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Marchex Becomes “A Pure-Play Mobile Advertising Company”
Today during its Q3 earnings call earlier today Marchex announced that it would be separating its calls and its domains business into two publicly traded companies:
Marchex announced earlier today that its board of directors has authorized management to pursue the separation of its business into two distinct, publicly traded entities. Upon closing of the proposed tax-free spin-off transaction, Marchex’s existing shareholders would hold interests in: Marchex, a pure-play mobile advertising company focused on calls; and Archeo, Inc. (“Archeo”), a premium domain and advertising marketplace.
This represents the final step in Marchex’s evolution from a search arbitrage network into a pay-per-call (PPCall) ad network. In parallel the company operates a call analytics business, which also supports the PPCall offering.
Marchex sources calls from multiple channels though roughly two-thirds of its calls come from mobile. Marchex told me that it can take “as many as 250,000” mobile impressions to generate a quality phone call — meaning one that is intended. The company maintains that a huge percentage of calls initiated from mobile display ads are inadvertent (“fat finger problem”).
Marchex uses call analytics to determine which calls are qualified and should be charged to advertisers. Among those that qualify as “good calls,” the company says that it sees “conversion rates north of 25 percent.” That means of the billable calls about one-fourth on average turn into sales.
I asked for some additional examples and the company provided the following vertical conversion data:
- Self-storage — 15 to 20 percent
- Home services — 35 to 40 percent
- Education — 25 to 35 percent
- Insurance — 8 to 15 percent
These are significant numbers and far exceed PC-based display ad performance.