Local advertisers who sponsor free Directory Assistance (DA) services are
seeing high conversion rates, as consumers happily accept “steal away”
messages from competing businesses offering audio coupons, expedited delivery and other promotions when they call in for a specific number, according to Jingle Networks, which operates 1(800)Free-411.
In limited testing , a Jingle press release asserts that local advertisers are doing gangbuster business by sponsoring Free DA (aka “talking yellow pages”). Consumers who use the service must listen to the 10-20 second ad before their requested number is provided.
The company says that a local locksmith got 21.9 percent conversion rates, an online ticket broker got 13.4 percent conversion, a cable and telecom provider got 10.6 percent conversion, ServiceMagic got a 10 percent conversion, a national pizza delivery company got 6.8 percent conversion, and a local automotive services company got five percent conversion. The release quotes a Service Magic executive as saying that his conversion rate is “double” the four-to-six percent that the company might have gotten on a search engine.
The Pierz Group: Local is Key to Free DA’s Success
Jingle’s release coincides with the release of “Advertiser Paid Info Services: Understanding ‘Free’”, a groundbreaking report by my colleagues at The Pierz Group, which is probably the leading authority on All Things DA. The report projects that Free DA will constitute 25 percent of today’s 6.1 billion DA calls by 2010.
According to the report, Free DA’s impact on today’s $6.5 billion industry is not entirely cannibalistic, since Free DA callers are calling more often than traditional DA callers. Some current users, for instance, dial-up free DA four times a month, while traditional DA is used twice a month. The report notes that the high cost of today’s DA calls, having increased 100 percent in just five years, probably inhibits today’s marketplace – even though just 7 percent of users know exactly how much their service actually costs. DA now averages $1.10 for landline services and $1.50 for mobile.
Another inhibitor is that consumers are not aware of the “information portal” type capabilities of the new DA services. For instance, one service enables users to determine the nearest landmark to a cross street. Another feature enables services to text message the phone number right to a user’s cell phone. These features ought to boost usage as well.
Presently, The Pierz Group notes there are four U.S. providers: Jingle Nets (1(800)Free411), InFreeDA (1(800)411-metro), 1(800)411-Save and 1(800)San Diego. All the services launched in late 2005 or early 2006 and are focused on national markets, other than the latter service, which pioneered free DA use in 2002 and now provides local services to 16 California cities,.
The services’ national focus enables them to have an easier time of populating their ad inventory, using Pizza Hut and other natoinal companies. Pierz notes that 1(800)San Diego has the best quality service in many regards, and attracts 650,000 users a month. But it has had trouble selling enough ads in the 16 communities it serves to break even.
Going forward, The Pierz Group suggests that the Free DA providers must focus on local sales channels if their ads are to be relevant to users, and if the services are ultimately to succeed. The services are ideally positioned as a “level playing field” for local services since they can be tailored by zip code or locality name. For this reason, Pierz believe that it is inevitable that local Yellow Pages or portals will eventually purchase one or two of the services.
Some Don’t Believe It’s Really Free
One problem that has emerged with FreeDA, however, is that many consumers don’t believe they won’t be charged – perhaps due to the huckster-like nature of the services. One consumer contacted The Local Onliner and complained that Cingular had charged her for eight calls she had made to 1(800)Free411. She contended that two different Cingular service reps told her that the company reserved the right to charge for any DA call made on its system, and would not allow itself to be “bypassed.”
Upon investigation, it appears that the consumer had simply become confused at the time lag between her bill and usage. Jingle Nets President Scott Kliger told The Local Onliner that billing confusion happens too often, as consumers transition to free services, and face a one-or-two month lag in their billing.
For my benefit, in fact, Kliger pulled up the consumer’s calling history, which allowed him to look at details of every call and information request that she made. This is a reporting capability that will be very impressive indeed as the company provides targeted advertising to its users.
As for the alleged comments by the customer service reps, they do not reflect official company policy, according to Cingular PR. If the comments occurred as stated, they may have been isolated, knee-jerk reactions by billing reps that are constantly fighting off customer complaints. In fact, it is hard to see how Cingular’s billing system would be flexible enough to have manipulated the system on such a localized basis.