Google has formally introduced PPCall this morning for AdWords advertisers in the US and UK. The program is called “bid for calls” and is built on Google’s Call Metrics call tracking program. (There’s some additional detail in my post at Search Engine Land.)
Now advertisers can bid separately on calls — and “call throughs” will be counted in Google’s ad ranking/scoring. However advertisers must use call-tracking numbers, at least for the time being (although mobile permits PPCall without call tracking numbers; Telmetrics can do this also).
Following the introduction of call tracking last year Google discovered that it was driving “millions of calls” from PC ads. Separate bidding on calls (like Click to Call in mobile) should generate significant new revenue for Google in the future.
What’s less clear is how this will play for local advertisers. Obviously calls are valued but the additional bidding capability ads complexity. And how might Google integrate this into AdWords Express if at all?
Will Google’s reseller partners participate and start bidding on calls on behalf of their advertiser-customers? It remains to be seen. Depending on how popular the program becomes, bidding on calls might get quite expensive.
When I was still at Kelsey in 2005 I wrote the first report on PPCall. The forecast that Neal Polachek and I created turned out to be way off (or perhaps just premature):
Pay-per-phone-call (PPCall), performance-based online advertising that delivers telephone calls rather than clicks, will generate revenues of US$1.4 billion by 2009, according to a new report by The Kelsey Group, entitled “Calls, Clicks & SMEs: Driving Leads from Web to Phone.” PPCall could generate revenues as high as US$4 billion by 2009, depending on the average price per call and actual market penetration, which the firm estimates could range between 5 percent and 15 percent by 2009.
As I’ve said previously, this forecast didn’t come to pass because Google and Yahoo never adopted PPCall. But now Google has.
A significant chunk of mobile search revenue is being driven by Click to Call. Accordingly we can expect Google to have meaningful PPCall revenue on the desktop within in a year. It might be even be possible for Google to see $1 billion in call-based revenue from PC AdWords advertisers in 12 to 18 months.
How do you think this will impact the market, especially for local advertisers?
Related PPCall posts:
October 25th, 2011 at 4:01 pm
Greg, what do you think this means for companies like Yext?
October 25th, 2011 at 4:05 pm
Yext was stepping back from PPCall or shifting the focus of the business. The one that may be affected more than Yext may be Marchex. Alternatively it might help them by boosting awareness of call advertising.
October 25th, 2011 at 8:11 pm
I’d not heard of this method of advertising until today. We spend a lot through Adwords and this could be a great new avenue to explore. How is this different than us simply putting our telephone number in an ad and a user clicking that on a smart phone?
October 25th, 2011 at 8:17 pm
Google will track the calls. You can bid on calls for higher placement. If you get lots of calls they’ll boost your ad quality score.
October 26th, 2011 at 12:54 am
Our advertisers are BEGGING for pay-for-performance media beyond pay per click, and in most cases, the value of a call far surpasses the value of a click. We’ve seen SEM programs where the ratio of phone conversions to online conversions is in the neighborhood of 5:1–further proof of the always-suspected-but-often-ignored online/offline habits of the consumer.
Cash-cow for Google. Trouble for Marchex and Ingenio (AT&T).
October 26th, 2011 at 1:25 pm
We’ll see how Google implements the program but I agree it will be very successful for Google. Click to Call has laid the groundwork and conditioned advertisers to pay for calls.