Yext – Are Half Your Phone Leads Junk?

UPDATE 11.25.12:

Since I wrote this two years ago, a lot has changed.  Yext has pivoted its business away from pay-per-call to business listings management to help you manage your yellow pages listings from a single dashboard.  The service is called Yext PowerListings.

Yext Powerlistings can automatically update your business’ information across 50+ of the top local search sites out there including Yelp, Yahoo Local, SuperPages and more.  They also now do review monitoring. It’s not free, but the amount of time it can save you is huge.  Check it out here.

Here’s their fancy graphic showing where they send their data:

Full Disclosure: I get paid every time someone buys a Powerlisting via the above link. It’s not much, but it helps keep the lights on at the blog – and I do think it’s a great service. Ok, end of shill…

Yext.com, has been bugging gently encouraging me to post something about the company and since they just convinced some smart people to give them $25MM I thought it was high time to pontificate on where Yext fits in my unified theory of the local search universe.

So the interesting thing about Yext is that they are selling “Pay Per Action” calls.  What this means is that they generate phone leads to advertisers via trackable phone numbers, but instead of charging the advertiser on a per call basis, which is how Ingenio started, they only charge them when they deem the call to be a qualified lead.  Yext is currently focused on Yext Chiropractic, Yext Auto Repair and other professional services.

I worked on a pretty big pay per call program at InsiderPages and I can tell you the amount of garbage calls we got through these numbers was painful, both for us and the client.  A number of services have taken different approaches to solving these problems, but Yext has focused on an approach that seems pretty novel.  They transcribe the audio of the calls into text and analyze the text for keywords.  Only when the call contains “qualifying” keywords they charge the client.

Here’s a sample transcribed call:

According to Ross, Yext scrubs out 44% of all calls that come through their system.  So Yext believes that almost half the calls that they provision are junk.  Yext gets most of its call volume from search engine advertising and distribution via local search directories, which is not too different than how other agencies that sell calls operate.  So if Yext’s algorithms are accurate then that means 44% of pay per call leads are junk.  Attention pay per call advertisers – you may want to renegotiate your rates.

Of course the price that an advertiser would be willing to pay for a call in theory should be based on the conversion rate of those calls so the junk calls should be built into the price.  Of course that probably doesn’t account for the time the advertiser spends answering the phone.

When you talk to local salespeople all they ever say is that advertisers really just want to pay when the phone rings.  Yext thinks that they really just want to pay when the phone rings and it’s not a robocall from a carpet cleaner or misdialed porn line.

If that is the case, Yext seems like it could be the Yext big thing (sorry had to work that in somewhere).