This post was originally published on Street Fight on February 27, 2015.
In order to build efficient pay-per-call campaigns, businesses have to decide on the bid strategies most suited to their industries and goals. Some of these may be borrowed from pay-per-click approaches, but there are additional ways to optimize for pay-per-call success.
Having an effective bid strategy can influence the return on investment of any pay-per-call campaign. According to a survey by Google, 73% of mobile searches trigger additional actions and conversions, and 55% of those “purchase-related conversions” happen within one hour of the consumer’s initial search. Utilizing the right bid strategy is one way that merchants can ensure they’re getting the most out of their pay-per-call campaigns. (Also read “4 Strategies to Increase Pay-Per-Call ROI for SMBs.”
Many of the same bidding strategies that marketers have long used for pay-per-click campaigns will also be applicable to pay-per-call. However, it is important that marketers are familiar with the most popular options before making a decision.
For most businesses, selecting the right bid strategy comes down to choosing between impressions, clicks, and conversions.
Like the impressions used in traditional web advertising, pay-per-call impressions reference the total number of consumers who learn about a business as a direct result of a marketing campaign. With pay-per-call impressions, businesses can expect to pay based on the number of callers who hear their ads played or see their businesses when conducting local searches online.
One way to determine if an impression based bid strategy is right for you is by evaluating the audience you are trying to reach. Businesses that are primarily interested in promoting their services to the largest number of potential customers, regardless of intent or demographic, are generally best suited to utilize impressions as a pay-per-call bidding strategy. Although these businesses fall into a number of different industries and verticals, it’s generally thought that restaurants and retailers can benefit the most from impression-based bidding.
Another advantage to impression based bidding is that it allows you to stretch your ad budget further. Typically impression based bids are priced lower than click or conversion based bids. With lower bids, advertisers can broaden their reach over a larger set of target customers. Utilizing an impression-based bidding strategy enables businesses to indiscriminately generate interest from consumers whom they may not have been able to capture through other methods of online targeting. This strategy also allows businesses to set the highest amount they’re willing to pay, based on the number of impressions, without fear that they may exceed that amount. With impression-based bidding, spending on pay-per-call advertising never changes without a business’s direct consent. Of course, the more a business pays per impression, the more likely it is that consumers will hear about the business when searching online.
In the world of performance marketing, businesses have long relied upon click-based bidding strategies for generating positive ROI. This bid strategy involves charging merchants based on keyword auctions for clicks instead of the number of actual calls that were placed by consumers. Among those who believe calls are significantly more valuable than web clicks, click-based pay-per-call bidding strategies have become a viable option.
The downside of a click-based bid strategy is that businesses may be charged for calls that were accidentally placed. These calls are less likely to lead to actual sales, and yet businesses are still stuck paying the pre-designated price-per-click. Many networks track and bill clients based on the number of clicks generated by their click-to-call ads, regardless of whether those calls ever connected or completed. If a network is tracking clicks instead of connected calls, the business could potentially be paying for calls that never came through. As a result, click-based bidding strategies are beginning to decrease in popularity in the SMB community.
A conversion based bid strategy is one where a merchant or advertisers is only charged when the agreed conversion criteria for the call is met. Businesses that place a premium on scheduled appointments — including doctors, contractors, lawyers, plumbers, and other home service professionals — will often rely on conversion-based bidding strategies for their pay-per-call campaigns. Rather than paying based on the number of calls or clicks, businesses that use this strategy can expect to pay based on the number of “actions.” The more stringent the conversion critera, the higher the typical bid price for the call will be. Advertisers can expect a higher yield from these higher qualifed conversion based leads.
Ad networks will typically determine what constitutes an “action,” and call duration and actual conversions (liked booked appointments) are the most common qualifiers. For example, a merchant may agree to pay for all calls that run at least 60 seconds. The network is responsible for tracking the duration of calls that originate from its system and billing the client based on those amounts.
The most effective call is one where the consumer’s intent is perfectly matched with a pre-determined set of merchant choices. For example, it’s easy to determine that a person who searches for the phrase “Los Angeles optometrist” is probably looking to book an appointment with an optometrist in the Los Angeles area. Conversion-based bidding strategies capitalize on this metric.
As always, an effective bidding strategy comes at a price. Businesses can expect to spend more for conversion-based bidding than they would with other bidding strategies. The reason for this is because merchants who go this route can expect their campaigns to generate an exceptionally high ROI, with the majority of callers actually setting up appointments for services as a direct result of these campaigns.