August 15, 2012

YP Local Ad Network provides low cost-per-call for most local advertisers

In the current economy, businesses have to do more with less.  Faced with tightening fiscal constraints, many SMB’s are having to rethink their advertising budgets to find the most cost-effective way to turn ads into qualified calls that yield conversions.  In some cases, this might indicate the use of fewer ad channels and the abandonment of less obvious media.  This can also result in a business merely putting all of their ad dollars in a medium based purely on traffic.  A recent study by Altman Vilandrie & Company compared the cost-per-call performance of YP.com ads against Google AdWords with some surprising results.

In the study, a total of 62 businesses from 20 categories in 18 US cities were given $1000.00 to spend per month in both YP.com’s “Platinum Plus Listing” as well as Google AdWords.  (48 of the participants were already AdWords customers.) Utilizing call tracking numbers on both platforms, the researchers filtered out both repeat calls and other false leads and then performed a call volume per price comparison.  The result was that 77% of all advertisers in the study achieved a lower cost-per-call with YP.com ads than with Google AdWords.   The range per product was widely varied—with YP.com producing results from $8 – $162 while AdWords produced cpc’s from $17 – $257.  Results varied by industry—with Air Conditioning providing the greatest difference: $65 (YP) vs. $327 (AdWords).  However, the results didn’t come up “all YP”. Three headings showed the reverse; Garage Doors, Auto Body, and Storage had a closer differentiation but still showed the Google product producing the lower cost-per-call.  (See the chart below)  The study average cost-per-call for the two platforms was $46 for YP.com and $88 for AdWords.

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There are several factors to consider when discussing these results.  The first and most immediate will be claims of bias in the reporting.  The cost-per-call study was commissioned by YP.com and only examined their internet Yellow Pages platform against the popular Google product.  Detractors of Yellow Pages will claim that the results are slanted in favor of the client.  A possible counter-claim is to compare number of advertisers in both systems.  An easy argument can be made that there is simply MORE competition in the Google AdWords space than in the internet Yellow Pages platform.  This means that CPC across the board can be inflated as a result.  Another counter-point could be made with regard to the sample size.  The study states that “for each of the top 20 small business categories served by YP, we were able to recruit at least three participants.”  As such, one result too far out of the expected norm is much more capable of swaying the results for an entire heading.

As with any advertising, a business has to decide what works best for their budget in terms of reach, potential for conversion and cost-per-call.  The recent release of the 2011 Local Media Tracking Study from the Local Search Association shows that during an average month internet search engines are used by roughly 66% of the US population compared to 30% for internet Yellow Pages (IYP) products.  However, 56% of those who use IYP follow that use with a contact and 36% of those that use the product follow up with a purchase.  (Search engine advertising boasts a much lower follow-through rate—2.4% – 4.25% according to Marketing Sherpa.) While products such as YP.com might not receive the same volume of monthly searches as Google, they offer a more targeted focus—the ability to connect with consumers who are actively shopping.  Combined with a potentially lower cost-per-call, internet Yellow Pages remain an essential tool in the array of any SMB seeking to connect with customers at a local level– one that should not be overlooked.