|
|
|
|
||
|
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. Related Story • Discovering
oneself, and patience, in 411 services test 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."
|
||
Navigating Change.... 
