Pay Per Call Company VoiceStar Acquired by Marchex
Nick Gonzalez
20 comments »
Pay per call advertising service VoiceStar has been acquired by local advertising company Marchex.
Terms of the deal are as follows:
Marchex total anticipated investment to acquire VoiceStar will be $28 million, consisting of approximately $20 million in transaction consideration and $8 million in company investment. Specifically, transaction consideration consists of approximately $12.9 million in cash consideration and Marchex will issue approximately $7.1 million in restricted stock that is subject to vesting over two-and-one-half years from closing to certain employees of VoiceStar; and company investment consists of $8 million relating to products, infrastructure, human resources and other items through 2008. The acquisition is expected to close by October 1, 2007.
VoiceStar helps track how effective your newspaper and online advertising campaigns are at generating calls to your business. To do this, they sell advertisers a block of phone numbers ($10/month/number) to be placed in news papers or on websites. Each number is unique to an advertising campaign and can be linked through a softswitch to your existing phone lines.
For instance, the number from a newspaper campaign can be routed to a specific department or only accept calls during business hours. VoiceStar then tracks calls from these numbers as they are routed through their softswitch to your phone line. They can then compile data on the return on investment from each of these campaigns distinguished by phone number.
VoiceStars primary clients are advertising networks, who use the service to help individual advertisers. As of this past February, they claimed 400 clients with 20,000 individual advertisers working through those clients.
Other competitors include Ingenio and eStara. Google has also dabbled in click to call.
???
Does anyone else understand what they do?
I was wondering the same thing!
They provide call tracking and pay per call capabilities to publishers and advertisers. Call tracking offers unique phone numbers that indicate the origin of a call. Pay per call is like pay per click except that the billable event is a phone call rather than a click.
Advertisers bid on calls in the same way they’d bid on clicks. The average call range is $8 to $10 but calls can exceed $100 per call. PPCall is being used in mobile right now too.
As one of Voicestar’s early customers I can tell you that Todd & Ari have created an absolutely top-rate service and Marchex was very smart to bring them into the fold. While there are plenty of other pay per call providers out there now, these guys were fairly early in creating a unique model for publishers and agencies to create their own pay per call businesses.
You’re far too generous in calling Marchex a local advertising company. To be clear, they are a domain parking service masquerading as a real company. THey own a bunch of third rates sites/businesses that they are too embarrassed to list on their own web site.
This is a solid service they bought. I only feel bad for their customers. They’re about to be placed on a ton of fake web sites. Yippie!
Never heard of them, don’t really care. Why is this on TC??? Slow news day???
Congrats to Ari! A real hardworking and smart entrepreneur. Good to see he’s taken the company to this level.
Without question this is the right idea. However, Marchex could have acquired the same technology for less than $3M.
Today, this technology platform can be put together by using Asterisks (”almost free of charge”). The only group that is probably happy as pigs in mud must be is First Round Capital (http://redeye.firstround.com/). First Round Capital must have seen the writing on the wall and pushed for the sale of the company. Josh Kopelman from First Round says “The fact that a company can exit for $20 million and still be a “win” for both founders and investors…..”. Hey, what happened to the employees?
On the other hand being a Marchex shareholder I would question the price that was paid. That said congratulations to First Round Capital, AMEN!
Interesting, are there any large platforms for checking the metrics on many campaigns using one interface? I’m looking into the tracking of numerous campaigns in various media and I can’t find any large solutions yet. Anyone have any ideas for other tracking mediums for other services? Also, does this service track the calls based on the campaign and media or does it just track the calls for certain numbers and you would have to mash the data together?
iMarketingGuru check out Who’s Calling http://www.whoscalling.com/
These guys offer extensive reporting tools. Ideally, you should be able to look at a single reporting dashboard that reflects all the data…..
Last year Who’s Calling did a something like $50M in revenue compared to Voicestar who is supposed to do $1.5M in 2007.
Ironically, Who’s Calling was purchased in the range of $50M-$60M (1x revenues). Voicestar is being purchased for 15X revenues. Again, Amen!
for visiting.
i would not use who’s calling. WAY over priced. voicestar has everything you need and very responsive customer service. I shopped all the call tracking services and voicestar is hands down the best out there. I have been a customer for over a year now. One very cool feature of their service that helps track offline conversions is what i call “dynamic call tracking” which enables to track conversion from any online campaign. you put a piece of their js on your site and it simply looks at the refering url(ie. ppc campaign url from google) and then it rewrites the websites existing phone number to a unique call tracking number for that campaign.
congrats ari, todd and jon!
VoiceStar, has a feature that cracks me up. When you go to a website that is using VoiceStar, it takes about 2-3 seconds for the tracking toll free number to replace the original toll free number. The first time I ever saw this, I thought I was hallucinating. We almost implemented this for a massive client of ours. The embarrassment would have been tremendous if we hadn’t noticed the number lag before it was set up for the client.
Also, VoiceStar only shows you the search engine the call came from. If you want keyword level tracking you have to go with the Whos Calling service. VoiceStar kept telling us that we would get keyword level tracking, but then after looking at some of the reports we noticed it was adgroup level tracking.
Scott,
We’ve never seen this problem–sounds like you did a poor job integrating the voicestar JS. Voicestar’s metrics are much more granular than whoscalling’s. In fact, Who’scalling doesn’t even have an API, let alone click to call, form to phone or other useful online services!! Who’sCalling serves car dealers–a much less sophisticated group than angencies and publishers.
Never got to the point of integrating js. We noticed the lag on a few of the sites of clients we were told were using VStar. Also, on the Vstar website.
Maybe this was because of reverse proxy.
“a much less sophisticated group than angencies and publishers.” - LOL! I almost spit the caviar and moet de chandon I was eating for lunch all over my screen after I read that!
we use clickpath (whoscalling) and from what I can tell they are not competitors with voicestar, different products.
does anyone know, with pay per call what determines a $8 call vs a $100+ call?
iMarketingGuru, we just launched earlier this week and we aggregate clicks, calls and email responses to advertising campaigns whether online or offline. Check us out at http://www.adsymetrix.com
Congratulations to Ari on all his hard work and on a nice exit with Marchex. Marchex’s display of commitment to PPCall gives further encouragement other self-funded pay-per-call pioneers such as we at wwww.ZiffLeads.com (launched in 2005) of SPG Solutions.
We have built from scratch a comprehensive and proprietary pay-per-call ad platform and network, a large direct advertiser base, and a substantial multi-media publisher network.
With triple-digit quarterly growth, expected revenue this year of well over 3X that of VoiceStar’s and the turning of a significant profit, our excitement for the PPCall opportunity only continues to grow.