SMB Digital 2012: Performance Marketing
Pay for Performance is the Holy Grail in SMB advertising. SMBs only want to pay for leads that their advertising programs deliver. But moving SMBs from inclusion to performance has never been easy. Recent progress in lead quality assessment has been critical in moving performance media closer to the mainstream, as has the movement toward greater accountability. So what challenges remain in selling performance media to SMBs? BIA/Kelsey’s Matt Booth and Charles Laughlin covered these topics with Ron Burr, VP, Callfire; John Busby, VP, Marchex Institute; Stephen Gibbons, VP, Marketing, Dex One; and Jason Spievak, CEO, RingRevenue, Inc.
BIA/Kelsey’s Laughlin kicked off the panel by asking Stephen Gibbons about the Dex Guaranteed Action (DGA) performance marketing program. Gibbons said that the DGA program was designed to address a problem with the poor perception of print and Internet Yellow Pages. Gibbons shared that the DGA program has been a success. Cycling into its second year, Dex One is benefiting from an 11% lift on DGA accounts versus others for renewals. However, the DGA program is not for everyone. Some SMBs are not willing to jump the necessary hoops to track program (i.e., changing the number customers call to a tracking number; tracking clicks to a different web page, etc.). Gibbons also shared that frankly, it is a more difficult to process a DGA order for marketing consultants. Some marketing consultants want to sell products versus performance solutions. Training and coaching can help address this internal challenge. Gibbons observed that the fact is that Dex One sales teams have sold things a certain way for over 120 years and some are just slower to change.
BIA/Kelsey’s Booth wondered whether Dex One could maintain its guarantees over time, even with early success in renewals. Gibbons responded by sharing a few data points. He said the majority of calls come from print and these are high quality, high conversion calls so performance is more predictable. In-home services as a vertical is a sweet spot. Easy to deliver against guarantees in this category. Guarantees in other categories are different. Dex also takes 20% of chargeable calls off the table for advertiser goodwill by preempting challenges as to a certain number of calls they do not think they should pay for.
John Busby from Marchex spoke to a study on the effectiveness of call ad programs, including tools for measuring success. He noted that SMBs place a very high value on phone calls as way to close. In this study, he was “shocked” to discover that 80 percent of calls are mobile driven. Busby concluded that mobile search with commercial intent is underappreciated by the media. Even with the high call volume from mobile, there are downsides. Booth shared results from a study on mobile calls to the New York City Police Department showing that 40% of calls were accidental calls, aka “butt dials.” Busby responded by saying that Google Mobile found half of mobile calls comes from existing customers (e.g., making service calls versus looking to buy and that 25% are accidental calls. That leaves only 25% of mobile calls as coming from new customers with some probability of converting to a sale. The panel agreed that the industry needs smarter systems for publishers to filter out calls for greater quality control. Spievak noted that it might run $7 to respond to a call, making low quality calls an expensive proposition.
The panel concurred that overall purchase intent conversions (i.e., actually buying something or exhibiting behaviors advertisers are willing to pay for) run about 20%. This varied by category, offer and campaign execution.
Callfire’s Burr said that SMBs are pre-occupied running their business and do not use performance marketing dashboards. As few as 8 percent of SMBs even log into their dashboards. This makes it hard to show the value and have SMBs understand their true costs of acquisition. He’s in favor of sending tear sheets through the mail, “there’s something valuable about getting tangible information in the mail.” The holy grail is getting SMBs to do call management campaigns with a self-serve interface, no integration or IT, and be able to do it over lunch in 15 minutes.