Monday, May 5, 2008

Why Won't the Yellow Pages Wakeup?

We recently got back from a Yellow Page Association Conference, and as much I'm pulling for the industry - they are still far behind in terms of innovation and ability to move quickly. With the stock price of industry heavyweights such as Yell, Idearc, and R.H. Donnelley dropping by as much as 80% from their 52 week highs, you would figure there would be a complete strategy overhaul. Or maybe even a bigger portion of revenues going towards research and developments for new products. As it is, the Yellow Page industry is still firmly planted in a 'print' world; when everyone else is moving online and complimenting those efforts, the Yellow Page industry refuses to believe print will ever be out-placed by the internet .

Neg Norton, President of the Yellow Pages Association, used a large portion of his speech to tout the virtues of Yellow Pages and how 'healthy' the industry is, amidst a sea of criticism and doubt. A defense-laden speech is never one to remember. A keynote should offer innovation, optimism and direction. Undoubtedly, print Yellow Pages still have a wealth of value and many people still use them - but if anyone believes they will stand the test of time - they are kidding themselves.

Here's a portion of Norton's speech:

Print usage is stable, not declining, both here in the U.S. and in
Canada. Domestically there were 13.4 billion print references in 2007, the same
as in 2006. That's roughly 60 times per adult, per year. In Canada, usage of
print Yellow Pages also remains stable. Seven out of ten Canadians have used a
print directory over the past month and two-thirds of business searches still
come from print. These are significant numbers in an environment where many have
decided that "no one uses the Yellow Pages anymore.

Norton goes on to list stats and figures, even using two examples of merchants finding value advertising in the Yellow Pages, as if he had to sell people in his own industry. Out of his entire speech, maybe 1/20 of it was dedicated to any mention of internet and its implications.

Let me ask you: Do you think there is one college kid who's graduated in the last 10 years that didn't have to use the internet in college? Do you think any of those same graduates, who grew up on the internet, and cell phone searches, are ever going to go to the Yellow Pages you and I grew up on?

Out of all the 'old media' industries that have been affected by the internet - music, television, newspaper disrupted by the likes of Napster, iTunes, YouTube, craigslist - Yellow Pages has responded by changing the least. While YP is still largely profitable, the inclination and pressure to change is not as immediate. As publicly traded companies, it may be hard to balance quarterly revenue goals with long-term thinking. On the other hand, one of the most innovative 'old media' companies, Viacom, has rebuilt its brand by focusing on building out almost 300 hundred DIFFERENT sites around its brands!

Norton in his speech also says:

The tone and tenor of the entire advertising industry is anxious--- in fact
just one week ago, TNS Media Intelligence reported that U.S. ad spending was
flat in '07 vs '06 and that the 4th quarter '07 ad spend was slightly negative.
Yellow Pages, as a member of that industry, are fighting similar headwinds as
well as misperceptions because we are among the least understood of all

If in fact the Yellow Page industry is the 'least understood,' much of it would have to do with everyone looking in from the outside and seeing so many missed opportunities from a media juggernaut. For now their Yellow Page Conference, titled New Tools New World, presented almost no new tools for an industry that has a vantage point that could easily transition them to industry leaders in another space: Local Internet.

Community Relations


  1. The YP industry is definitely at an inflection point. Public companies, like RHD and Idearc, will have a doubly hard time of emerging victorious because of the market's unwillingness to allow for investment. Companies like Local Insite Media may have an edge as a result. The key will be in making products simple enough for the channels to sell.

  2. And yet many in small business know nothing about the internet and don't use it as those of us who live on the internet do.

    Yellow Pages has made money for years and years selling product that the buyers very often fail to measure a ROI on. Why would you assume they would suddenly stop when it is still working?

  3. Sorry about hte Typos in the last post...didn't run it thru spell check.

  4. Very true! Idearc is doing some good things, and does have a more impressive multi-pronged approach. I also liked Donnelly's purchase of (maybe not the price they bought it for, which is currently higher than their Market Cap), but they had and have a huge opportunity - if only they could figure out what they're doing with it. Does anyone know what their strategy with the entity is today?

    I'm just saying there are many opportunities to be had - especially with an industry that already has its foot in the door with local business owners.

    With an estimated 14 to 15 million business listings on the web, 450,000 have claimed their MerchantCircle listing - and that's without a sales force. Of those who have claimed, more than 2/3 use us as their main web presence and more than 70% have never advertised on the web before. I think that's evidence enough that local business owners are more than ready to make their own efforts at attracting new customers.

  5. We were just talking about this in my office last week. Now this is not very scientific but for what its worth: Only 10% still use the yellow pages to look up a phone number.

  6. I can do that too... I was talking to my employees this morning, and we determined that about 85% of our PAYING customers use the print yellow pages at least once a month to look for local business's.

  7. Oh, one more thing merchant circle staff. You said 450,000 out of 15 million is proof enough for you that small business's are embracing the internet. That is 3% of the total according to your numbers, if that is what embracing the internet means, then I guess you're correct.

  8. As a small business owner of a massage company, I do a good amount of internet advertising. I tried the Yellow Pages for one year and all I received were 50 calls for men wanting sexual favors. I used to teach business to massage therapists and in our industry, Yellow page ads are no no. Why? Because they have traditionally been used for mainly sex for hire massage "parlors". So men looking for sex go to the YP. YP sales reps, who are extremely pushy I agree, had the great idea of telling me I simply needed to pay MORE for advertising in YP to get better results. I was already paying $1200 a year to get harassed. No thanks.

    We get great leads from the internet. Every industry is different. And I know Yellow Pages did not set out to make their massage listings a haven for illegal massage parlors and sex for hire listings. But that is what they are . They tried splitting the listings up to further offer legitmacy for legit therapists. But then the prostitutes jumped to those listings as well.

    Local newspapers require massage advertisers to provide proof of their massage business licenses and this cuts down on abuse. However, why waste time with expensive, noneffective print ads in YP when the MAJORITY of our clients go to the web. And the web is more cost effective for us.

    Personally, I do ALL my business searches for carpenters or whoever on the web. Why? Because if a company is not savvy enough to know how to put up (Or hire someone to put up) even a low cost 1 page website, they likely won't be that good in business in other ways. IMHO.

    The web is where it's at. I tell my clients to use YP books as footrests or for calf raises when working out at home. For that Yellow Page books are fantastic!

  9. Wow, great reading the above. This post may be a few days old, but just though I would contribute my stats as a small business owner (no employees, just two principals) I am in a town of 40,000 outside of a major metro area. I am paying $650 a month for my first year of "the book" In June my contract will be up and I could not be happier. I have received a whopping total of 6 qualified leads over the 11.5 months resulting in not one sale. I get about 6 leads a day from the internet, from places like MC and have an average of 3.4 sales a week. In my opinion "the book" is the absolute biggest marketing mistake a small business could make in my area. I network with a lot of SB owners and cant find one with opposing views on this. That being said, there is NO (under $10K/month) medium that can even come close to returning the same as a free web listing on sites such as MC. I have spent over $25K this year trying different things (radio, TV, print)

  10. All I can say is, MerchantCircle has been a wonderful thing for my business! I teach music lessons privately from my home. I have more calls a day from internet searches than I do from word of mouth or print sources! I have refocused all of my financial resources to the web for advertising and it is paying off! In a down economy here in MI, I have a studio that couldn't be more full. If someone can look for a piano teacher in Waterford, MI and find me, then MerchantCircle is doing something right! Thank you, MerchantCircle!

  11. I'm a small business owner and I use both the web and the Yellow Book for advertising. However, I've found that the printed ads are a lot more costly than internet ads. I created my own website after reading some "how to" books at the library and it is not difficult nor was it expensive to find a host for my website. Merchant Circle helps me to come up on page one of an internet search as do several other free sites. You just have to be creative and persistent with advertising. Oh and when I search the internet I never go past page one of search results. Who has time? That is my only gripe about the internet and I don't care how high speed it is it can be very time consuming.

  12. Here in Orlando area I have a 1 man Plumbing Company. A plumbing company needs to be in the YP to get any residential calls for emergency drain cleaning and plumbing work. However the Orlando area YP add prices are ridiculous.
    2 books for Orlando/Central Florida and 1 for Lake county cost me over $2000.00 a month. 3 columm half page color/Orlando and Dollar bill size color/Lake Co. Embarq- $1100.00+ a month. and 1/4 page B/W & Orlando Internet. AT&T- $1000.00 a month. Then the over zealous ad. rep. at AT&T talked me into a full page 1 color ad for $3000.00 a month. Thats $4000.00
    + a month between the 3 books and sales have not improved and I can't pay the bills. I have kept track of each paying call to see how they got my number. I get about $1000.00 from my $3000.00 AT&T ad. $1000.00 from the 2 ads. from my $1100.00 Embarq bill. $1300 from Online sources and $4500.00 from repeat customers.
    I can't see the YP being able to keep its customers (ad buyers)unless they change the way they bill ther customers. I would be OK with paying a percentage of sales but I can't and won't pay more for the ad than the ad brings in in sales. I will have to file bankrupcy to get out from under the growing debt the YP is putting my company into and the YP will not give an inch with the bill. they say I signed a contract. Well as far as I concerned, My contract with them was "They make my phone ring with paying customers and I pay them".
    I can not get in the YP next year unless I pay off this years bill, which I can't do with out the calls coming in. So I will go under next year all because a over zealous ad rep. at AT&T YP wanted to make a big commision and the unwillingness of the YP companies to take what they deserve (% of sales) and demand what they talk you in to.
    I think all the YP ad. buyer in the same boat I'm in (and I know ther are a lot of you) should band together and bring a Class Action law suit for non-performence of whatever and bring down the YP indsutry and make them fix the way they charge ther customers and stop putting small business out of business.

  13. You can blame the ad rep all you want for your foolish decision to spend $4000 a month on YP advertising, but if you look in the mirror you will see who is really responsible for your troubles. You can't blame the rep for doing his job. My rep is constantly trying to get me to spend more, but all I have to do is say no, and he moves on. I am in 5 YP books and spend around $225 a month. MC is a nice service and everything, but it doesn't even come close to giving me the sales my YP ad does. As a matter of fact I haven't had one customer mention MC. The hit counter continues to go up, but where are the customers? If I quit YP advertising in favor of the internet, my business would fail to grow. In my opinion you need to have top of mind awareness to be effective with your advertising. And that means Cable, YP, and internet. Using just the internet is a recipe for failure.

  14. There was a class action law suit brought against the yellow pages. Check online and you will probably see if there are anymore out there. Good luck.

  15. Just because you can get people to see your ad doesn't mean they are going to do anything with it. I'm only interested in the .0000001% of the 650,000,000 people your talking about. The rest of them do no good to me. Of course your business is getting people to believe that what you can do for them on the internet is the be all and end all. I don't work for any ad companies, I am a customer of theirs. Internet advertising has its place, I use it also, but it shouldn't be the only focus in a marketing budget. And probably for most business's it shouldn't even be the main focus. It is what it is, a method of getting your business's name in front of people, so that next time they need a product or service they think of you. As far as the $225 ads for YP, the main problem with most people is they want the biggest ad on the page. That's just not needed to be effective. Even a text only ad is better than none, and will generate enough business to pay for itself over the course of a year. It's very difficult to determine what marketing efforts work and what don't. That's why you need a well thought out plan that includes most, if not all mediums. Just to get one thing straight here. I hate spending money on marketing, including YP, but if I don't do it the next ad I run will be a business for sale.

  16. Yellow pages ads put me out of business. I belived what they told me and it went the wrong direction. I placed ads in six market areas with double page, full and half page ads and fell flat on my face. The ads cost more money than the business that came in. Once some time passed they came after me with law suits and crushed me in the most heartless way you can imagine. The worst of it is they will never see a dime because the bank and everyone else is in front of them. Once the debit got a certian age they sell it, cheep! My advise is be very careful advertize small in the pages unless you have exsperiance first hand do not belive the sales reps. Also the YP internet site are not effective, same scam same pitch differn't place. Baby steps and verify sucessful sales though these YP medias. I have learned the hard way thirty years of building a business and lost because I fell into the bigger is better trap.

  17. Wow-this is interesting. My business is in a mid size city in NC. I've advertised in YP for four years. I'm in YP's in the surrounding three major cities and I pay $200 a month. YP ads doubled my business immediately!! In fact, the first order I received as a result of the ad, paid for the ad! My rep, was very helpful and did not (and has not since) bully me into a decision.

    The reality of the YP is that its effectiveness depends on the type of business that you have.

    I also have a website, of course advertise on MC, and other free sites. To date, the majority of my business comes from the Internet, then YP, and then word of mouth.

    Like any marketing tool you have to determine if the YP is going to benefit you. I've been in business for over 10 years. The YP gave me exposure in my local area that I could afford. Now that I'm established (visually) I reduced the size of my ad this year so that I could afford to advertise in another major city's YP listing.

    And let's not forget the baby boomers...most are still going straight to YP every time!!

  18. Meeting with YP salesperson tomorrow and they won't like what I have to do.
    I keep track of where our sales come from also and the internet far exceeds YP even though I spend several thousand a year for nice colored ads.
    Home Depot has opted to use only a bold listing in Metro Atlanta. Think they know something? I do and will follow suit.