is tough, hasn’t been cracked yet but offers tremendous opportunities. Stakeholders are realizing that partnerships will be needed to succeed. Two senior executives from the print directory industry talked openly about the opportunities and challenges of being a traditional media publisher and it was the first time that we heard that kind of discourse publicly. Google, Yahoo and Microsoft are all courting traditional local media companies that possess large sales forces to help them increase local revenues. I think we’re getting close to the “acceptance” stage of the Internet grief cycle and we should see a lot of action next year on the local search front.

I’d love to get your feedback on 2007 events. Anything important I forgot?

Six Takeaways from Kelsey ILM 07

~ Sebastien Provencher ~ 8 Comments

Last week, I was in Los Angeles for the latest Kelsey Conference (ILM 07). We heard presentations from many interesting speakers, most notably Jake Winebaum from RHD, Jay Herratti from Citysearch, Chamath Palihapitiya from Facebook, Stuart McKelvey from TMP, John Hanke from Google and the always interesting Jason Calacanis from Mahalo.

Kelsey ILM 07

Once again, I had the opportunity to meet and discuss with many of my local search and directory industry peers, making this conference a must-attend if you’re in the local search industry. It took me the a few days to come up with takeaways from the conference, not because there weren’t any, but because they were embedded deeply in the zeitgeist of the whole conference and needed to be extracted. After a “disappointing” 2006 (as reported in this post from SES Chicago), I think we’re at a new inflexion point for the local search industry. It was almost as if every stakeholder in the room had realized that things were not as they had seemed to be and that they were being more realistic and pragmatic about online local search.

Without further ado, here are my takeaways from Kelsey ILM 07:

  1. People are finally realizing that it is very difficult to “do” local. Both advertiser and user markets are very fragmented and local initiatives do not always scale. If you’re not “native” to the local search market, the learning curve is huge.
  2. Clearly, the online local market has not been cracked yet. There is no clear winner yet and we’re still many years away from glory days.
  3. Local is going to be huge online but the various stakeholders need to work together. Players have to identify where are their core strengths and weaknesses and partner to fill the gaps (either through aggregation of technologies, content or sales). M&A should be on everyone’s mind as well. Expect a very active 2008 on that front.
  4. We heard the second reality check coming from a directory publisher in a couple of months. Time is running out and it’s now time to execute.
  5. Verticalization is starting to happen. People are realizing that there are user & advertiser differences between yellow pages headings. We might finally see some real segmentation in the industry (headings-based pricing, vertical sites, specific ad products and content, etc.) .
  6. Call-tracking/pay-per-call is now a strategic pillar of local. To solve the media fragmentation issue, this offers a unified business model to aggregate various products together and simplify the sales process.
  7. Mobile is still the holy grail of local search, coming soon, but not in 2008. Maybe 2009.

Directory Assistance Ad Revenues: $462M in 2012

~ Sebastien Provencher ~ Leave a comment

The Kelsey Group just released some data around future directory assistance advertising revenues.

“Annual U.S. revenues for advertiser-sponsored directory assistance, also referred to as free DA, will grow from $14 million in 2007 to $462 million in 2012, according to The Kelsey Group. (…) “We anticipate ad-sponsored directory assistance will morph into an audio ad business and a wireless play,” said Matt Booth, senior vice president and program director, Interactive Local Media, The Kelsey Group. “The combination of audio ads and wireless pay-per-call and text ads will drive superior per-call economics over time.”

What it means: Directory assistance (DA) has always been part of the directional media landscape but for the longest time, you could only do “known-name” searches. The introduction of enhanced content (including categories) within DA creates yet another media channel for consumers to find business information. For local media players who have embraced content digitization and/or pay-per-call, DA becomes a great distribution channel to promote their advertisers. For others, it might feel like more fragmentation is happening in the directional marketplace. I highly recommend embracing this channel as a way to reach more users on the move.

Pay-Per-Call at Superpages: Five Case Studies

~ Sebastien Provencher ~ 2 Comments

Yesterday, I attended a webinar called “Delivering Quality Leads to Platform Neutral Advertisers”. Organized by eStara, I was exposed to some interesting pay-per-call data in a presentation by Robyn Rose, Vice President of Marketing for Superpages.com. Five case studies involving different individual advertisers (florist, satellite TV provider, locksmith, personal injury lawyer, laser eye surgery) were presented.

Highlights:

  • Average monthly spend went from $300 (locksmith) to $2500 (satellite TV)
  • Average cost per call was spread between $3.70 (laser surgery) to $35.00 (locksmith)
  • The estimated conversion rate went from 30% (lawyer) to 82% (florist)
  • Average sales were between $64 (florist) and $1992 (laser surgery)
  • Sales ROI was between 2 (locksmith) to 309 (laser surgery)

In addition, we were told that the actual cost per call at Superpages.com is completely determined by market demand. Advertisers set budgets and determine how much they want to bid in their vertical (heading) and in their geography. Superpages doesn’t believe in package of calls at a fixed price and they prefer to let the market decide. They’ve also found that the product is really successful for service-based businesses (plumbers, landscapers, realtors, medical professions, florists, etc.) but some product-based companies embrace it as well if they have a call center. Businesses attracted to the product are either local or national in scope.

What it means: Superpages has to be commended for sharing some ROI information around pay-per-call as there’s not a lot of data out there. People that have been around me for a couple of years know that I’m a big, big proponent of pay-per-call as a future way to monetize online and print directory searches. Looking at the some of the numbers above, call-based advertising could be very attractive from a business case point of view.

Marchex’s Bill Day: It’s the Right Time for Investments in Local

~ Sebastien Provencher ~ 2 Comments

As an interesting segue to my VoiceStar/Marchex blog post from last week, MediaPost offers an interview with Bill Day, their new Chief Media Officer in which he talks about the importance of local for Marchex. “Kaufman Brothers analyst Sameet Sinha questioned the company’s heavy investment in local search at this moment, after the announcement it would buy pay-per-call ad provider VoiceStar. It happened to be the first official day at work for new Chief Media Officer Bill Day, most recently at WhenU, but also a co-founder of About.com and one of the online pioneers of the ’80s at Prodigy. He was nothing but optimistic about the opportunity for local.”

Highlights:

Q: Why is the time right now for local? When we did it at About.com, it was too early. The interest area was the place to invest. Things have changed. First of all, many more people use the Internet. If you want to have a pro-sumer model, you need one that scales to be very comprehensive. Marchex is a leader. It already has thousands and thousands and thousands of sites. You also need a model that can get really really deep within those localities. I did a lot of diligence coming in and with the Yellow Pages advertisers now coming on, it suggests it really is a good time to invest in local. You have to invest to reap the rewards.

Q: What is the first thing you’ll do in your new job? The first thing is to focus on the continued rollout of our open list technology populating businesses down to the ZIP code level (editor’s note: e.g. 90210.com). I’m also talking to media companies in the local space. There’s a lot of business development I need to do to get the ball rolling.

Q: Who is doing local right? There are certainly sites that get parts of it right. I can’t point to one network that gets it right consistently. I don’t know anything countrywide. The sites that tend to do that are using very stale and automated generic content that is not good enough to get repeat visitation. I’ve looked at some of the WashingtonPost.com sites, what Sidewalk’s done for Digital Cities. We’re in a pretty open space for starting to do things that haven’t been done so far on the net–to truly create a broad, deep network of sites.

What it means: Marchex believes online revenue action in the future will happen on the local and hyperlocal front. They’ve acquired web real estate (local URLs) and local content. They have solid search engine optimization (SEO) expertise and they now want to introduce user-generated content. Using all of these tools, they’re building a large-scale local ad network. The only thing I would question is the quality of traffic coming from SEO, as not all clicks are born equal. Measuring ROI will become key when evaluating the quality of local search traffic but, as I believe a good chunk of the revenues in local will happen around pay-per-call in the next 5-10 years, the acquisition of VoiceStar makes complete sense strategically. That’s a great way to measure and prove local search ROI.