The mobile advertising game got more interesting on Monday when Microsoft and Ingenio, a San Francisco-based company that specializes in delivering pay-per-call ads to mobile device users, announced a deal.
When a mobile user searches for local businesses with Windows Live Search for mobile, they will see a single relevant sponsored link above the search results, which the user can call directly from their mobile device.
Matt Booth, Program Director of Interactive Local Media, at the Kelsey Group, sees big things for pay-per-call advertising. “Our current forecast indicates the market for Pay Per Call advertising is poised to reach $3.7 billion in the next four years, and the rapid growth in mobile search is certain to further Pay Per Call adoption among top-tier advertisers and publishers.”
Mobile ad spending is expected to approach $871 million in 2006 and exceed $11 billion by 2011, according to Informa Telecoms & Media.
Pay-per-call ads can be bid on from Ingenio’s site, where average bids for more spontaneous queries are in the $2 to $3 range, while more specific searches can surpass $20 per call.
Marc Barach, CMO for Ingenio, said that “Mobile searchers are starting to do more than just impulse searches for pizza or hotels. They’re starting to do more in-depth searches for things like residential real estate, cable TV, and mortgage refinancing. There’s a consumer shift starting, where people are using their phones as mobile computers.”
Ingenio began its pay-per-call advertising network in 2004, and since then has inked deals with AOL’s Web and mobile search services, and InfoSpace’s mobile search service.
Last month, Google started testing mobile ads for its AdWords advertisers, and has been testing mobile ads in the U.S., United Kingdom, and Germany.
Yahoo! announced its own mobile search advertising offering which started testing in the U.S. and the U.K. last week. This service differs from Ingenio’s, as it is a pay-per-click advertising model, as opposed to Ingenio’s pay-per-call model.
Though he noted that Ingenio does not have the number of advertisers that Google and Yahoo! have, Greg Sterling, an analyst with Sterling Market Intelligence, noted that “the call-through averages are significantly higher on average on phones than online, since there is less clutter.”
He also noted that users will only see one ad above their search results, as opposed to the various ads that a user will see above search results shown when they conduct queries online.
Sterling also pointed to the idea that users searching for a local business on their mobile devices are more likely to have higher response rates due to the time-sensitive nature of their needs.
Barach denied that the deal was the result of pressure from Yahoo!’s recent announcement, and that Microsoft and Ingenio had been discussing a deal for some time.
“We’re always talking with Microsoft, and we’ve been doing other kinds of business with them for a while. It was an ongoing process of discussions,” he said.
“The growth in mobile, local and vertical search is undeniable, all of which make the Pay Per Call advertising model more relevant than ever before,” Barach said in a press release.
The financial details of the deal were not made known, though the ad revenue will be shared between the two companies.
In late September, Microsoft announced a deal with Nokia to deliver its Live Search to Nokia’s mobile device users.
Sources:
http://biz.yahoo.com/prnews/061009/sfm039.html?.v=62
http://www.redherring.com/Article.aspx?a=19040&hed=
Microsoft+Readies+Mobile+Ads§or=Industries&
subsector=Communications
http://www.clickz.com/showPage.html?page=3623631
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