ChaCha Growing, Now It Needs More Advertisers

ChaCha is coming back from a difficult period -- 2009 was tough for everyone -- but founder/CEO Scott Jones says the company is now profitable on a per query basis and heading toward overall profitability hopefully later this year or early next. The company has a massive audience of teens and young adults but has struggled a bit in getting its message through to advertisers.

Here are some slides from the presentation Jones shared with me this afternoon:

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Response rates have been very high for the campaigns run on ChaCha. Jones told me, for example, that when the company runs polls or asks open-ended questions of users it sees response rates of 80% in some instances. Most campaigns are not at that level, but significantly higher than comparable online advertising response.

Distracted by apps and smartphones, the thing that many advertisers still fail to understand is that SMS offers the greatest mobile reach in the market. Smartphones are 15% to 17% of US handsets (though growing), and they text as well. Today in the US alone there are roughly 4 billion SMS sent daily. This is not the same thing as search query volume but it shows you the scale were talking about.

ChaCha has refined the way it uses human guides, it's original differentiator, so that queries are about 90% automated today. Jones also said that questions/answers on are showing up in Google search results and that's driving considerable traffic to the dot-com site (where it can be monetized).

I asked about how coupons were doing. Jones said that the program remains restricted to one market but that it's doing fairly well. The company offers online coupons, which can be sent to mobile, but not mobile coupons per se. He said that some merchants are entirely comfortable with mobile redemption and many still are not.

Ultimately ChaCha offers a pure national or national-local advertising play rather than one for SMBs, given how hard they are to corral.