Bankrate discusses CPC ads (RATE 2Q05 conf call quotes)

Bankrate (ticker: RATE) provides information about interest rates on loans and deposits, often in table fomat. The company announced last quarter that it planned to charge advertisers on a cost-per-click basis rather than a flat monthly fee for a hyperlink. CEO Tom Evans gave more details on the Q2 conference call, including an estimate of the impact on Bankrate's future revenue:

…we currently charge our Hyperlink advertisers a flat fee on a per month, per market basis…  we think there’s some nice up side in going to a cost-per-click pricing model. First, it will make us less dependent on the overall number of lenders on our rate tables. Second, it will reward us for driving more traffic to those rate tables and for generating more clicks… Third, it will allow us to optimize pricing… we are going to establish and set a flat price per click, and lenders will continue to be listed by the rates they offer the consumer.

…since we have all of our rate tables broken out by both product type and by local market, we believe there’s an opportunity to increase the Hyperlink revenue over time by optimizing CPC pricing.

In the second quarter, we’re able to get a preliminary look at the impact of CPC pricing… we think it will mean at least a 20% increase in Hyperlink revenue in the fourth quarter when it’s implemented, and we’ll continue to grow in subsequent quarters as we begin to tweak the pricing by market and by product.

(Quotes are from the CCBN StreetEvents transcript.)

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