Although calls have been around since 1876, it wasn’t until 2015 that Google allowed call-only ads. Before that, advertisers were forced to use call extensions within their ads to generate inbound leads.

Google quickly recognized the changing business environment and the increased demand for inbound calls. Consumers are relying more and more on their mobile devices, and critical decisions are made on the go.

Today, more than 70% of all Google searches result in a phone call to a business. However, pay-per-call marketing becomes more beneficial than pay-per-click for many businesses such as auto insurance, legal practice, and medical services where consumers cannot complete the sale online.

Unfortunately, some businesses have yet to embrace pay-per-call marketing since they believe it is more expensive than pay-per-click.

But is that the case or is it a mere misconception? This article assesses pay-per-call vs. pay-per-click costs and conversation rates to determine which model is cheaper. Read on to learn more.

Understanding Pay-Per-Call Marketing

Pay-per-call marketing is a relatively simple model for generating high-quality leads that reach out to advertisers through phone calls.

For instance, if you provide a particular product or service and the consumer needs it, you will receive a call from that person if you are running pay-per-call campaigns. The consumer doesn’t have to fill lead capture forms or send you an email that you may read after days.

In other words, pay-per-call marketing is a smart way of advertising your business to your target audience while providing them with a chance to connect with you instantly through a phone call.

One of the most significant advantages of the pay-per-call advertising model is that you only pay for results. Unlike the pay-per-click model, where you pay blindly for all clicks to your site/landing page, pay-per-call ensures you only pay for qualified calls sent to your business.

Pay-Per-Call Marketing vs. Pay-Per-Click Marketing: How Do They Compare?

Typically, the pay-per-click advertising model pushes your target audience to an external link from the ad placement platform. In most cases, this will be a link to your business website or landing page.

The primary goal is to get the user to your site or landing page and hope they fill the lead capture form. Under the pay-per-click model, you can push out ads for particular keywords, and the ad will be visible to everyone who searches for your target keyword.

You pay for the number of clicks made by users to your site or landing page. Unfortunately, many of these users are only out there to seek information. Therefore, most of the clicks don’t turn into sales.

Unlike pay-per-click, the pay-per-call marketing model is specifically designed to encourage your target audience to contact your business via a phone call for a particular product or service.

With the pay-per-call model, you only pay publishers for the number of qualified inbound calls you receive from prospective customers.

It is obvious that inbound calls are only made by individuals who are genuinely interested in your product or service. Just from this comparison, it is evident that the pay-per-call marketing model is much more profitable than pay-per-click.

Pay-per-call is a highly targeted advertising system under which advertisers only target a specific audience through their ad campaigns. They will typically strive to generate calls in your preferred geographic location.

The publisher generates a comprehensive report showing the number of calls your business has received, the call duration, the timings, and then charges you based on qualified calls only.

Pay-Per-Call vs. Pay-Per-Click Conversion Rates and Cost

The notion that pay-per-call marketing is more expensive than pay-per-click is not true at all. While calls may be more costly than clicks per unit, phone calls tend to have much higher conversion rates.

Sometimes, the conversion rate of phone calls can be as high as 50%, while the average conversion rate from clicks averages about 2.5%.

This means that you ultimately pay way less per conversation with a call than you do with a click. Think of it this way; if you spend just $1 per click (2.5% conversion rate) and $10 per qualified call (50% conversion rate) and you get 200 clicks and 200 phone calls, you will convert approximately five people from the clicks and about 100 people from the phone calls.

Technically, it means that you are paying about $40 per conversion with pay-per-click and about $20 per conversion with pay-per-call marketing. This makes sense because many people browse the intention to buy, but not all of them end up buying.

But if someone picks up their mobile phone and dials your business phone number, they are more than ready to talk business.

Is Pay-Per-Call Profitable?

While pay-per-call ads are not necessarily cheap, the relatively higher success rate offered by these campaigns can offset the higher cost of running ads. There may be no setup fees in most cases, but you need a relatively higher account balance to work with companies that offer toll-free numbers.

Furthermore, the average keyword bids range from $2 to $20, with a cost as high as $50 for the #1 spot in Google. While that could add up pretty quickly and drive your advertising cost up, the relatively higher profit margin offered by pay-per-call advertising will more likely make up for the higher costs.

This advertising model is excellent for small and medium-sized businesses because they are more likely to benefit from personal interaction with their prospective clients.

In fact, some marketing experts suggest that small and medium-size companies would rather have a single pay-per-call sale than several click-throughs because they get a chance to learn about the customer one-on-one.

Final Thought

Now that you have a better understanding of both pay-per-click and pay-per-call marketing models and the potential each one carries, you can decide whether you want to implement pay-per-call into your marketing strategy or not.

If you decide to make pay-per-call part of your overall marketing strategy, PALO is here to help you grow and realize your full potential. We have been generating highly qualified inbound calls for businesses in different industries for over ten years.

We have built a strong team of highly experienced pay-per-call marketers ready to help you grow your brand and beat your competitors. Contact us today to find out if we are a good match.