Today Marchex released a report on click-to-call ads and keyword attribution. As part of the report the company estimated that, based on its understanding of the market, internal SEM data and publicly released Google call volumes, marketers spent roughly $4 billion on mobile search using call extensions on Google and Bing (mostly Google).
In 2005 I wrote an early report about Pay per Call and its outlook. The forecast that Neal Polachek and I created for the report turned out, as with so many analyst forecasts, to be way too aggressive:
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.
It took mobile and specifically click-to-call/call extensions for this market to kick in. Our prediction in the document was, interestingly, $4 billion in PPCall revenues by 2009. Six years later, this is the figure Marchex estimates the market to be worth.
I asked Marchex’s John Busby, the report’s author, how much of the $4 billion he thought could be attributed to businesses that fulfill or service customers offline. He said that it was difficult to answer because of the volume and complexity of the data involved. He casually stated to me that it would likely be a large chunk of that revenue.
I would argue however that businesses seeking to drive calls are mostly about offline fulfillment. An insurance company or home remodeling company operating a call center, that does telephone sales, may close over the phone but the fulfillment is in most of these cases going to be local (or national-local).
It’s getting harder to clearly distinguish “e-commerce” from “offline commerce” because of the increasing interpenetration of the digital and physical worlds. HomeAdvisor’s recent launch of “instant booking” is an example of this — online transaction, offline fulfillment. Groupon, LivingSocial, AirBnB, Uber, Yelp Platform, OpenTable Payments, SERVIZ, Handy, also fall into this growing category.
What are your thoughts on that $4 billion figure? Do you agree with the number and, if so, do you believe most of that revenue can ultimately be called “local”?