Phone Through Rate is new AdWords Ranking Factor

This summer Google AdWords Call Metrics introduced $1 flat rate click-to-call charge on call tracking enabled ads delivered to smartphones. Now advertisers can bid for calls made via any Google ad. The significant change is that, now, what you bid-per-call will affect ad positions in AdWords which, in effect, means that advertisers can place bids on offline actions rather than on purely online actions, such as clicks (or click to calls in the particular case of smartphones).

Bidding on Offline Actions

The previous AdWords $1 flat-rate charge on call tracking was essentially an incentive for advertisers to invest in deeper call metrics which worked at an AdGroup level. Now with bid-per-call, call tracking numbers can be enabled across every single device and the model has been changed to go beyond call metrics, to an actual auction model for calls.

Whilst one might argue that Google AdWords has simply raised the price on call metrics, the difference here is that the auction model now allows the advertiser to control how many calls they want their campaigns to generate. Also, by bidding higher on calls, advertisers will be able to give their ad positions a boost, without necessarily paying more per click.

For example, an advertiser could have a $1 bid on clicks, but a $5 bid on calls. Whereas previously, only the $1 bid would count towards ad position, now the $5 bid will be taken into account.

If you are an advertiser with a good "phone call Quality Score", then your ad may jump positions over advertisers who simply have high cost-per-click bids (and good Quality Scores). Businesses who are more invested in customer service than they are in their website, may find it easier to compete in a search based auction.

In addition to the new call metrics released this summer (Call start time, Call end time, Call duration, Calls missed /received, Caller area code), Phone Through Rate (PTR) (we previously called this Call Through Rate) and Phone Call Cost will be displayed on the AdGroup and Campaign tabs.

Driving Calls to Improve Phone Through Rate

Sample Ad with Call Metrics Enabled

Whilst Google AdWords editorial guidelines prohibit writing ads that encourage users to click an ad (or more recently hit the +1 button), there is an editorial difference in ad writing for call extension ads because you are allowed to use a call-to-action that urges uses to call for more information.

For example, this ad which urges uses to call for a fast quote, would pass the ad writing guidelines:

First Home Loans

Call 866-555-1111 now for

a fast, free rate quote.

www.example.com/firsthome

However, you are not allowed to put a call to action or phone number in the headline or ad sitelinks. A rule of thumb is that a phone number cannot be used in any clickable portion of the ad, in order to save any confusion about whether an ad click will initiate a phone call or not.

Interestingly, a user has a choice at the point of seeing the ad, on whether to click or to call, so you might wonder if PTR could inadvertently affect CTR. Theoretically advertisers could create ads that deliberately drive PTR up in order to drive higher ad positions. Higher positions drive more clicks which will drive CTR up and CPC down. Seems like a winning strategy right?

This is not the case. In fact, with bid-per-call, Google now has a way to measure total response to an ad - regardless of whether it is a click or a call. The total response to an ad then factors into Quality score along with the two different maximum bids for clicks and calls. The primary takeaway here is that Phone Through Rate and Phone Call Quality Score are now officially part of the AdWords Ad Rank calculation, which determines what position your ad appears.

However, Surojit Chatterjee, AdWords Product Manager, told Search Engine Watch that advertisers need not worry that phone response is cannibalizing clicks because "there are no appreciable differences in CTR for ads showing call extensions vs. not showing call extensions." Put another way, phone response seems to be largely incremental.

Regardless, a link between call center efficiency and ad spend should generate a win for consumers as businesses will have an incentive to deliver better phone based services. Google can still reward ads that users still find most relevant, but now also reward advertisers who bid on the best customer response channel for their business.

Whilst this is just speculation on my part, much of the call metrics available from the AdWords interface (Call start time, Call end time, Call duration, Calls missed /received, Caller area code) ultimately seem to measure a basic set of hygiene factors for running a call center efficiently. It seems logical that call duration and call status (i.e. whether a call is missed or received) may also play an role in determining your actual cost per call.

This suggests that companies with the most efficient call centers could see the greatest gains via the bid-per-call program.

Boon for Small Businesses

However, whilst it may look like companies with efficient call centres will be the immediate winners of bid-per-call, the true winner should prove to be small business.

Bid-per-call means that smaller companies now have access to expensive call tracking technology which will enable them to get data such as customer area codes which was previously unavailable to them. Losing the flat rate charge in favour of bidding means that small businesses can more effectively compete in the auction for the type of conversion they really want. In turn, this might reduce costs on website development and landing page testing.

Talking to Search Engine Watch, William Leake of Apogee Results said, "Google call tracking is a bold step forward on Google's part to really attract a whole bunch of small businesses that historically had no call metrics let alone marketing source codes attached to calls. The big advertisers are already running large call centers powered by enterprise call center systems, with dozens of folks tracking things like duration of call, dropped calls, other calls engagement metrics and call recording. Whereas, small businesses that have the owner answering the phones or, at most, just a handful of reps rarely get that level of detail - so this is a big step forward in proving the return on investment of Google based advertising for small business owners."

Bid-per-call is currently only available in the US and UK. Follow the direction on this AdWords help page to start using call extensions.