Local advertising is booming – in the U.S., the business is expected to grow from $21.7 billion last year to $42.5 billion by 2015, according to BIA/Kelsey – that’s 14.4% compound annual growth rate (CAGR).

The reasons for the growth are the same in Europe: new technologies enable new types of services, which then allow consumers to find, call and visit local merchants easier and faster, compare prices and buy offline services online (i.e. the “daily deals” business). More and more companies are adopting performance based pricing, which lowers the bar for merchants to spend more on advertising, as they can easily control the spending to sustain a positive ROI.

Many people within the industry are asking, what is Google doing about this?

The answer is that they are doing a lot. But what we are interested in is the phone call traffic – as local advertising is all about offline leads and transactions.

Google speaks about two offerings – in addition to Google Voice – which are available only in the U.S. market.

1. Mobile Click-To-Call (CTC)

Mobile Click-To-Call – as opposed to Online CTC (rather, “Call Back”) – is an intuitive and natural way of connecting directly with merchants and stores. The end user simple clicks a link/button and makes a call. From the merchants’ point of view this is great, as they don’t need to have mobile landing pages – Mobile CTC works directly from an ad.

How to measure the amount of call traffic then? While it is possible to register and report the number of clicks, without call tracking you can’t tell how many calls were connected. When you are paying for the advertising, this can make a huge difference.

Google launched CTC for local advertising in January 2010 and expanded it to national advertisers couple of months later.

And the results? They were simply blown away. Early this year Google announced, that their advertisers receive millions of calls per month and 200% higher CTRs.

2. AdWords Call Metrics

Still the majority of people search for local merchants with their computers online – and of course search advertising is a great way to drive call traffic.

In November 2010 Google finally launched call measurements on AdWords – Call Metrics. While it’s still available only to a limited number of advertisers – and only in the U.S. – it proves that Google wants to be where many of our partners already are today.

What’s in it for me?

Whenever you pick up the phone to call a car dealer, real-estate agent, insurance company or a restaurant, think how great it is to get a human being to serve you and gets things done instantly. Think how valuable your business is to the merchant.

Every time you see a phone number ask yourself, does that advertiser know how many calls they receive through the ad? Is the media publisher or the ad network able to prove the media value,  including phone leads?

How much is your call traffic worth?

The proven business model for directories, or local search as it’s often called in the online world, has for a long time been to list all the applicable businesses for free, and charge for value-added services such as increased visibility. For this, you need loads of people calling every single business owner and convince them to become a paying customer.

Right? Actually, no. What you need is intelligent analysis of your listings and potential customers. Contact only the businesses which already benefit from your traffic – and multiply their success. Web analytics is good for this. But call tracking is much better, as local search is all about the phone calls.

With local search thriving (over 4 million businesses have already confirmed their listing on Google Places), vertical search sites have become very popular, as they have been able to concentrate on a single category – such as restaurants.

Today we are happy to announce partnership with restaurant booking site 5pm.co.uk – and at the same time our first media customer in the United Kingdom. 5pm is a great place to go to, when you want to look for the nearest restaurant, read reviews, find deals and book a table for free.

With Freespee, 5pm.co.uk is able to reach for their most potential customers and help them to fill their restaurants. Simple as that.

You can find more information on our mutual press release.

Why are new marketing tools and techniques spreading like wildfire? Because if they are truly revolutionary, they provide companies a strong competitive edge which anyone simply cannot afford to miss.

Today we are announcing our latest major deal in Sweden – with a Schibsted company Hitta.se, a local search engine or business directory service, if you will. This means, that in addition to Eniro, Lokaldelen and DinDel, also Hitta.se advertisers can benefit from our call tracking solution Freespee Analytics.

For more information, please read our Hitta.se announcement. If you’d like to know how to get started with call tracking, register here and we will get back to you soon!

I am happy to announce that Freespee will bring our next generation Call Analytics solution to European directory publishers at the EADP conference in Palma de Mallorca.

We have successfully expanded our reach in Europe and we are currently working with four of the leading directory groups, in eight!! different countries.

Being at Palma de Mallorca (lovely conditions for Swedes…) enables us to meet with our European customers and introduce our next generation Call Analytics solution. Freespee Analytics 1.5 is the result of our experience in running large scale traffic visualization solutions for some of the biggest directory publishers for two years, with 0 minutes downtime.

We plan to launch in at least two additional European countries over the next two months, offering Call Analytics solutions to directory publishers, B2C classifieds and media agencies that all work with phone savvy business.

After a 3 hours meeting with one of the most successful search engines for real estate in the UK, I realize that UK is the European answer to US in terms of performance based marketing.

The performance based business model is not just a word everyone is talking about, it is also implemented in daily business transactions. In addition, the UK market has already tried advertising setups with no phone numbers, hence 100% focus in driving traffic from the Advert to the advertiser web site or on online form for requesting a proposal. The reason behind this setup has been the inability to trace phone calls.

What happened?

Consumers didn’t appreciate it. Our statistics  show that up to 50% of the visitors of a vertical search engine service wants to contact the advertiser for a voice conversation. All efforts to make this complicated, drives down the value of the service.

Ironically, the average sales conversion rate for an inbound call is 60-70% in most industries. Average sales conversion rate for a click through is 1-2% in most industries. Hence, the value of the call is up to 30 times higher than the value of a click.

In UK, online business has understood this and are now looking for the best tech companies that can help them monetize on generated voice contact leads.

For this reason they contacted Freespee. With traditional display numbers, there is no business case in tracing traffic for an Advert with less than 5-10 calls per month. The Freespee number algorithms enable our customers to trace phone calls for all Adverts, even those with 1 call per year.

We wrote a couple of very large contracts the last 3 weeks. During this time, I had more contact with legal councils than with my family…

Both will use Freespee Apps as well as build their own Freespee API driven Voice App.

Yesterday, a genius in superfast processing large amounts of data joined our tech team. Per-Axel is a rock solid developer, that will help us bring call analytics solutions to a level we didn’t know exist.

I just came home from a great trip to Germany. We met with some really big media groups that like what we do.

These media groups are early adaptors, and Freespee objects, as a Number, a call, call analytics etc will mainly be API driven from external applications.

That’s voice 3.0 and it’s beautiful.

A week ago one of our customers, a nation wide car rental service, were looking at their call stats from their market spending in Yellow pages. They were very satisfied with the volume of received calls, but the number of missed calls was also too high.

We showed them how too drill down into detailed call analytics in Freespee Advertiser. Now they could see a pattern in the missed calls. It was an easy fix by better resource planning and now all calls are answered.

If a typical order is worth 250 EUR, I guess they are satisfied.

Freespee is currently implementing Freespee Numbers to all Local Listing Advertisers in a selected European country. This is done for the largest Local Search engine in the specific country.

And yes, a Freespee Number to every advertiser in the entire directory inventory means n x 100 000 Freespee Numbers. No problem for us.

Who is the client and which is the country? We can’t tell you.  But we are happy to show you how it works.