Itsme
03-20-2006, 11:57 AM
Will you tolerate ads for free 411 dialing?
March 20, 2006
BY MARY WISNIEWSKI Business Reporter
Anyone with a radio or television can receive programming for free, in exchange for enduring commercials.
New 411 providers are betting consumers will listen to commercials to avoid charges for directory assistance.
"We thought there's got to be a better way than paying $1 or $2 for a phone call," said Andre Vanier, CEO of 1-800-411-SAVE.
Vanier's California-based company, which started promoting itself in Chicago this month, is one of a handful of national free-411 services that debuted last fall. The others are 1-800-FREE411, operated by Boston-based Jingle Networks Inc., and 1-800-411-METRO, also from California.
"Free is obviously a great price, so if the service is legit and works well, this is certainly something consumers should consider taking advantage of," said David Kolata, executive director of the Citizens Utility Board, a consumer watchdog group.
Directory assistance is big business in the United States, generating $6.5 billion in revenues last year, according to Saroja Girishankar of the Pelorus Group, a market researcher.
While there has been a "dramatic decline" in wire-line callers using directory assistance, there's been an "substantive increase" in wireless 411 calls, Girishankar said.
She said the the "jury's out" on how well the free 411 providers will do because "it's too early in the game." Some users might be put off by having to listen to commercials or remember and dial 10 digits instead of 3, she said.
"It will attract the more deliberate and casual user, who has been hesitant to spend the money," Girishankar said. She said phone companies with pay-411 must provide more value to keep customers by providing directions or business hours of operation. This gradually is starting to happen, Girishankar said.
Phone companies can buy directory assistance services wholesale. The cost varies from 25 cents to 55 cents a call, but phone companies often mark them up. The free services use ad revenues to pay for their costs.
AT&T charges $1.25 for two local listings per call, and $1.99 for national listings or reverse look-up. Rates went up in 2004 from 95 cents and $1.25, according to AT&T's local spokesman, Rick Fox. He noted that AT&T and its proposed merger partner, Bell South, provide yellowpages.com, a free Internet service to look up numbers. "A lot of people go to the Internet rather than go to 411," Fox said.
George Garrick, CEO of 1-800-FREE411, said 411 calls are a "big profit generator for the carriers." He thinks there will be room in the market for both free 411 services and paid 411.
"I think what the phone companies will do is continue to add more and more choices and options and services to directory assistance," Garrick said. "A lot of the growth from free services will be from people using it more frequently -- a couple of times a week rather than a couple of times a month."
The 1-800-411-SAVE service has found sponsors with Bank of America, 1-800-Flowers and Chicago-based Rewards Network. All advertisers must provide special offers, Vanier said -- thus the "SAVE" in the number. "We're not just about saving you the dollar or two on the call, but saving money on everyday purchases," Vanier said.
John Becvar, director of partner development at Rewards Network, said the 411 service provides access to customers who are "hopefully very engaged and interested in saving money."
InFreeDA Inc's 1-800-411-Metro gets about 5,000 calls a day, according to CEO Michael Loftus. The service includes "steal-away" ads -- so if a caller asks for a local pizza joint, he'll get the number but also an ad for Domino's.
Loftus regrets the long holds or other glitches consumers may encounter. He blamed bad spots on the business's "incredible growth."
March 20, 2006
BY MARY WISNIEWSKI Business Reporter
Anyone with a radio or television can receive programming for free, in exchange for enduring commercials.
New 411 providers are betting consumers will listen to commercials to avoid charges for directory assistance.
"We thought there's got to be a better way than paying $1 or $2 for a phone call," said Andre Vanier, CEO of 1-800-411-SAVE.
Vanier's California-based company, which started promoting itself in Chicago this month, is one of a handful of national free-411 services that debuted last fall. The others are 1-800-FREE411, operated by Boston-based Jingle Networks Inc., and 1-800-411-METRO, also from California.
"Free is obviously a great price, so if the service is legit and works well, this is certainly something consumers should consider taking advantage of," said David Kolata, executive director of the Citizens Utility Board, a consumer watchdog group.
Directory assistance is big business in the United States, generating $6.5 billion in revenues last year, according to Saroja Girishankar of the Pelorus Group, a market researcher.
While there has been a "dramatic decline" in wire-line callers using directory assistance, there's been an "substantive increase" in wireless 411 calls, Girishankar said.
She said the the "jury's out" on how well the free 411 providers will do because "it's too early in the game." Some users might be put off by having to listen to commercials or remember and dial 10 digits instead of 3, she said.
"It will attract the more deliberate and casual user, who has been hesitant to spend the money," Girishankar said. She said phone companies with pay-411 must provide more value to keep customers by providing directions or business hours of operation. This gradually is starting to happen, Girishankar said.
Phone companies can buy directory assistance services wholesale. The cost varies from 25 cents to 55 cents a call, but phone companies often mark them up. The free services use ad revenues to pay for their costs.
AT&T charges $1.25 for two local listings per call, and $1.99 for national listings or reverse look-up. Rates went up in 2004 from 95 cents and $1.25, according to AT&T's local spokesman, Rick Fox. He noted that AT&T and its proposed merger partner, Bell South, provide yellowpages.com, a free Internet service to look up numbers. "A lot of people go to the Internet rather than go to 411," Fox said.
George Garrick, CEO of 1-800-FREE411, said 411 calls are a "big profit generator for the carriers." He thinks there will be room in the market for both free 411 services and paid 411.
"I think what the phone companies will do is continue to add more and more choices and options and services to directory assistance," Garrick said. "A lot of the growth from free services will be from people using it more frequently -- a couple of times a week rather than a couple of times a month."
The 1-800-411-SAVE service has found sponsors with Bank of America, 1-800-Flowers and Chicago-based Rewards Network. All advertisers must provide special offers, Vanier said -- thus the "SAVE" in the number. "We're not just about saving you the dollar or two on the call, but saving money on everyday purchases," Vanier said.
John Becvar, director of partner development at Rewards Network, said the 411 service provides access to customers who are "hopefully very engaged and interested in saving money."
InFreeDA Inc's 1-800-411-Metro gets about 5,000 calls a day, according to CEO Michael Loftus. The service includes "steal-away" ads -- so if a caller asks for a local pizza joint, he'll get the number but also an ad for Domino's.
Loftus regrets the long holds or other glitches consumers may encounter. He blamed bad spots on the business's "incredible growth."