AOL To Launch Pay-Per-Call Paid Listings

by Wendy Davis, Jan 20, 2005, 11:35 PM

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America Online will soon offer marketers the chance to display ads on a pay- per-call basis to consumers who are conducting searches. The move, part of a larger revamp of AOL's search capabilities, was announced by the Dulles, Va.-based Internet portal company yesterday.

The pay-per-call arrangement involves San Francisco-based Ingenio powering sponsored search results for AOL. Both companies declined to disclose when the pay-per-call listings will launch.

Ingenio last year began distributing pay-per-call listings through FindWhat, which supplies paid search results to a number of outlets, including BizJournals.com. But the AOL deal represents a breakthrough for Ingenio, because of AOL's reputation and large reach. "It's very significant because it's certainly a huge point of credibility for our company," said Ingenio's Chief Marketing Officer Marc Barach.

JupiterResearch Analyst Niki Scevak added that the arrangement "marks a major milestone in pay-per-call distribution deals," due to AOL's scope. Currently, AOL has more than 22 million paying subscribers.

Since 2002, Google has powered AOL's search listings--both the natural listings, which strive to return results based on Web pages' relevance to the users' queries, and sponsored listings, for which advertisers pay a fee for each user who clicks on their Web sites. A contract between the two companies was renewed for a "multi-year" term in October of 2003.

Gerry Campbell, vice president and general manager of AOL Search, said that AOL will now return paid listings from both Google and Ingenio for the same search query. Details--including the number of ads returned per search, and the design of the page--have not yet been finalized, said Campbell.

Pay-per-call is attractive to service-based businesses, which rely on customers arranging appointments over the telephone. While search advertising has shown tremendous growth recently, some phone-oriented service businesses have been left out, as have local advertisers without Web pages.

AOL also announced a number of other refinements to its search services Thursday. "AOL for some time has been focused on building a search experience that delivers better answers faster," said Campbell.

One such change is that the search engine will now allow users to easily sort results. For example, a user who searches for "Elvis" will be able to classify the results into categories such as "Elvis Costello" and "Elvis Presley." AOL will also supplement Google's search results with AOL's own "snapshots"-- results that include relevant editorial content and information from sites such as MapQuest and Moviefone.

In another revamp of its search offerings, AOL will start using Fast Search & Transfer Inc. to power local search results--accessible through the "in your area" tab at the top of the search page.

The new search capabilities will be available to subscribers as well as non-members--a move that is necessary for the company to make more money from search, said Scevak. "The exodus of the subscriber base from AOL has put downward pressure on queries," he said, referring to the approximately 4 million subscribers who have cancelled their accounts since 2002. More searches originating from an AOL portal--whether by subscribers or not--translates into more opportunities for clicks on advertisers, said Scevak.

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