Oldie But Goodie – Pay Per Call and Local Services

Hard to believe that the post below was originally published more the SEVEN years ago in October 2006. Thanks to Sean Fenlon was sharing it with me recently. It’s equally inspiring to see how much has changed technologically but the core values – “a human talking to another human” per Sean, remain the same.

Pay per call reminds me in many ways of online video. It’s an area that shows tremendous growth and promise, but at the same time is so broad and has so many applications that wrapping one’s mind around it is difficult. There isn’t and can’t be one definition or implementation. One of the more intuitive implementations involves what is discussed in the following article – Pay per Call and Local Services. It entails a company that might not have a website, being able to place an ad online and connect with customers through an intermediary. The intermediary in this case doesn’t create a website, collect leads, and then sell them. This intermediary has created an interface whereby the local company can enter their ad and the telephone upon which to receive the call. The pay per call provider creates a trackable, toll-free number for the user and then bills the advertiser accordingly based on bids.

If we take a step back and think about what pay per call means, it doesn’t by definition have anything to do with local services. That just happens to be an intuitive implementation. All it really means is charging a merchant for a call to take place. One of the earliest and proven forms involves the pay per call equivalent of an online advertising network. The consumer sees an ad on a site, calls a trackable number, gets in touch with the merchant all without realizing that another company facilitated. While the consumer initiates the call in this model, what if instead, a third-party called the user and offered to connect them with a merchant? This is just what Double Positive in Baltimore, Maryland has done.

The reason for featuring the type of pay per call implementation practiced by Double Positive in this piece is two fold. First, it’s to highlight a method that has immediate plug in to the lead generation space, and second is because their method doesn’t compete with existing lead generation companies. It acts as an enhancer, much like TargusInfo does. Had they wanted to, the company could have created a pay per call lead generation company that bought traffic from the search engines or from display ads and had users dial a phone number. Most people when challenged with creating a pay per call play in the lead generation space probably would have.

I had the opportunity to chat with Sean Fenlon, CEO and founder of Double Positive about his business. Prior to Double Positive, the other company which he helped lead also operated in the lead generation space. That company was among the earliest in generating leads for the mortgage banking sector, and after being sold he decided to pursue his version of pay per call, which has become known more commonly as hot transfer leads. Companies pay per each call, but rather than a consumer calling in, the user, as mentioned before, is connected with the lead buyer upon first being contacted and qualified by Double Positive.

The goal of lead generation is as Sean puts it, “a human talking to another human.” With today’s lead generation though, it is at the end of the day still an inexact science. Consumers have submitted their information in order to be contacted, but for a number of reasons they might not get contacted. This is where Double Positive can assist. They work on behalf of the lead generator to make sure that consumers’ expectations are fulfilled. If a user expects four choices, but the lead generator can match only three, then Double Positive can proactively call the person and match them once more.

The proactive pay per call, this notion of a hot transfer of interested lead to waiting advertiser has some powerful implications. It can help improve quality by ferreting out the gems from typically lower quality such as co-registration. It can also be used to help check quality and filtering. Leads that might have been rejected by other clients as uncallable or bad can be sent to a firm such as Double Positive, and their efforts will help validate what other clients say or lead to incremental revenue if in fact they turn out to be good. It’s a win-win for lead generators because they get valuable feedback on the leads and/or money.

Double Positive currently focuses primarily in mortgage leads, but they are expanding to other verticals including education. The idea of taking a lead and transferring it in real time to another human being just makes sense after you hear about it. Judging by the results, it must make sense to lead buyers too. They can’t seem to get enough. And, similar to local advertising via pay per call, the hot transfer is here to stay. It’s nice to see though an implementation like Double Positive’s that leverages the existing lead generation companies as opposed to trying to compete directly with them.

Interview with AutoWeb.com President Jose Vargas

Last month, lead gen industry veteran and multiple exit entrepreneur Jose Vargas made headlines by announcing that Autobytel made a significant strategic investment in his latest startup AutoWeb. It’s an exciting announcement and casts a spotlight on an industry that has been at the periphery of the LeadsCon ecosystem but should now come to the forefront.

I chatted with Jose about AutoWeb and am happy to share the results of our conversation with LeadConfidential readers.

Most people will recognize you from BrokersWeb and HealthCare.com. What have you been focusing on post-BrokersWeb and how did that lead to AutoWeb?
Since transitioning from BrokersWeb my partners and I started a holding company called PeopleFund. We have funded over 24 tech companies around the world including GetAround, PlanetaryResources, PlaySpace and Summit Powder Mountain. Also we have incubated/founded companies like BlueKite, an innovator in payment technology and ContactUs.com a SaaS solution for SMB websites to generate and manage leads.  We are always looking to add value into new ventures by applying our 14 years of experience building and growing internet companies.

One thing we learned from BrokersWeb is that if you focus and specialize in one vertical, you can become really good at it, and ultimately build a scalable and sustainable business with clients diving ROI from our traffic and publishers higher monetization. Automotive is a very large vertical and our thesis is that we can also innovate and improve the way both manufacturers and dealers are acquiring traffic.

What else led you to decide on the automotive market?
For us it was the sheer size of the market. This year automotive ad spend will be $33 Billion of which $10 Billion is online/mobile spend. Moreover, the online/mobile spend share is growing at 20% per year.

That is a big market and hard to crack from scratch. Speaking of which, the strategic investment by Autobytel is a first that I’ve seen in our space. How did that come about, and how did you get a public company to buy-in to an idea?
Autobytel is a pioneer in automotive consumer information and leader in automotive lead generation. They launched in 1995, went public in 1999 and have great and long standing relationships with manufacturers and dealers. We originally approached Autobytel as we were researching the space. We wanted to learn more about the players, the market and the opportunities. As we shared our experience with the Autobytel team we quickly realized that there was an opportunity to improve the way manufacturers and dealers target in-market consumers online and mobile. From the beginning Autobytel was encouraging to our ideas and we are very flattered to have such a recognizable player as our partner. Autobytel participated as our lead investor, Jeff Coats joined our board, and we also got the name of our new venture from them, they owned the domain AutoWeb.com and we really liked the name.

Yes, I bet you did like the name! As this isn’t your first time creating marketplaces from scratch, how do you approach the challenges of a business where you need both supply side and demand side to be successful?

It’s actually a simple approach if the focus is to provide value to both the client and traffic partners. There has to be a clear understanding of the needs of the demand side in generating customers, return-on-investment and acquire in-market traffic. From the supply side, the way to develop lasting media channels (both O&O and third-party) is to have best-in-category monetization, constant optimization and by being a source of incremental revenue.

Our approach to building a growing and sustainable marketplace is centered in understanding the needs of both the advertiser and traffic partners and applying the right data and processes.

What is the hardest part you have found when trying to build such a business?
It’s all about execution, for us the hardest part is to put the right team together with the right experience and talent to drive the product and company. This new venture is also a challenge because we need to build a technology platform with capabilities and features that we have never built before. The bright side is that we can start with a blank canvas on the initial technology build, and make mobile a centerpiece development of our product and strategy.

Also, we will not only be a marketplace/platform play. We have very aggressive goals for developing innovative, consumer-facing web and mobile products that will focus on providing an awesome user experience. Building for consumers is always challenging, but we see a huge opportunity as well.

Do you see AutoWeb able to be as big as BrokersWeb? 
We learned a lot from our BrokerWeb experience, especially from all the mistakes we made. We are confident that if our everyday focus is to provide value for our clients and media partners AutoWeb can make a positive impact as well.

I’ll take that as a yes. Auto, though, is a fairly established category with many players. Are you able to share where you saw the opportunity that others have yet to capture? 
The fact that the category is established and that there are many huge players convinced us that there is an opportunity to innovate and execute differently.

In addition to the funding news, you also shared some other good news with me. You will be back at LeadsCon Vegas 2014 correct?
Most definitely! LeadCon is more than a conference. It’s a productive collection of ideas, people and visions for our industry. We are looking forward for LeadsCon to be part of our new challenge AutoWeb and our new automotive focus.

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