Free, advertiser-supported Directory Assistance, launched six months ago by the likes of Jingle’s 1800Free411 and Infreeda’s 1800411metro, appears to be here to stay. Free DA’s emergence promises to have a significant impact on the $8 billion DA marketplace, which is roughly 1/3 mobile, 2/3 landline. It will also indirectly impact the market for local search and Internet Yellow Pages.
But will free DA mean higher volume or less? More money or less? And what’s the timeline before traditional directory assistance sees pricing pressure? Looking forward, how much time will it be before technology factors such as voice recognition, wireless and email coupon delivery, and text and video delivery play a convergence-like role? All these variables were the subject of debate at The Kelsey Group’s Drilling Down conference in San Jose.
George Garrick of Jingle Networks, the producer of 1800Free411, claimed to be sitting on research showing that 85 percent of consumers would rather hear a 15-second ad than pay $1 or $1.50 for ad-free directory assistance. Rather than eating into existing DA revenues, he made the case that Jingle (and others) was transforming it by switching to a targeted advertising model. “Users are making five times the number of DA calls than they used to,” he said.
Garrick, the former ringleader of Flycast, a bottom-rung advertiser network, also suggests free DA will transcend directional advertising and eat into media spends on magazines and other channels that had earlier focused on demographic targeting. “For all those years, the reason why demographics have always mattered was that there was no way to measure behavior,” he said. “But they don’t really matter. Ninety-five percent of things that people buy don’t relate to demographics.”
He added that 1800Free411 has already seen real results for advertisers. Six percent of callers seeking one number switched to calling a competing advertiser instead, persuaded by discount coupons, clever copy and direct call connect.
Tom Arthur, CEO of PocketThis, added that an automated approach makes total sense for directory assistance queries, which really aren’t all that specialized. “After the top 10 categories, nothing gets greater than 1 percent” of queries, he said.
But not everyone thinks the shift to free DA is real, except, perhaps, for budget conscious 16-25 year olds. Local Matters, for instance, hopes to save premium DA by providing live operator services, updated and accurate phone numbers, and complementary information on Websites. The company has just filed for an IPO.
“There is a material difference between live operators and InfoUSA” generic databases, such as those relied on by free DA providers,” said Local Matters CEO Perry Evans. “You don’t pick a restaurant on proximity. You say ‘I want a decent Italian restaurant to take the client to.’” Evans also cited carrier-sponsored research showing that callers are almost entirely insensitive to DA charges up to $1.75 – largely because businesses pick up the charges.
Me? What do I think? I’ll probably be calling the free services – although I will hate the ads. The fact of the matter is that most carriers rely on the same databases, so greater accuracy isn’t much at issue. While it is possible for the traditional DA providers to differentiate their services with live operators and better tools, improved voice recognition software and a virtual jukebox of value added information should narrow the difference considerably.