March 21, 2013
By John Busby
Most U.S. consumers have smartphones and are using applications and search engines to find products or services. Yet, even as we become more connected, the most popular and productive response to a local search proves to be the good old-fashioned phone call.
This has given rise to click-to-call advertising ad units, where consumers literally tap on a phone number found in an advertisement to activate the calling feature on their phone, and this action is how the advertiser pays a publisher.
So how big is click-to-call? Bigger than you might think.
Economic effect of phone sales
To get a sense of how important phone sales are to the United States economy, add together the 2012 revenues of Microsoft, Apple and Google. Multiply that number by 3 and you get nearly $900 billion, or the annual sales driven by call centers in the U.S. And that figure does not include products or services sold over the phone by local businesses.
Imagine a world where Starbucks was 15 times larger than it is today. I know, a nightmare. You would have more than 2 million people worldwide sourcing, distributing, roasting and serving coffee – or the same number of people employed today at call centers in the U.S.
Call centers in the U.S. receive more than 250 billion minutes of incoming calls each year. Some travel companies and online travel agencies have reported higher volume to their call centers due to consumers using mobile click-to-call.
Even with the ubiquity of the Internet, the telephone remains the lifeline for many small businesses.
BIA/Kelsey, a media and advertising research firm, has released multiple studies showing that the value of a phone call is many times the value of a click or Web site visit and an order of magnitude more likely to convert.
Why is click-to-call so popular with consumers?
The short answer? It is a phone.
Google recently announced that more than 20 million calls are placed from its mobile click-to-call ads each month.
According to a 2012 report on mobile consumers, Google found that more than half of smartphone users called up a business after doing a search because “it sometimes help to speak to a real person before making a purchase decision.”
BIA/Kelsey predicts that by the year 2016 there will be 70 billion calls per year to businesses generated from mobile search, including directories, apps and “traditional” search.
Why are consumers making phone calls from mobile searches?
• Urgency and certainty: Consumers are using phone calls to make a final decision on a business or service. For example, is the toy store open? Does it gift wrap? What is the return policy? Can the HVAC company come out to the house this afternoon?
• Special requests: Consumers seem to seek a human connection to make their buying experience better. In the context of hotel bookings, consumers want to know the view from their hotel room, transport options, honeymoon packages and availability of child care.
• High-consideration products: Insurance policies, home entertainment and complex travel plans all ask big commitments from consumers and usually require conversations.
• Form factor and ad format: Consumers are less apt to do in-depth research on a phone and advertisers have limited real estate. Hence, phone calls.
Challenge of measurability
When a consumer engages with a click-to-call ad, the resulting phone call is unseen by the ad server and its outcome is unknown, creating major problems for mobile marketers.
Many clicks generated from a mobile advertising campaign are mistakes, and mistakes can represent more than 90 percent for some mobile display campaigns. In call advertising parlance, these are “butt-dials.”
Consumers also, of course, place customer service calls from mobile ads.
This creates measurement challenges for digital marketers that are accustomed to having bid management software automatically optimize campaigns based on ecommerce transactions or form fills.
Reconciling data with call center records does not provide the visibility into keyword-level or campaign-level performance that marketers really need.
Perhaps the problem is that marketers are trying to measure the “click” instead of the “call.”
Future of call advertising
As the volume of calls being driven to businesses from mobile devices continues to increase, marketers will need to adopt technology to measure and purchase phone calls, much as Web analytics and bid management tools have become required for brands to be competitive in digital advertising.
In some cases, agencies and brands have begun to adopt “call analytics,” placing unique phone numbers in advertisements to provide campaign-level and outcome-level data in real-time.
These marketers are using “call tracking numbers” as their tracking pixels and cookies. Technology investments in this space will focus on tracking thousands of campaigns and analyzing the contents of the phone calls.
On the sell-side, networks and publishers have begun to adopt pay-per-call pricing. This pricing model should become more widely adopted as advertisers better measure the performance of individual calls, much as Web analytics technology helped drive adoption of click-based pricing during the past decade.
As for consumers, we will just continue to do what comes naturally to us in mobile – pick up the phone.
John Busby is vice president of the Marchex Institute, a Seattle-based research and analytics team focused on mobile advertising and digital call advertising. Reach him at johnb@marchex.com.
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