Click-To-Call is the Next Great CPA ModelWritten by Carl Holmquist
December 22, 2011 # 8:00 am # Marketing Insights, Specials # 10 Comments
Digital advertising continues to evolve fast. When we founded Freespee back in 2008, the world was different: the affiliate marketing business was a fraction of what it is today, and mobile advertising was mostly about ringtones and entertainment. Even social media wasn’t considered a serious marketing channel.
The trend was clear though: brand advertisers were increasingly aware of performance, analytics and optimization – and continuously looking for new, more effective channels to get their message across to their target audiences.
However, there can be no performance without measurement. What we discovered was that this pursuit of performance was based only on online measurement and analytics – leaving out everything that was bought offline, like from a store or through a phone call.
Based on the technology we had developed, we decided to go after the phone calls. GroupOn and CityDeal guys went after the store visits. We believe that we are essentially after the same problem – the huge gap between digital advertising and offline commerce – and we have been able to overcome the hurdles over the years.
The biggest problem has been trying to change consumers’ behaviour too fast. When an advertiser planned an affiliate marketing program, they had to remove their phone numbers from the landing pages – otherwise they could not measure the total amount of conversions, and the ad network and publishers didn’t get the attribution and commissions they deserved.
The consumer was left with no choice: they had to fill out a form and purchase online, or walk away. Yet 65% of businesses say calls are their highest quality lead source.
Essentially, there are two issues with this: firstly, many products and services are so complicated, that it is hard to fully understand them in order to make a purchasing decision without talking to a representative for more information. Secondly, there are many important segments of consumers who still don’t buy online, or at least prefer the personal touch of an appointment or a phone call.
Today, the phone calls are back. Advertisers can use their existing call centre resources to drive customers through affiliate and mobile advertising – and only pay for qualified calls. Freespee, together with our peers and partners, we have brought a new type of advertising currency to the market: phone calls, in addition to impressions, clicks and online conversions.
And we are seeing that the results are great: calls have very high sales conversion rates, on average 20-60% depending on the vertical. This makes complete sense as people who pick up their phone are ready to buy. At the same time, there’s a possibility to do more business, and it is easier than online. The average order values over the phone tend to be significantly higher than in online-only commerce.
Call advertising works great in retail (“mail order”), but also the results from banking, finance, insurance, utilities, education, travel and many local services provided by small and medium sized businesses have been incredibly good.
The next thing that needs fixing is mobile advertising. Mobile internet usage is still growing much faster than advertising on mobile devices, and there is a clear reason for it: as long as people don’t do purchases on their phones, big advertisers will still consider it as an awareness-only channel, without the possibility to attribute the advertising directly to sales.
The answer is mobile Click-to-Call with Cost-Per-Action pricing – a button that connects you directly to the merchant, even directly from a banner. This means the advertisers can buy calls from mobile advertising, instead of just clicks. It’s that simple.