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Vertical businesses that have relied on Yellow Pages and newspapers and other classified channels aren’t always seeing the same performance-based results that they might expect in the Google age. But many of them also aren’t likely to become keyword experts, or spend a lot of time managing their accounts. That’s always the SMB dilemma, right?

That’s what is focused on. The two-year-old, 125-person company, backed by $17 million of venture capital, provides vertical advertisers with “enhanced click” packages and validated leads, complete with leads scoring. In addition, advertisers using’s auction-based system can filter locations, and put caps on spending and cost-per-click rates.

Vertical segments targeted by include key leads categories, including home insurance, health insurance, life insurance, education, auto finance, mortgage, used cars and auto insurance. Auto and real estate segments make up the biggest segments, with 60 percent to 70 percent of Reply’s customer base. Under Reply’s system, each category is customized for the particular aspects of a vertical.

One key differentiator is that the targeted categories are typically not “inventory based.” They may be new cars, rather than used cars; mortgage, or pure relocation leads, rather than search-based rentals leads.

Reply CEO Payem Zamani suggests that Reply’s clicks and lead offers are more efficiently processed than typical ad exchanges, in part due to narrowing the market base with geotargeting and a system for discerning consumer intent. The company is processing 9 million clicks per month, and 1.58 million leads, with customers for its auctions including auto manufacturers, major media companies such as Hearst Newspapers, and vertical sites such as and Autobytel. The company also works with several of the search engines, SEO sites and e-mail providers.

The basic idea is to create a “Google-like” platform for acquiring traffic, says Zamani. Reply’s knowledge of user intent and location — driven in part by the installation of a pixel to track users — really streamlines the process and drives higher conversion rates, he says. Conversion success depends on how deep the advertiser wants to go. Information that goes all the way through to consumer credit cards for purchase will be a small fraction (maybe 0.1 percent) of more general conversions (30 percent to 40 percent) that provide additional information. COO Sean Fox is a featured speaker at Marketplaces 2010, March 22-24 in San Diego.

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