The purchase of Ingenio will help advertisers generate phone leads and manage their ad platforms…
“In a bid to bolster its directory and local search business, AT&T announced it was acquiring San Francisco’s Ingenio, a pay-per-call company.”
AT&T agreed, Monday, to acquire pay-per-call search provider Ingenio for an undisclosed sum, a move that bolsters its directory service and local search advertising offerings.
“The terms of the deal, which is expected to close early next year, were not disclosed.”
AT&T said that, with Ingenio’s services, it can “take advantage of a growing trend toward performance-based advertising” and give advertisers a way to purchase leads in a consistent manner across various media, such as search engines and mobile devices.
“Ingenio will become part of AT&T’s YellowPages.com.”
Pay-per-call is designed to help businesses better manage ad programs and generate more phone leads. Founded in 1999, Ingenio describes itself as a leader in “live-search commerce.” The company’s main product, called Pay-Per-Call, is a pay-for-performance advertising service that enables the purchase of live customer phone call leads generated through Ingenio’s online and mobile search advertising network.
Like sponsored links systems; Pay-Per-Call allows advertisers to bid for a higher placement in paid search results. But instead of having a link that takes users to their Web sites, advertisers can display a toll free number.
When a business buys an ad on Ingenio’s Pay-Per-Call Network, it is shown in Web search results, Internet Yellow Pages, mobile search, free directory assistance, and podcasts. Online search and Yellow Pages include AOL Yellow Pages, Infospace.com, Switchboard, and Magic Yellow. Mobile search includes MSN Mobile, AOL Mobile, and Mapquest. And directory assistance includes 1-800-FREE-411 and 1-800-411-SAVE.
Ingenio provides technology that allows online marketers to charge for every call to a 1-800 phone number listed on an advertisement. Advertisers receive a unique toll-free number and they only pay when customers use the number.
AT&T expects to fold Ingenio’s technology into its search and directory products like YELLOWPAGES.COM Network, AT&T Real Yellow Pages and 1-800-Yellow Pages. The move allows AT&T to get into more performance-based advertising, which is a growing trend in online advertising. Ingenio had already inked deals with AOL and Microsoft Mobile to provide pay-per-call ads.
“Throughout the past few years, we have built and deployed innovative products that help the services economy flourish online,” said Mark Britto, president and CEO of Ingenio. “What we have lacked, however, is scale and the ability to bring those solutions to the market in the biggest possible way. Our merger with AT&T allows us to bring our innovations to more businesses nationwide.”
The ads by businesses include phone numbers to call for more information. The number is toll-free, and is provided by Ingenio. Any calls on that number are forwarded to that business’ phone, and are tracked by Ingenio for billing and reporting.
“Advertisers’ fees are based on the call volume of these leads.”
For consumers making the call, there is no charge or fee. The charge to the business is based on the number of phone calls from that ad. There is no charge for follow-up calls, short calls, hang-ups, or unanswered calls, or if someone calls when the ad is not running.
The arrangement is similar to pay-per-click advertising, except that the business does not need a Web site to participate because the connection is made by phone. Ingenio promotes the idea that the phone calls can be better than clicks because they use live people and because Ingenio’s system can accommodate the 13.8 million small businesses that do not have e-commerce-enabled Web sites.
“Ingenio also said that, like a pay-per-click ad, a business can easily sign up, create ads, bid for position in search results, and manage a budget or accounts at any time.”
Ingenio can be used by individuals as well as small or local to larger national businesses. The company said industries such as mortgage, real estate, financial services, travel, car rentals and florists bid for placement for exposure on the Ingenio network and pay an average of $8-$10 (bidding across all categories starts at $2 per call).
AT&T, which picked up Web conferencing and collaboration software maker “Interwise” Oct. 1, plans to use Ingenio’s Pay-Per-Call software as a platform for advertisers to purchase leads across online, mobile or print to create performance-based ads.
“Ingenio customers include AOL, Microsoft, SmartPages.com and TaxAct.”
Kevin Harvey, a general partner with Benchmark Capital, the largest shareholder in Ingenio, said the pay-per-call area was attractive and strategic to AT&T. “The integration is going to benefit their Yellow Pages advertisers,” Harvey, who also is an Ingenio Board member, said in a statement.
Separately, AT&T has already been working to expand its Yellowpages.com business. The company recently expanded its mobile search products with a Web application for iPhone users and a downloadable local search application that is currently available on 20 different AT&T handset models.
Following the acquisition, which is expected to be completed in January 2008, Ingenio will be integrated within AT&T’s Yellowpages.com and overseen by Charles Stubb, the CEO of that AT&T division. AT&T also said it expects to retain Ingenio’s management team which sounds eager to plug into the phone giant’s considerable resources.
The operators of online advertising platforms, including Google and Yahoo, are increasingly looking for ways to display more targeted ads and improve the usage of ads. For example, some companies are experimenting with advertisements that let mobile users click on the ad and automatically call the advertiser.
AT&T vies with rival carriers Verizon and Sprint on the mobile front. However, Internet search and content providers such as Google are increasingly turning their focus to the mobile ad space, which is expected to be the next multibillion dollar online ad opportunity.