Company Uses Phone Conversations to Trigger Ads

The New York Times, Tuesday, September 25, 2007 10:30 AM
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Pudding Media is introducing an Internet phone service that will be supported by advertising related to what people talk about. The Web-based phone service is similar to Skype's online service -- consumers plug a headset and a microphone into their computers, dial any phone number and chat away. But unlike Internet phone services that charge by the length of the calls, Pudding Media has no toll charges. The trade-off is that Pudding Media is eavesdropping on phone calls in order to display ads on the screen that are related to the conversation.

Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriber's computer screen. A conversation about movies, for example, will elicit movie reviews and ads for new films. To give the ads greater accuracy, Pudding Media asks users for their sex, age range, native language and Zip code when they sign up.

Advertisers pay based on how often a user click on their ads, and a spokeswoman said the rates were similar to the cost-per-click prices in Google's AdSense network. Pudding Media plans to add other payment models, like charging for each ad impression or by the number of calls an ad generates to the advertiser. While the calling service currently only works through computers, there is the potential to use it with cellphones.

Read the whole story at The New York Times »
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