Get the latest news in local search marketing each week.
What Could Save The Yellow Pages? 10 Ideas
It’s something of a “perfect storm” for the embattled yellow pages companies right now. Not only has the usage of print yellow pages books declined in recent years, but they’re also facing heavy competition in the online space from each other in addition to other local business directory providers and the big search engines. With consumers using YP printed books less, they’re now facing irritation from the environmentally-conscious throughout the country where people no longer see a reason for having big, paper-heavy books dropped on their porches. Economic pressures are hitting many businesses, and a lot of them have slashed some advertising spending, adding to revenue pressures at YP companies.
And to add insult to injury, Wall Street has abruptly lost its love for the venerable old companies in the last year, causing their stock prices to fall through the floor — Idearc Media got delisted from the NYSE a few weeks back, and R.H. Donnelley appears to be about to follow them. The car industry can expect major bailout dollars to buoy them through these stormy economic waters, but the venerable old yellow pages cannot.
So, what’s to be done? Is extinction, as described by the Wall Street Journal, a foregone conclusion? Or can something be done to change course? I’m of the opinion that the yellow pages companies can survive and come out well on the other side, and I’ve come up with ten suggestions as to what they need to change to accomplish survival.
Print yellow pages usage is declining
Print usage has indisputably been falling off. This is simply incontrovertible, despite how the industry has strenuously tried to deny it, or deflect attention from it. The YPA’s industry usage statistics studies showed a drop of 7.6 % in usage in 2006, and although their studies claimed to show that no significant drop occurred in 2007, I showed that there’s really good reasons to not believe the drop didn’t continue further in 2007 and into 2008.
In my view, the leadership in some, but not all, of the YP companies has been in a bit of denial about the usage reduction of print YP. It’s hard to imagine that the public might not use an information resource that’s been strong since the late 1800s when it was first introduced — fifteen years ago, no one would’ve ever believed that these hugely profitable companies could ever falter.
However, you can hardly throw a rock these days without hitting someone who’s stopped using the printed yellow pages. If you consider, this is really a substantial demographic, and if the number of internet users continues to grow as it has, this demographic of non-print-users grows, too. So, just the common-sense math dictates that usage of print YP has to drop, even if you go off of unscientific anecdotal evidence.
Is the industry addressing the issue?
Unfortunately, one of the big problems with the industry is a seemingly obstinate refusal to acknowledge the decline, which has led to a a major public relations nightmare. But, if you’re firmly in denial, it’s hard to be effective at addressing a problem. Welcome to the Business 2.0 and Web 2.0 world, folks! In this day and age, the advantage is to be had by taking the upper hand and acknowledging the negative facts head-on. By acknowledging the reduction in consumer usage, people will be more likely to believe you when you tell them about the positive upsides they should also consider about your product. In the Business 1.0 world you might’ve been able to keep “control of the message” more, but those days have really passed.
Many of the bread-and-butter advertiser base of the YP companies are savvy in their own right. They may not have big, expensively coordinated survey studies to back them up, but they have a real gut-sense of how much business they get from each of their promotion activities, and many of them have concluded that they’re not getting as much biz as they used to from the print books.
Despite this apparent loss of ROI, advertising in printed books continues to be expensive! YP companies maximize profits with add-ons, value-ads and product features. Bold this, highlight that, special spot color treatment for this, geographic reach for that, size up to this, add coupons to that, get placement here, add on menus there, put that ad on the spine or back cover, do this, do that….! A fast-talking YP sales rep could mark you up to paying fifteen grand a month within the first five minutes of arriving on your doorstep!
So, many advertisers already felt disgruntled or over-charged for the value they’ve been getting, and it’s very hard to find out just what that value was with many of these ad products. For some businesses, yellow pages advertising was their primary and only instrument for getting business referrals, and they felt like they were somewhat at the mercy of the YP companies. For them, when they started sensing some erosion in referrals, it was very easy for them to start assuming that they didn’t get any value at all from print ads any more.
This isn’t a complete picture, of course. The usage erosion is different in different markets and industries. Just because references to travel companies or restaurants in the books has dropped doesn’t mean that references to electricians and plumbing has. And usage may’ve only dropped off between 6% to 15% in the last two years — that doesn’t mean one should slash all advertising, does it? And, consumers coming through YP advertising convert at a much higher rate — these people are in buying mode, unlike other media.
But at the big yellow pages companies, the advertisers — small, medium and large businesses across the country — have begun re-evalutating their spends. Print revenue has dropped at Idearc, R.H. Donnelley and at AT&T.
Despite the PR and industry spokespersons attempts to get people to listen to their reiterations of the past glories of print YP (one yellow pages advocate called for “fighting fire with fire” in addressing negative PR), advertisers out there are having none of it. The avoidance and refusal to acknowledge the bad news has resulted in distrust from advertisers, so small businesses are skeptical and are not listening to their premise sales reps as easily any more. That previously trusted relationship appears to have become broken.
A number of these companies also have really huge debt loads which no longer appear tenable from the perspective of Wall Street, in the face of declining print revenues. This factor alone has probably had the heaviest impact upon companies’ stock prices.
Even while the legacy print side of the business has been trying to hold on by its fingernails, yellow pages companies were hip and visionary years ago when they saw potential in the internet. Most of these companies founded an internet version of yellow pages well before there was any shakiness in their print business. Even while they’ve faced competition from a myriad of providers online (the barrier to entry in this online business seems to fall lower every year, with it awfully easy to slap a web interface onto a database of businesses), they still continue to gain or hold substantial levels of traffic. These companies easily beat the local newspapers into the online race.
Increasing online competition
Yet, there’s also continuing increases in online competition which are hard to perform against. Google Maps and each of the search engine’s efforts at blended local search results keep biting away bits of YP marketshare, and there’s been no clear direction as to how to effectively dominate in what has now become a search marketing landscape that most of the YP companies simply weren’t prepared to deal with. They’re facing young, savvy companies who have big war-chests and time and space to experiment with new paradigms of connecting consumers with products and businesses.
Even though internet yellow pages companies have been effective at selling ads online, advertisers’ online costs are tempered by the ads’ characteristic of needing to be performance-based to some degree. This along with the fragmented local online space have kept internet yellow pages companies’ revenues considerably lower than the high profit margins they’ve enjoyed on the print side for so long.
So, this all boils down to relatively few problems which can be summed-up. Print YP usage and therefore associated ad revenue, is decreasing. Period. Meanwhile, revenue from online yellow pages has been increasing or holding somewhat steady over the past few years. But, the volume of IYP revenue is still such a small slice of these companies’ pie that the internet income hasn’t grown large enough to make up for how much they’re losing in print revenue.
I think that these yellow pages companies basically need to do these three things in order to survive and be successful:
- Improve on the public relations front
- Try to bolster the print revenue just long enough for the internet revenue to offset it
- Improve competitiveness of new media product offerings and internet yellow pages.
So, here are my ideas for addressing these top issues: 10 ideas to save the yellow pages
- Come up with some way to stop distributing books to people who no longer use them. There’s no way to explain to people why they should be getting these if they don’t use the books, and it irritates the environmentally-conscious even if the books are printed on recycled paper like you’ve been telling everyone.
- Make it clear on your phonebook covers how you’re making up for the environmental impact of the books, if you must continue to blanket-distribute. Explain how to dispose of the books when consumers are through with them, and how you’ll donate certain amounts of dollars to work for the environment and other ways you’ll do environmental penance for plopping the books at their homes. The yellow pages industry has already handled the environmental criticism moderately well, and are already doing somewhat effective PR management of this issue — but, I sense this hasn’t gone away completely. Ideally, you really need to come up with a way to stop dropping these books for people who don’t use them any more — you’re likely going to have to eventually face a higher cost of distribution at some point in the future, so it would be best to be ahead of the curve on this one and do it before some local government makes you. Or else, plan to have weaned yourselves off of needing the print product just before you’re forced to stop blanket distributions.
- Get industry usage statistics to be rock-solid and dependable. Get some more independent usage studies funded, make sure they’re good, representative samples of the general population, and then make all details about the study and findings available. How was surveying conducted? How many were surveyed, and what’s their geographic distribution? Exactly what were the questions asked to those surveyed? And, don’t just tell me how many “references” to printed books there were, but how many times consumers turned to those books to find a new business, rather than just “references” of times when they were looking up the numbers for businesses they already knew of. And, which company’s print yellow pages were referenced in each area? Don’t just smash all the directory usage figures together into a number that doesn’t let people know which company(ies) from whom a business might want to buy advertising.
- Step up your public relations game! Acknowledge that print usage is falling and be open about how much. In fact, just be open in dealing with everyone, period! It’s time to get off the high-horse and stop berating people for calling a spade a spade — don’t lecture people on how wrong they are if they think print usage is declining — it is and it has been doing so for a while!
- Add tracking phone numbers to every single YP ad, and let advertisers see the results. If you’re proud of your product, you need to be completely open with the true value and effectiveness it may or may not contain. Some companies already have this to a degree, but this would also help establish overall usage by directory.
- Drop the cost of print advertising! I know, I know — you’re hurting for cash and any cut is drawing blood at this point. You’ve just had to go through layoffs, so I know you’ve already been drawing blood. But, I think the days of astronomically-priced print ads are likely coming to an end. You’re going to have to drop the costs some in order to align with advertisers’ value perceptions — if usage is dropping, as we already posit as a fact, then the value of advertising with you is dropping as well. Get your ads competitvely priced and drop the costs some. How about this for an idea: Offer businesses that haven’t yet done online ads half off print if they go online on their own to purchase both print and some level of internet ad! Next year you could save money, perhaps, by not having to send a sales rep in person to their office.
- Bundle, bundle, bundle! I know a bunch of you have stopped bundling on the advice of some other industry consultants over time, but I think that was really bad advice. All the credible analysts have observed that small businesses don’t have time for complicated advertising and marketing packages, and they really want easy-to-understand ad solutions along with one-stop shopping. With a great many small businesses still not bothering to do online advertising, bundling print ads with online advertising really shouldn’t have been taken off the table. And, do I need to point out how much sales reps whine about having to learn a bunch of complicated products? Bundling is one of the main things that I see as being able to still help bolster ad revenues on the print side of the business — this could help maintain and enhance print products a while longer until internet revenue is big enough to replace it in your annual reports.
- Time to get internet and mobile savvy! Stop listening to the same old rehashed “innovative” ideas from the people working in your legacy print sides of the business. Using scanned print YP ads on your internet product? Are you kidding me?!? Converting books to PDF?!? This is about like suggesting taking one of the antique printed Sears catalogs and putting it on DVD so people can thumb through it on their flat-screen TVs. Wake up — no one wants to do that! If the content isn’t easily searchable and isn’t interactive, then it doesn’t compete today. Stop trying to retrofit print YP ads into something profitable on the internet — that is so pre-Y2K! Think killer iPhone app, and we might be talking. Google still hasn’t completely vanquished the online directories — there’s still a lot of instances where you can’t find businesses you’re seeking via Google Maps, so there’s still some space left for a company that finally creates the killer apps of local search. And your core “innovative” concept had better not be “ad networks” in this economy — that seems so Web 1.0! The core asset and product of yellow pages is the data, and means to easily access it. As a consumer, I want one-stop shopping for all my local info, and so far Google Maps has done a lot to go that direction, but it still hasn’t become the end-all be-all of Local. If you mean business, you’re going to have to put a bit more capital behind being innovative. Get away from trying to force your nasty, legacy print systems to spit out internet yellow pages — that’s hamstringing you. Offer top dollars to young internet developers so you can compete with startups, Silicon Valley, and Google. And make your company attractive to the people who think creatively — no one likes working at highly bureaucratic places that are full of dehumanizing rules — empower employees to make decisions and move away from the top-down management or you’ll never accomplish innovation that will allow you to stay competitive.
- Fix your damn data! Strong language? Yeah, it is. But as a consumer, I get really pissed off when I call a restaurant and it’s been out of business for three years, or when I drive all the way across town only to show up at a bookstore and find it’s been closed down. Do you know how often I’ve planned a restaurant outing with friends using your data, only to show up to find the place closed? How about the time I created maps for my brother’s wedding rehearsal dinner using your website maps, only to send a bunch of hungry people the wrong direction. How would I know this from your yellow pages if you’re not cleaning up your data? I know this is expensive to manage, but the data reliability is the foundation of your business, and consumers will gravitate to the place where they can trust. I know that InfoUSA used to be the best-in-class for this sort of thing, since they would call and verify every last business at least once a year to make sure they dropped closed businesses from their listings. Maybe the industry should pool resources in order to address this problem if InfoUSA is too expensive or too restrictive, since individually everyone seems to be doing a poor job of it. Do you all want me to do a survey to show just how bad your data is? For that matter, why isn’t all the data broader? Every last business profile should have richer data. I want not only name, address and phone, but also website URL, hours of operation, pricing, reviews, date founded, credit and business ratings, and more. And, why can’t I search only for businesses that do e-commerce yet — why? This should be the first app that IYPs had, but no one seems to have that.
- Merge yourselves. Uhhh… should I really be saying that? Well, I’ve been predicting some collapse of YP industry for some time, and I think this is where the trend is leading — now at an accelerated pace. It’s hard to be just a regional provider online when consumer expectation is for nationwide and worldwide data, but it’s also hard for ten yellow pages companies to compete nationally online. The trend towards a consolidation in this sector has already been shaping up for the past few years. Idearc has closed printing plants and been outsourcing some of that work to R.H. Donnelley or elsewhere. Print usage is declining, and online competition is indicating that there’s just not room for all the big YP players. If the market forces are doing what I’m thinking they are, companies will either need to merge, or else the weaker ones will just die off while the strongest organisms survive. Sure, there’s major expenses with planning a merger and bringing it to fruition, but your alternative might be to die off completely. I think it’s time for a few of you to merge with one another. This might allow you to form a more solid competitive showing against Google and minor players.
One last “Bonus Idea” for print: Issue more specialty directories for large markets: Hispanic YP. Jewish YP. Desi YP. Christian YP. Black-Owned YP. Chinese YP. Russian YP. Vietnamese YP. Green/Environmental YP. Vegetarian YP. Democratic YP. Republican YP. Specialty-audience directories are much smaller in scope, but they have very dedicated demographic groups that are often more accepting of printed books — they like to show their specialized community support through using the businesses in those targeted directories. Niche markets appear to me to be one area where print can be highly successful still.
Do you have any ideas that can bolster the faltering yellow pages companies? If so, mention them in the comments.
Some opinions expressed in this article may be those of a guest author and not necessarily Search Engine Land. Staff authors are listed here.