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R.H. Donnelly announced today that it will launch a new free directory assistance product, powered by Call Genie, in four markets (Denver, Spokane, Phoenix and Tucson).

1-800-CallDex will include free local category search and provide addresses, phone numbers, business descriptions, hours of operation and payment methods. It will also allow callers to use landmarks, neighborhoods and intersections as search terms, and the system learns over time how to improve itself based on how callers use these terms.

This joins a number of recent announcements that overall represent a push by the directory publisher to diversify its revenue stream, ad offerings and consumer appeal (see Dex’s redesign, SME video initiative and recent partnership with Yahoo! Local).

Free DA is a growing area, and there is still a great deal more advertiser adoption to come. User adoption could likewise grow as voice recognition technologies improve and awareness continues to spread that there are alternatives to paying 2 bucks for a carrier-delivered DA call.

Google’s entrance to the space (goog411) as well as Microsoft’s acquisition of Tellme have accelerated this in terms of shedding mainstream light on the free DA world. There will likewise be better multi-modal functionality that will be developed by DA and mobile search providers as the nascent area develops. Google, for example, could utilize its recently acquired dMarc asset to combine ad placements for DA and terrestrial radio.

These factors, combined with the general advancements and new standards for mobile search beginning to be set by the iPhone (and soon to be seen from the speculated Google phone), make it an interesting time for mobile search and mobile advertising. TKG’s new mobile ad forecast points out, among other things, the growing percentage of free DA calls that will come from mobile devices.

But for now, moves like this in the DA space are designed to remain competitive and gain a foothold for consumer market share in a growing area, against the likes of Jingle’s 1-800-FREE411, AT&T’s 1-800-YellowPages and Goog411. Another important motivation is to begin to offer a more diversified product mix to appeal to a wide range of advertisers, including SMEs.

More specifically, this could be a play to have an established product in place for when advertiser demand reaches the point we think it will. So far, as pointed out in TKG’s recent GYP forecast, revenues from DA services have had minimal impact. This could change soon by way of increasing volume of ad-supported calls, revenue per call and conversion rates.

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