Google Puts On Hold Pay-Per-Call Web Ads

Instead, the company is focusing on other types of ads, including ads sent to cell phone users and pay-per-action ads.

Google (NasdaqGS: - ) wants to find new sources of revenue apart from its text-based pay-per-click ads. Pay-per-click has become a big hit with advertisers because they pay only when a consumer clicks on an ad.

But Google's attempt to include phone calls in its ad service hasn't been as successful. With pay-per-call ads, an advertiser pays each time a consumer calls the company after seeing an ad posted on Google or its partner Web sites.

Pay-per-call isn't a priority for now, says Nick Fox, Google's director of business product management.

"Our focus has been more on things like pay-per-action and less on the pay-per-call area," he said. "We have run some tests on pay-per-call to see what the optimal advertising and user experience is there, but we don't have anything specific to announce around that yet."

Google launched a pay-per-call program -- it calls it "click to call" -- two years ago.

If a consumer clicks on a click-to-call ad they are instructed to enter their phone number. Google then calls the consumer's phone number and connects the person to the advertiser. Google pays for the call and collects a fee for the lead from the advertiser.

Small Businesses Like Calls

Google won't say how many advertisers have signed up for the click-to-call service.

Fox says the company is still wrestling over a few issues with pay-per-call. "The key things are, for what set of (online search) queries does it make sense, and is the user really interested in calling an advertiser vs. visiting a Web site?" he said.

Some companies offer pay-per-call.

Ingenio, a Web services company that AT&T (NYSE: - ) this week announced it would buy, has been offering a pay-per-call to advertisers since 1999. It offers pay-per-call ads that run on several Web sites, including Time Warner's (NYSE: - ) AOL .

Ingenio executives say pay-per-call is best suited for small businesses that prefer dealing with customers over the phone.

With pay-per-call, advertisers get the power of the Web while still connecting with customers on the phone, says Marc Barach, Ingenio's chief marketing officer.

"There is a tremendous appetite among advertisers to buy phone calls in order to reach these consumers who are searching for products online," he said.

Advertisers pay on average $8 to $10 per call made via a pay-per-call ad. That's up to six times more than they might pay for a typical pay-per-click ad.

Produces 'A Hot Lead'

"To our clients, (the price) is very well worth it because it's such a hot lead," said Danielle Leitch, executive vice president for MoreVisibility, a search-marketing services company that helps companies advertise online. "The ability to close (a sale) becomes much greater when you are dealing with a customer person to person over the phone."

Pay-per-call is just getting started, but research firm Kelsey Group says pay-per-call ad revenue in the U.S. in 2009 will top $4 billion. By comparison, all paid search ad revenue in the U.S. surpassed $4 billion in the first half of this year, and is growing at a more than 40% per year clip, says a recent report by the Interactive Advertising Bureau and PricewaterhouseCoopers.

Most consumers and advertisers haven't embraced pay-per-call though it seems to work, says Bill Leake, chief executive of Apogee Search, a marketing technology company that helps companies advertise online.

"The quality of the leads that come from pay-per-call are typically great," he said. "It's just that there aren't a lot of them."

Google's Fox says the company might give pay-per-call more attention as it boosts efforts to get ads to mobile users.

"It may make much more sense in the mobile space," he said.