• by Steve Smith , Staff Writer @popeyesm, July 20, 2006

Given the industry's obsession with search engine marketing, it's easy to forget that up to 70 percent of small businesses are service-oriented. Plumbers and attorneys still get much more business from phone calls than click-throughs. But after years of search engine trials, online pay-per-call got real for some marketers in 2005.

"It has become a viable option because of the scale it is starting to acquire," says David Roth, director of search marketing at Carat Fusion, who has one client devoting up to 5 percent of its marketing mix to pay-per-call. Verizon SuperPages.com has a program which lets marketers bid on completed calls that come from a directory ad. Vendor Ingenio partnered with YellowPages.com and AOL, which finally gave its platform substantial inventory  1.3 billion searches processed a month. The Kelsey Group projects that the pay-per-call market will double annually over the next five years and reach $3.7 billion by 2010.

"It's been a wildfire," says Mark Barach, chief marketing officer, Ingenio. "This is like pay-per-click in 1999." Ingenio's ads in the sponsored listings area of AOL Search results carry discrete phone numbers the company tracks, then charges and routes to the advertiser. The system even accounts for multiple callbacks from the same customer, so marketers pay only for unique leads, not raw dial-ins. And it's not just for mom-and-pop stores; "high-touch" services like finance and premium travel are buying in, Barach says. Roth uses pay-per-call for satellite TV service Dish Network placements, because it completes an integrated Web marketing strategy. "When we advertise in a medium like search, we need to give people the opportunity to convert into a customer in whatever way they are comfortable."

Google continues beta testing a click-to-call feature that rings a consumer's phone with a direct connection to the vendor, so for now the market is wide open. "We're getting attorneys, mortgage brokers, florists, and private investigators, surprisingly," says Robyn Rose, vice president, Internet marketing, Verizon SuperPages. Marketers bid for clicks or calls in the same system and often use both strategies for different aspects of their business.

For businesses with little or no Web presence, pay-per-call is an attractive way to direct local customers to advertisers. But how do you sell offline businesses on a Web solution? "It's really a consultative sale. We are trying to educate advertisers," Rose says. SuperPages is leveraging its full-service sales and local relationships, as well as its print component, to counter any future search engine challenge. Some SuperPages print directory categories now carry generic ads with a phone number that SuperPages routes through to the current top bidder for the keyword online.

While there are still bargains to be had in the pay-per-call auction space, some calls already cost $30  enough to make Google or Yahoo rethink how to monetize pages and rank ads. "If I were running a search engine, I would find some part of the real estate for call ads that are at least as profitable as search ads," Roth says. "In 2006, the engines are going to be looking at the data. There is strong monetization potential."