Forrester TEI Webinar Driving 48% ROI with the Marchex Platform

Forrester TEI Webinar: Driving 48% ROI with the Marchex Platform

November 10th, 2015

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Today’s Panelists

CRISTINA DIACONUSr. Product Marketing Managercdiaconu@marchex.com

COLLIN COLBURNResearcherccolburn@forrester.com

SARAH MUSTOTotal Economic Impact Consultantsmusto@forrester.com

Agenda

• Intro• Mobile Trends: Shift to Click-to-Call Commerce• Mobile Market Overview• The Total Economic Impact™ of Marchex Platform• More About Marchex

POLL: Have you allocated any budget towards

click-to-call advertising in 2016?YES or NO

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

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 2014

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

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

Marchex, 2015

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

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

Marchex, 2015

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

Keyword:Hotel Suite

DesktopAd

LandingPage

Thank YouWebsiteWebsiteWebsite

Keyword Attribution:Conversion

MobileAd

Keyword Attribution:Conversion

Connect online behavior to offline,real-world actions.

The Total Economic Impact™ of Marchex Call Marketplace And

Call Analytics – Forrester

IntroductionMarket overview

Market overview

› Customers are on the line, so pick up!

› Advertisers are desperate for lift› New ad formats make calling

seamless

Welcome to the Mobile Mind Shift

The expectation that I can get what I want

in my immediate context

and moments of need.

45% search on their mobile device at least daily or several times

30 billion calls in 2013, 73 billion calls

by 2018

Market overview

seamless

Digital spend will top $100 billion by 2019

Search spend will make up about half of the budget

Marketer spend in mobile search is increasing

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

And they must prove the impact

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

Market overview

seamless

Google makes calling easier

Twitter and Facebook are testing too

But, marketers aren’t connecting the dots

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

POLL RESULTS: Have you allocated any budget towards

click-to-call advertising in 2016?YES or NO

What is TEI?Background and methodology

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

Somewhat important

Somewhat unimportant

4%Not at all important

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

The TEI approach and framework

Benefits

Flexibility

Total Economic ImpactTM

The TEI Framework

TEI Approach and MethodologyPerform due

diligenceConduct customer

interviewConstruct

financial modelWrite case

studyWebinar

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, September 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 name for the interview was provided by Marchex.

› Forrester does not endorse Marchex.

Executive summaryHigh level findings

Marchex delivers new call volume, boosting customer acquisition and retention

Products: Call Marketplace And Call Analytics

Client:Client needed a solution to enhance and prove the competitiveness of its pay-per-call program

Benefits:• Revenue• Customer acquisition and

retention• Cost savings

Based on an analysis of current Marchex client 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:

Net Present Value: $3.7 million

Payback Period: <1

AnalysisInterview highlights and model

Forrester interviewed one organization using Call Marketplace And Call Analytics

Demographics:• Global provider of print and

digital advertising services to SMB customers

• 5,000 employees• Using Call Marketplace and Call

Analytics for more than 6 years

Challenges:• Growing competition in the pay-

per-call space• Expensive call tracking numbers

Objectives:• Boost customer acquisition and

retention• Needed cost-effective way to

track effectiveness of its pay-per-call program and prove value to customers

Results:• Call Marketplace reliably delivers

new call volume to customers• Call Analytics provides insight

into pay-per-call program’s success

The interviewed organization noted several key results from its investment

“I don’t think we’d have a pay-per-call product today if we didn’t have the boost in call volume that Marchex provides.”

- Director of Marketing

“Call Analytics data is one of the primary tools that we’re using in conversations with prospective customers.”

“Call Marketplace is able to fill the gap between the call volume we provide and the call volume customers want. Marchex will go out and aggressively get calls for those customers.”

The interviewed organization quantified key benefits resulting from its investment

INCREMENTAL REVENUE

From Marchex call volume

SAVED REVENUE

Viability of pay-per-call program

CUSTOMER RETENTION

Due to Call Analytics data

CUSTOMER ACQUISITION

Due to Call Analytics data

COST SAVINGSFrom consolidating

vendors

Three-year risk-adjusted benefit: $5.1M

Metric Annually (not PV)

Total number of calls delivered in pay-per-call program 270,000

Percent of calls delivered by Marchex 40%

Average revenue per call $20

Risk adjustment 5%

Incremental revenue (risk-adjusted) $2,052,000

Call Marketplace delivers incremental call volume that boosts pay-per-call program revenue

The client uses its internal sources as well as Call Marketplace to deliver as many calls as possible under the billing cap. The client estimates that approximately 40% of the billable calls delivered to customers in the program are from Call Marketplace, and on average the revenue the client receives is $20 per call.

Incremental call volume provided by Marchex is crucial for viability of pay-per-call program

The incremental call volume provided through Marchex increases the value provided to customers, boosting retention, and also keeps the total revenue of the pay-per-call program at a size that ensures internal viability.

• For other organizations, a percentage of a certain program’s success may be attributable to Marchex call volume or call data.

Three-year risk-adjusted benefit: $5.8M

Total calls delivered in pay-per-call program 270,000

Percent of call s at risk without Marchex 60%

Average net revenue per call delivered internally $17

Risk adjustment 15%

Preserved revenue (risk-adjusted) $2,340,900

A 3% increase in the customer retention rate is attributable to the use of call data

The call data provided through the Call Analytics solution is an important tool to help boost customer renewals. The client can use the call data to troubleshoot issues in the program’s effectiveness early, prepare sales staff for renewals conversations, and prove the value of the program to customers

Three-year risk-adjusted benefit: $15,947Metric Annually (not PV)

Total number of customers who use call tracking numbers 225

Average customer spend $2,000

Percent of customers who renew due to call tracking data 3%

Percent of call tracking data attributable to Marchex 50%

Risk adjustment 5%

Incremental customer retention (risk-adjusted) $6,413

The organization uses call data to prove the effectiveness of the program to boost acquisition

The client uses call data from across the pay-per-call program to prove the effectiveness of the program as a whole and the effectiveness of particular forms of media for advertising. The client uses print directories along with other digital advertising methods and Call Marketplace.

Three-year risk-adjusted benefit: $177,188Metric Annually (not PV)

Average number of new customers per year 75

Average customer spend $2,000

Percent attributable to Marchex 50%

Risk adjustment 5%

Incremental customer acquisition (risk-adjusted) $71,250

The organization generates cost savings from consolidating vendors used prior to Marchex

Prior to using the Marchex solutions, the client was using other vendors to provide similar services to its pay-per-call customers. With the Marchex investment, the client is able to reduce or eliminate its use of these vendors.

Three-year risk-adjusted benefit: $354,376

Average cost savings $150,000

Risk adjustment 5%

Cost savings (risk-adjusted) $142,500

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

• For Call Marketplace, the client pays for qualified calls delivered to its customers in the pay-per-call program. The per-call prices charged by Marchex are calculated as a fixed percentage of the billable per-call cost charged to the client’s customers.

• Call Analytics is also priced on a per-call basis. This price includes the call tracking numbers as well as call data for each qualifying call.

• The client has a team of three staff who manage information and processes related to the pay-per-call program.

• The client built an internal site primarily to access call data from its two call analytics vendors. The site can be accessed by both sales staff and customers and is used to view call records and associated data.

Metric Risk Initial Year 1 Year 2 Year 3

Call Marketplace and Call Analytics spend 5% $0 $2,940,000 $2,940,000 $2,940,000

Resource time for ongoing management 5% $0 $157,500 $157,500 $157,500

Costs for data portal 5% $42,000 $524 $524 $524

Costs (risk-adjusted) $42,000 $3,098,024 $3,098,024 $3,098,024

Financial summaryResults

The three-year risk-adjusted cash flow shows a 48% ROI, a NPV of over $3.7m, and a payback period of <1 month

Initial Year 1 Year 2 Year 3 Total Present Value

Costs ($42,000) ($3,098,024) ($3,098,024) ($3,098,024) ($9,336,072) ($7,746,328)Benefits $0 $4,613,063 $4,613,063 $4,613,063 $13,839,188 $11,472,004 Net benefits ($42,000) $1,515,038 $1,515,038 $1,515,038 $4,503,115 $3,725,676 ROI 48%Payback period 0.3 months

forrester.com

Thank you

Sarah Mustosmusto@forrester.com

Collin Colburnccolburn@forrester.com

www.marchex.com

CRISTINA DIACONUSr. Product Marketing Managercdiaconu@marchex.com

THANK YOU!

QUESTIONS&

ANSWERS

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