BT to Pursue Ad-Supported DA Model
According to the Independent newspaper, British Telecom, apparently swayed by the rapid adoption of free directory assistance in the United States, plans to roll out an ad-supported DA service this year.
The decision seems to be driven by a belief that DA products, now supported by call-based revenues, will inevitably move to an ad-supported model.
“Directory assistance is going free. If the timing is right, take-up will be very quick,” said Nigel Stagg, head of BT Enterprises, quoted by the Independent. The newspaper also quoted Stagg that BT must make sure the advertising is not intrusive and is relevant to the consumer. “We can’t make a pig’s ear of it.”
Yell, BT’s main rival in the U.K. directory business, currently offers DA through a blended model (118 24 7), with both call and ad-generated revenues. Yell has not announced any plans to adopt the free DA model that BT will pursue, but if BT has any success, we expect it may lead Yell to consider following suit.
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This is definitely a strong model for 1800Free411 and other similar services in the U.S., but really only when they sell ads against business information. A serious challenge to the model comes when free DA services try to sell residential directory calls to advertisers, since advertisers can’t know who they are reaching and what those residential callers may be interested in buying (versus a request for the nearby pizza place, which would clearly be interesting to a national pizza chain advertiser). Online directory sites such as WhitePages.com (where I work) overcome that challenge by using anonymously tracked recent local business search behavior to target advertisers to residential listing searchers. It would be interesting to see if phone DA services could implement similar behavioral targeting capabilities (or perhaps utilize the phone number to know who the caller is, demographically speaking?) Then ad supported DA services would be even more profitable and sustainable.