Insider Pages Bets It All on Pay-Per-Call

InsiderPages, IdeaLabs’ women-oriented social network that collects user-generated reviews for local businesses, says it now has “thousands of pay-per-call advertisers” and “is probably the biggest” pay-per- call network.

In an interview with The Local Onliner, Vice President of Product Andrew Shotland, wouldn’t comment on rumors that the company is in talks to be acquired , but he opines that the company would be “an interesting fit with a lot of companies.”

Shotland notes that the company already licenses its 350,000 + reviews – including more than 5,000 reviews in each of the Top 30 markets – to one of the biggest Internet brands, and several others. Although he would not reveal partners, citing contractual reasons, he notes that “our reviews pop up all over the place.”

Pay-per-call, in fact, is Insider’s biggest differentiator in the crowded social/community network space, whose members include CitySearch, Judy’s Book, AOL Local, Tribe, Yahoo! Local, American Town Networks and Backfence. Shotland says the model works, not only for the higher dollars, but because local sites, almost by definition, don’t get enough traffic to support mass media advertising.

“Verizon will always do okay getting Roto-Rooter type” national ads,” notes Shotland. “But we have ads across 100 categories…including a lot of self proprietorships, such as dog walkers, hair stylists. The kinds we bring to the table are fundamentally different. A hair stylist is happy to pay the site’s $4-5 average to get a new customer.”

The ability to rev up the monetization from each advertiser also puts InsiderPages in good graces with its network partners, says Shotland. Search engines and portals have a well-documented space shortage and are focusing more on conversions i.e. getting the highest return for each ad. Most of the portals are largely populated by national and regional advertising, but local advertising attracts user interest more, and has the highest rate of conversions. In the end, “it’s all about yield management.”

The company’s sole focus on local goods and services also places it in a strong position, says Shotland, who feels that social nets like Judy’s Book spread themselves thin by taking reviews for favorite movies and CDs – a point that we think is well taken. At the same time, though, it seems to me that the “lifestyle” type of reviews builds a better community and fewer frivolous “go for the Starbucks cards” that you sometimes see on Insider. (Judy’s Book and InsiderPages both provide $5 Starbucks cards for five reviews).

Going down the road, the question is whether InsiderPages total reliance on pay-per-call will prove too risky, since many potential advertisers won’t want to experiment with the medium. An executive survey by Jupiter Communications, for instance, found that 40 percent of the survey’s respondents were “totally uninterested” in pay-per-call.

Our gut tells us, however, that pay-per-call is going to work well in this limited context, but that InsiderPages will eventually add other types of advertising – or more likely, if it gets acquired, other types of advertising will be added to it.