AT&T Dials Up Ingenio Buy

When we reported on Ingenio riding the CPA wave, we didn’t know the wave would drop the company on AT&T’s shore.

The privately held Ingenio, which has Benchmark Capital as its biggest backer, joined up with AT&T. Bringing the pay per call technology Ingenio possesses will give AT&T the ability to promote leads across mobile, Internet, or print media as the advertiser desires.

AT&T already does local search advertising through the Yellowpages.com Network, AT&T Real Yellow Pages and 1-800-Yellow Pages. They cited a growing trend towards performance-based advertising as the motivation for making the Ingenio deal.

“As advertisers add performance-based advertising to their marketing mix, this investment makes sense for our business,” said Ray Wilkins, AT&T group president for Diversified Business. Yellowpages.com will be Ingenio’s destination within AT&T, which expects to keep the existing management in place.

Kevin Harvey, general partner at Benchmark and a member of the Ingenio board, could not comment on specifics of the deal. We asked what made now the right time for this deal, to which he averred the timing must have made sense to AT&T at the time.

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The continued adoption of mobile devices fuels that idea, and quite possibly Ingenio’s place in it. Major Internet players like AOL and Microsoft have made heavy pushes to the small screens of the mobile world.

Justifying that push means being able to monetize the traffic. Display and search advertising have a role, but Ingenio’s model represents something more effective.

For an advertiser, the value proposition comes when someone calls via an Ingenio link. The caller’s interest in the business has already been established. By virtue of searching by mobile for a local business, the caller represents a qualified lead.

Once the call has been connected, the advertiser pays and Ingenio collects its cut. The action drives this, not the search or the display. It’s measurable and likely of greater value to the business owner and the ad budget.

By The Kelsey Group’s 2006 Industry Sizing estimates of the potential pay per call market, 14 million websites look like good candidates. Here’s the kicker for the business owner: about 10 million of them don’t have a website at all, and 4 million only have “brochure-ware” sites.

With the ongoing push of Internet companies to the mobile world, we expect the value proposition of click to call to increase, as the market expands to $3.7 billion by 2010 per Kelsey Group’s numbers.

Click to call has the advantage of being a dead simple, straightforward way to connect customers and companies. Simple tends to win over complex when it comes to technology, in many ways, and Ingenio looks like one of those winners.

The poll revealed that 44 percent of mobile users say their phones have improved their personal relationships. Sixty-six percent of women said that their cell phones were personal to them while 60 percent of men said the same.

Almost half of mobile phone owners (49%) use their phone for more than just making or receiving calls and 57 percent believe that in the next three years they will use their phones for more than making calls.

Women are more likely than men to use text messaging (38% women vs. 33 % men), and to take photos (27% women vs. 21 % men). Men are more likely than women to use their phone to check email (12% men vs. 7% women), access the Internet (11% men vs. 5 % women), and find information using a search engine (9% men vs. 6% women).

"There has been a lot of excitement and growing interest around the mobile space in recent years, and it appears that the consumer is finally catching up to the lofty expectations the industry has had for some time,"said Marc Barach, chief marketing officer, Ingenio.

"This opens the door for the adoption of unique services that only the mobile platform can deliver."

Ingenio has fared well with its partnership with AOL in offering these pay per call ads, and Microsoft wants to follow suit.

The two companies announced a partnership today to embed ads from Ingenio’s ad network in mobile searches performed with Windows Live Search.

Big returns have been forecasted for such advertising.

Pay per call becomes more important when considering the context of local search along with it, but as it stands now pay per call could be a multi-billion dollar market shortly:

Pay per call and local search go together because millions of people carry cellphones regularly.

Although usage of cellphones in the US for data services like search has not taken off as it has in Asia and Europe, where faster connections can be found, the wireless companies are trying to catch up and drive more data service adoption.

When that does take place, Microsoft has to fight a host of competitors, including Google, Yahoo, and AOL among others in establishing itself as a mobile search choice.

That can happen if Microsoft can make the kind of deals others have made to be default choices on a particular hardware maker’s phone.

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David Utter is a staff writer for WebProNews covering technology and business.

Editor’s Note: The next frontier in the “Pay Per” format of advertising is “Pay Per Call.” Stop in at WebProWorld’s SES: Chicago forum and tell us your thoughts on the direction of this venture.

We all know about pay per click and pay per performance marketing. You bid on or buy for a flat fee, a term or link and you pay every time your potential customer takes an action. It’s a fairly established model; companies like Google for example, are making a couple of dollars with it and have been for a few years.

To this point, ppc marketing has been more or less limited to businesses with an online presence. Having worked online for several years now I have a tendency to think that just about everybody has a web site now. However, the fact of the matter is, businesses without a website still outnumber their online counterparts by almost 3 to 1.

Plenty of these offline entities would be more than happy to take advantage of Internet marketing initiatives like ppc programs if it didn’t require they develop a web presence and all of the baggage that goes along with it.

There are some companies, like TrueLocal for example, that are trying to reach out to these untapped masses and facilitate their entry into online marketing by simplifying the process and requiring little more than the business fill out a form and create a profile.

Pay per call however, is a whole other ballgame. Pay per call uses the phone, something almost every business holds near and dear to their bottom line and have been using for years.

With Ingenio’s pay per call program, businesses are able to bid on results and have their phone number display in the listing. For the advertiser, the process is very similar to placing themselves in a traditional yellow page style phone book directory, so there is a certain level of familiarity to the concept even among the least tech savvy of advertisers.

Once the advertiser is listed, they are able to choose options like having their listing display only during business hours. That helps to insure the advertisers are able to take full advantage of their results and maximize their program’s effectiveness.

Like Google and other ppc programs, advertisers are able to also able to taste test the concept with very modest investments. Given the cost of traditional paper book phone directory advertising, I would think this concept would be extremely attractive.

It will be very interesting to me to see how this technology develops over the course of the next few years. Will traditional telecoms move to develop their own programs entirely or will they look to partner with companies like Ingenio? Ingenio has distribution arrangements already with AOL Search, AOL Yellow Pages and announced just today a deal with InfoSpace. They are of the opinion that the traditional telecoms will work cooperatively with them as opposed to entering into a competitive situation.

How about Google? Google also has some call technology in use. GoogleTalk is basically a VOIP application dressed up as an instant messenger. They also have features on some listings that display a little green phone icon. When you click it, you’re prompted for your phone number and once entered Google will play matchmaker, call both your number and the company in the listing and step aside.

It’s all pretty cool stuff I think. It will be interesting to see how the non-traditional businesses respond to this as an advertising medium as time goes on. Will the phone book eventually go the way of the dodo? What direction will the traditional telecom giants go? Is pay per call just another tech fad flash in the pan or does it have legs for the long haul? Break out your crystal ball and let me know how you think it’ll go.

Mike is a manager at iEntry. He has been with iEntry since 2000.