Forrester TEI Webinar: Driving 53% ROI with Marchex Solutions

Tuesday, August 25, 2015 1:00EST (10:00PT)

Speakers:John Busby, SVP Marketing & Consumer Insights, Marchex

Jennifer Wise, Senior Analyst, ForresterSarah Musto, TEI Consultant, Forrester

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John Busby, SVP Marketing & Consumer Insights, Marchex

Today’s Presenters

Jennifer Wise, Senior Analyst, Forrester

Sarah Musto, TEI Consultant, Forrester

Forrester TEI Webinar: Driving 53% ROI with Marchex Solutions

@marchex

In today’s always-connected world, why are we talking about phone calls???

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What may surprise you:The most common response to a location-based mobile search is a phone call.

The role of click to call in the path to purchase, Google 2013

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What may surprise you:Consumers will place 162 billion phone calls from all mobile channels.

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What may surprise you:These calls convert into sales, appointments or reservations: Click-to-call commerce”

Marchex, 2015

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What may surprise you:The average order size is very high for products purchased by phone.

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What may surprise you:Click-to-Call commerce will reach $1 trillion in 2015 and double by 2019!

Marchex, 2015

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Unfortunately for marketers, click-to-call remains a major blind spot…

Keyword:Hotel Suite

Keyword:Hotel Suite

DesktopAd

LandingPage

Thank YouWebsiteWebsiteWebsite

Keyword Attribution:Conversion

MobileAd

Keyword Attribution:Conversion

Marchex: Connecting online behavior to real-world, offline actions.

The Total Economic Impact™ of Marchex Call Marketplace And

Call Analytics – Forrester

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Table of contents

@marchex

• Introduction, market overview• What is TEI?• Executive summary• Analysis• Financial summary• Question and answer

© 2015 Forrester Research, Inc. Reproduction Prohibited 15

IntroductionMarket overview

Mobile.

Image source: Gizmag (www.gizmag.com)

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2billion

Sources: Forrester Research Mobile And Smartphone Forecast, 2014 To 2019 (US)

Image source: Gizmag (www.gizmag.com)

© 2015 Forrester Research, Inc. Reproduction Prohibited 18Sources: Forrester's US Consumer Technographics Behavioral Study, Q1 2015

53 hours

Image source: Gizmag (www.gizmag.com)

© 2015 Forrester Research, Inc. Reproduction Prohibited 19

Welcome to the Mobile Mind Shift

The expectation that I can get what I want

in my immediate context

and moments of need.

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Source: Forrester's Q2 2014 Global Mobile Executive Online Survey; Forrester's US Consumer Technographics Behavioral Study, July 2014 To September 2014; Forrester's North American Consumer Technographics Online Benchmark Survey (Part 1), 2014.

Mobile usage is growing› Three out of four US mobile subscribers, or 66% of the population, have

a smartphone› The average smartphone owner spends 1 hour and 53 minutes

interacting with their phone each day.› Most marketing leaders in our recent US survey reported that between

25% and 50% of their site traffic comes from mobile› One-third of US online smartphone users research purchases on their

devices at least once a week.

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And search is a key mobile behavior

Source: North American Consumer Technographics Online Benchmark Survey (Part 1), 2015

Several times a day26%

At least daily21%At least weekly

22%

At least monthly10%

Less than monthly8%

Never13%

“How often do you do the following activities on a mobile phone?”Use search engines

Base: Online adults (online weekly or more) who use a smartphone

Marketer spend in mobile search is increasing

Image source: Z. Eren Kocyigit (http://erenkocyigit.com)

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And they must prove the impact

Source: 2014 ANA/Forrester: Media Buying’s Evolution Challenges Marketers Survey

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But, marketers still can’t connect-the-dots

Source: Forrester's Q2 2014 Global Mobile Executive Online Survey

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What is TEI?Background and methodology

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“Next level” business case justifications are increasingly vital for critical investments

Somewhat important

33%

Somewhat unimportant

4%Not at all important

3%

Very impor-

tant60%

TCO ROI TEI

IT ImpactIT costs

IT cost savings

Business ImpactUser efficiency

Business effectiveness

Risk/ uncertainty Risk mitigation

Risk versus reward

Strategic Impact Scalability

Flexibility Base: 825 IT decision-makers at North American enterprises

Do I need a business case? What is an effective business case?• Over 90% of IT decision-makers find

value in a business case• TEI adjusts for risks and factors the flexibility of a

product into the case study

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The TEI approach and framework

Benefits

Costs

Flexibility

Total Economic ImpactTM

(TEI)

Risk

The TEI Framework

TEI Approach and MethodologyPerform due

diligenceConduct customer

interviewConstruct

financial modelWrite case

studyWebinar

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DisclosuresThe audience should be aware of the following:

› This document is an abridged webinar version of a full case study (Forrester Total Economic Impact of Marchex Call Marketplace And Call Analytics, May 2015).

› The study is commissioned by Marchex and delivered by the Forrester Consulting group.› Forrester makes no assumptions as to the potential return on investment that other organizations will receive.

Forrester strongly advises that readers should use their own estimates within the framework provided in the report to determine the appropriateness of an investment in Marchex.

› Marchex reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

› The customer names for the interviews were provided by Marchex.› Forrester does not endorse Marchex.

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Executive summaryHigh level findings

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Marchex delivers new customer calls that generate incremental revenue

Products: Call Marketplace And Call Analytics

Customer:Customer calls and the growth of mobile are key components to customer acquisition strategy

Benefits:• Incremental revenue• Time savings on mobile

advertising• Time savings - reporting

Based on an analysis of current Marchex customer feedback and quantified benefits, costs, risks, and flexibility, Forrester has determined Call Marketplace And Call Analytics has the

following three-year risk-adjusted financial impact:

Return on Investment:

53%

Net Present Value: $16.5 million

Payback Period: <1

month

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AnalysisInterview highlights and model

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Forrester interviewed one organization using Call Marketplace And Call Analytics

Demographics:• US-based provider of security

solutions for small businesses and residential properties

• Recent fiscal year revenue of over $3 billion

• Over 6 million customers

Challenges:• Due to complexity of

products/services, customers like to purchase via call center

• Limited mobile advertising strategy prior to Marchex

Objectives:• Sought mobile solution to drive

inbound calls, increase conversions

• Sought call tracking platform to understand and use data to optimize strategy

Results:• Chose Marchex for full-service• Call Marketplace drives calls,

improves conversion, uses budget efficiently

• Call Analytics provides optimization of spend

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The interviewed organization noted several key results from its investment

“We use Call Analytics reporting to provide data to our dealers and our call centers to track various programs. Visibility is crucial to us to manage the cause and effect of our digital programs.”

- Program manager

“Marchex Call Marketplace enables our organization to participate and bid on targeted media placements unavailable to traditional agencies.”

- Douglas Cohen, manager, digital marketing

“Marchex Call Marketplace produces leads 20% more efficiently than other paid media channels purchased on a performance model.”

- Douglas Cohen, manager, digital marketing

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The interviewed organization quantified key benefits resulting from its investment in

Marchex Call Marketplace And Call Analytics

INCREMENTAL REVENUE

From increased calls and conversion

TIME SAVINGSOn mobile

advertising and reporting activities

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Three-year risk-adjusted benefit: $57.8m

Metric Annually (not PV)

Incremental call volume 56,000-141,000

Average lead-to-sale conversion rate 15-30%

Average contract value $1,044

Risk adjustment 10%

Incremental revenue (risk-adjusted) $11.6m - $30.5m

Call Marketplace delivers incremental call volume and has doubled the average conversion rate

Marchex is designing and placing mobile display, paid search, voice search, directory listings, and mobile app integration advertisements. Insights from call data are applied back into campaign planning and execution on a weekly basis.

Propensity for customers to engage via phone will affect budget support for mobile advertising and performance

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Marchex staff conduct most day-to-day operations, freeing up internal resource time

The organization saw time savings from its use of Call Marketplace in three areas: reporting, mobile strategy, and designing creatives.

• The organization began using Call Marketplace early in its use of mobile advertising. Organizations that adopt Call Marketplace further along in the adoption curve could see additional time savings

• What can you do with additional time?

Three-year risk-adjusted benefit: $34,920

Metric Annually (not PV)

Time saved – data/strategy analysis (hours) 156

Time saved – creatives (hours) 52

Average fully loaded compensation $120,000

Risk adjustment 3%

Time savings (risk-adjusted) $11,640

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The organization can generate reports more quickly and gains visibility to help power strategy

Before using Call Analytics, there was no solution to oversee metrics across different campaigns, locations, sales centers, and dealers. With these reports, the organization can use that data to try to optimize the customer call experience and media spend to try to increase conversion rates.

• What can you do with Analytics?• What can you do with additional time?

Three-year risk-adjusted benefit: $10,913Metric Annually (not PV)

Time savings for report generation (hours) 195

Average fully loaded compensation $120,000

Risk adjustment 3%

Time savings(risk-adjusted) $10,913

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In order to achieve these benefits, the organization incurred costs in three categories

• For Call Marketplace, the organization pays for qualified calls delivered to its call center. The specific thresholds for a quality call, including call duration parameters, were set by the organization at the beginning of the campaign. Average cost-per-call is based on the media mix chosen.

• Call Analytics is also priced on a per-call basis. The organization set a call duration minimum of 2 minutes and pays a flat fee for each call analyzed.

• A majority of the upfront setup and ongoing management of the Call Marketplace campaign is run by Marchex.

• Training for both Call Marketplace and Call Analytics was minimal due to automated reporting built into each product as well as the support provided by the Marchex team.

Metric Risk Initial Year 1 Year 2 Year 3

Call Marketplace and Call Analytics spend 5% $0 $9,298,800 $19,394,550 $8,664,579

Resource time for planning/implementation and ongoing management

5% $606 $30,470 $30,470 $32,893

Training costs 3% $357 $357 $0 $475

Costs (risk-adjusted) $962 $9,329,627 $19,425,020 $8,697,948

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In addition to benefits and costs, TEI includes potential risks and future “flexibility” options

Flexibility, as defined by TEI, represents the opportunity to make an investment in additional capacity or capability that could be turned into future business benefit:› Much of the benefit derived from analytics solutions is in how the data is used

within the organization to promote efficiencies and new business.› Freeing up time for internal resources can yield valuable future results.

Implementation risk› Media mix and the size of the

monthly call budget affect cost› Resource costs and training costs

will vary

There are two types of Risk that TEI considers:Impact risk› Internal/external factors that can

affect realization of revenue› Time savings benefits depend on

many factors

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Financial summaryResults

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The three-year risk-adjusted cash flow shows a 53% ROI, a NPV of over $16.5m, and a payback period of <1 month

Initial Year 1 Year 2 Year 3 Total Present Value

Costs ($962) ($9,329,627) ($19,425,020) ($8,697,948) ($37,453,557) ($31,071,074)

Benefits $0 $11,568,720 $30,482,868 $15,807,833 $57,859,421 $47,586,130

Net benefits ($962) $2,239,093 $11,057,848 $7,109,885 $20,405,864 $16,515,056

ROI 53%

Payback period           <1 month

($30,000,000)

($20,000,000)

($10,000,000)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

Initial Year 1 Year 2 Year 3

Cas

h flo

ws

Financial Analysis (risk-adjusted)

Total costs Total benefits Cumulative total

Marchex Call AnalyticsThe analytics platform that measures sales, audiences and

consumer intent from click-to-call.

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Marchex Call Analytics provides full transparency to marketers for advertising campaigns that result in phone calls.

Which ad generated the phone call?

What was the outcome of the

phone call?

How do I optimize my media to get

better ROI?

Mobile App Call Center Reporting Dashboard

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Marchex Call Analytics delivers a 360-degree view of marketing effectiveness.

How should I allocate my 2016

budget?

Could operational changes improve

sales?

How do acquire more leads for less money on

Google?

Call Center

Head of Search

CMO

Head of Display

Do branding campaigns lead to

offline sales?

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Which ad generated the phone call?Our dynamic tracking attributes 100% of calls to keywords, tactics or impressions.

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What was the outcome of the call?Call DNA visually maps, scores and classifies every phone call, automatically.

Demographics35-45, $80K, Children

LocationSeattle, WA 98122

ProfileProfessional,

Business Travel

Caller HistoryPreviously called,didn’t purchase

“Wireless Camera” “Streaming Video”

PII automatically removed from recorded call.

Consumer Selects “1” In IVRHold time

“Confirmation Number”

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How do I optimize my ad spend?Access our data & insights everywhere you make buying decisions.

call.searchDescriptionSearch all calls logged for an account. Use a struct to refine the search using the options defined below. While the key-value pairs are optional, a struct is required even if it is empty.Parametersaccid, struct →  assto, call_boundary, callerid, cmpid, dispo, end, grpid, keyword, start, status, subacctResultarray → struct → acct, answer_offset, assigned_to, call_end, call_id, call_start, call_status, caller_name, caller_number, cmpid, disposition, forwardno, grpid, inbound_ext, inboundno, keyword, rating, recorded, revenue, ring_duration

ad.configureDescriptionCreate a new campaign with several settings configured or update an existing campaign by specifying a campaign id. During creation, any values not explicitly set are assigned defaults consistent with new campaign creation.Parametersaccount_id, struct → ask_extn, call_postback, campaign_id, campaign_name, enable_early_audio, forw_timeout, group_id, group_name, inboundno, precall_postback, record_calls, timezone, use_vmail, business_hrs → array → (day_start, day_end, override), forwards → array → (hrsmode, matchrule, number, step_order, weight), playfiles → (afterhourfile, aftrhr_exten_file, busnhr_exten_file, errorfile, playfile, rejectfile, vmailfile, whisperfile)Resultcampaign_id

User Interface API Integrations

Marchex Call MarketplaceThe mobile ad network that drives new customer phone calls

while lowering customer acquisition costs.

49Proprietary and Confidential

Marchex Call Marketplace delivers high-quality phone leads directly from mobile Web and in-app ads across hundreds of top publishers and apps.

Marchex Call Marketplace is single point of contact to access

200+ publishers

Marchex ad server reachesconsumers ready to call

You only pay forquality phone calls

50Proprietary and Confidential

“MCM” is an analytics-enabled network, meaning that advertisers only pay for phone calls qualified by the Marchex Call Analytics platform.

Meets minimum call duration

No repeat callers within 72 hour window

IVR qualifies consumer intent

Spam blockingtechnology

51Proprietary and Confidential

Marchex Call Marketplace helped this Fortune 500 marketer generate $93 million in new revenue.

“Our reliance on your call volume has really

increased …Thanks to Marchex’s help…we

have completely re-imagined our optimization

strategy…to directly weight calls against

online quotes.

We are changing from campaigns optimized

to a single conversion metric to a single

campaign strategy that weights and prioritizes

the best outcomes whether they are online or

offline.” 

Fortune 500 Financial Services CompanyHead of Digital Marketing

134,360Quality Calls

46,316New Customers

$92,632,000Revenue

www.marchex.com

Questions & Answers