AT&T has bought Ingenio and will use its call tracking platform across Yellowpages.com, 800-YellowPages, Mobile and Print Yellow Pages. We think the deal is quite important. This is a story that will unfold in the months ahead as more information about integration becomes public.
For a while now, we have been saying that the inclusion of call tracking is the inevitable conclusion of a true multi-platform business where usage is distributed across mobile, print and the Internet.
Our view is that call tracking provides a sort of “portfolio optimization” of lead delivery. For example, if the Internet cannibalizes consumer usage traffic from print, call tracking can make up for the declines via mobile or search.
This is easier said than done. But we have viewed this outcome as a foregone conclusion for some time.
Some will say this acquisition is defensive posturing. We disagree. If you take AT&T and list the company’s portfolio of assets, you quickly realize that it maintains a leading position in every key market in which it operates save one: the Internet. Even with the latter, we’re talking about overall usage and not the ability to successfully sell SMBs into the channel, per se.
Market fragmentation is making advertising more complex, time intensive and accountable. But advertisers want accountability and simplicity. This gives it to them.
In our view, Ingenio is a good acquisition for AT&T for a few reasons:
It’s profitable, with revenues rumored to be north of US$100 million.
- It has key distribution with key portals like AOL.
- It has substantial technical experience in pay-for-performance, call optimization, call tracking and lead tracking.
- It’s rumored to have hundreds of key patents around call tracking, pay-for-performance and cross-media lead optimization.
- It has deep experience with PFP bidding engines and placement.
- It has a strong management team with big ideas about multi-platform lead optimization.
This shows that AT&T has enormous plans across all the company’s business units. In our view, this includes print directories as well. There are numerous categories, for example, where prices have risen to such an extent that many advertisers have left the print book. Value-based pricing opens the door to bring back advertisers, sell new ones and retain more of the current ad revenue base.
In the end, value-based advertising is what this is all about. This means simple and accountable results for advertisers. If AT&T can successfully employ this strategy across the company’s diverse set of assets (print Yellow Pages, Internet, mobile, directory assistance and ad-sponsored DA), it will have managed to push to the forefront of the strategic landscape.
We’ll have more to say later.