Yellow Pages Had a Worse Than Average Week
As if there weren’t tough enough for yellow pages companies trying to compete in the 21st century. This past week provided a few more cuts.
First, the business-friendly Wall Street Journal (via @dbrauer) took a look at the YP industry in an article titled Extinction Threatens Yellow-Pages Publishers:
In recent years, as its customers migrated to the Web — flocking to sites like Google — the telephone-directory business followed, hoping the Internet would be its salvation.
But that strategy hasn’t panned out. Now, the economic downturn is sending the already ailing business into a tailspin.
You can find a lively discussion of that article at this WSJ blog post.
The article included some numbers from media research and consulting firm, Borrell Associates, who projects:
Within the next four years, ad spending will fall 39% in print directories alone — the steepest projected decline across all local-media categories.
That makes me wonder how low spending has to drop before it’s no longer possible to print and distribute yellow pages. And how does the drop in spending effect the quality of the directories that are delivered? Do we reach a death-spiral moment?
Tracy Coenen weighed in on the WSJ article at the WalletPop Blog:
The fact remains that there is much more to be found about businesses on the Internet than a print or online phone directory can provide. I’d much rather use Google to find a business, knowing that I’m likely to find more than just the phone number and address. I’ll probably get a map to the business, a link to its site so I can find out more before calling, maybe some reviews of the company, and other bits of information on the company. Why would I ever go back to the yellow pages, either in hard copy or online?
And Carlo Longino riffs on the marginal online efforts to date from yellow pages companies over at TechDirt:
But their web sites have generally been miserable, especially when compared to the business directories created by internet companies. While some of the publishers are trying to beef up their online efforts, it’s unlikely they’ll be able to make up for their shriveling print revenues, meaning the Yellow Pages will soon be little more than memory.
Making matters worse, Law.com weighed in with some discouraging stats regarding one of the yellow page’s biggest advertising industries:
The Internet has eclipsed the Yellow Pages as the primary source consumers turn to when searching for an attorney. A 2007 survey by consumer research firm Ipsos, revealed that only 25 percent of consumers turn to the Yellow Pages when looking for an attorney, while 33 percent utilize the Internet.
Union Issues
The Communications Workers of America has launched a website where you can “Learn About Idearc Media’s Failed Leadership“:
As both workers and investors, we fear for our company.
While Idearc constantly touts the importance of its sales force – serving as the interface between the company and its 850,000 advertisers nation-wide – its actions contradict the fine words. About 700 CWA and International Brotherhood of Electrical Workers (IBEW) members in New England and upstate New York have been working without a contract since June 2007. The company declared “impasse” in November and has imposed steep severe take-aways in all benefit programs – for instance, freezing our pension and restricting retiree health care – as well as job security and sales commission plans. This is no way to treat employees who are critical to the company’s future!
NYSE Delisting
And just when you thought things couldn’t get any worse, Idearc Media was delisted from the New York Stock Exchange. The Dallas Morning News offers the following explanation for Idearc Media’s downfall (but no mention of people returning unwanted phone books to their offices):
The company, which was spun off from Verizon Communications in late 2006, has struggled to make the transition from print to Web. Although Idearc remains profitable, its sales have steadily fallen in recent quarters.
The Response
Of course, the yellow pages industry didn’t respond by saying, “yep, that’s where we are today, but we’re working hard to evolve ourselves back to relevancy.” Instead, the head of the Yellow Pages Association, Neg Norton, responded with a superlative-laden letter to the editor that illustrates how
The Yellow Pages industry has succeeded in migrating to multiplatform product offerings faster and more effectively than other market players. For the record, we didn’t follow anyone into the online world; Yellow Pages were online long before any search engine and now feed local engines a large bulk of the search data they provide to consumers.
YP industry consultant Ken Clark huffed and puffed about the WSJ article at his Yellow Pages Environmental Forum blog. I’m not sure how this particular article was relevant to that particular site. Perhaps Ken’s judgment was skewed by his anger about non-rosy reporting by the WSJ? Here’s one particularly interesting stat Mr. Clark trumpeted:
Both reporter and analyst ignore the research which shows that Yellow Pages offer an average sales ROI of 33:1 for national advertisers, and nearly 14:1 for local advertisers
Ken, my guess is that reporters and analysts ignore figures like that because they’re simply not believable.
November 23rd, 2008 at 1:08 pm
The Yellow Pages were online before search engines? What utter bull!
I was a heavy YP advertiser back in the ’90s and DEX’s move online was halting, slower than molasses, and utterly irrelevant to online users.
In the ’80s I used to sell YP advertising for Hanson Directories in Iowa. They understood consumer needs well enough to have stolen most of the YP business for rural Iowa. The “official” YP folks insisted that each tiny town have it’s own book so if you wanted a phone number you needed to have books from every town in Iowa. That collection (which every statewide political campaign had to have) was enormous, and took up more space than two sets of encyclopedias.
All Hanson Directories had to do was to issue countywide books that combined all the little towns into a single easily used directory. The phone company eventually responded with redesigned books, but only after they’d lost most of their rural business.
The YP folk are as clueless now as they were then. Try using DEX to find a Thai restaurant in Minneapolis (live next to St Paul — good luck you’ll have to search twice, once for each city). According to DEX there are only 4 Thai restaurants in Mpls. In fact, there are over 60 Thai restaurants in the metro area but only those who pay for online listings get mentioned.
Worse, they tried to survey me but the online survey crashed the webpage when it went to load.
Losers, losers, losers.
November 23rd, 2008 at 3:22 pm
Ed, you are doing YEOMAN’S DUTY putting this information together and making it available on the internet to keep feeding the trend against unwanted phone book dumping. (Phone book delivery spam, to use YOUR preferred term)
I say drive the Yellow Pages extinct. We can always get some DNA from an old phone book in an ancient landfill and bring these dinosaurs back Jurassic Park style, if it ever becomes necessary.
Fight on, termite army.
November 24th, 2008 at 9:38 am
[...] Yellower and pagier than ever, and about as useful as tits on a boar. [...]
November 24th, 2008 at 5:23 pm
Ed:
For the record I wasn’t even out of breath when I completed that post despite the “huffing and puffing”.
You can, and will choose to ignore whatever stats you are presented with but those ROI numbers come from research conducted with real advertisers by reputable third part research firms. Perhaps you weren’t one of those contacted.
My objection to the reporters story was that while she presented comments from analysts (those same folks who have so skillfully helped our 401K’s become 201k’s) but didn’t cover any of the items that she obtained in her other interviews. It was sadly more of what we see in the newspaper world — a reported under deadline who has to just slam some text down and move on to the next story. Hence, their industries bottom line results are even worse than Yellow Pages.
And thanks for the mention as you continue to drive plenty of usage to the blog. You have a wonderful Thanksgiving.
November 24th, 2008 at 7:52 pm
Ken, you don’t have to convince me that the Yellow Pages are a good investment. The problem appears to be the failure to convince former advertisers who are redirecting their ad dollars.
I can understand your frustration with the WSJ story. It’s possible that there was a deadline issue that prevented her from telling the story of the print Yellow Pages’ decline from every angle. However, with limited amount of real estate and no ability to link, she was also limited by column inches. In some ways, it’s similar to the problems faced by phone book advertising. (It was cool to see the WSJ create a blog post to accompany the article for further discussion and links.)
While there are quite a few useless analysts, it seems like the evolution of advertising has had more to do with the decline of YP stocks than the “skillful” help of outside forces. The interactive divisions do seem to be doing some valuable work (I had a chance to meet with a company this past week that works in this field), but they don’t seem to be covering the losses in print at this point.
Enjoy your T-day.
December 2nd, 2008 at 2:29 pm
I’ve worked at GTE-Verizon-idearc-Superpages for over 15 years, and now looking for work when I thought I’d be getting ready to enjoy my retirement. Industry wide, revenues and margins have been so high in the past, the current management can’t see the future…The King Has No Clothes. Idearc is selling off property, booking mid to late 2009 advertising to beef up the p&l, (can we spell Enron?) and firing everyone possible with a large base – i.e., the oldtimers. I realize some will look at this and say it’s all a gripe, and they’d be right. IT”S A GRIPE THAT IDEARC MANAGEMENT DOESN’T KNOW WHAT’S GOING ON IN THE STREET and keeps touting the value and strength of yellow pages. Call Counts? One in 10 sales and marketing uses, due to the overwhelming poor call counts. Take a ride with a rep someday and experience the local business owner moving money from print to Google. Although the IYP is a strong growth internet industry, it’s a million dollar industry, and not a billion dollar industry. So, I’m looking for a new ‘career’ since the golden years are indeed over. Inside the halls we all know The Emperior Has No Clothes.
December 3rd, 2008 at 9:40 am
It’s disturbing to see these numbers and even more disturbing to know that there are talented people still trying to get the last dollars out of this dying medium.
I’d welcome working with current and former Yellow Pages sales people–they understand local search and the importance of proper ad text and placement.
Clients are asking for strategies and support for new media initiatives and there are not enough of us out their providing this for them. I’d think the Yellow Pages folks would be a natural fit in a new media agency such as mine.
March 10th, 2009 at 7:30 am
[...] Yellow Pages Had a Worse Than Average Week [...]
July 6th, 2010 at 10:47 am
This is one of the worst things I have ever read. After spending twenty years in the yellow pages industry, as a sales representative, I can assure you that business owners are indeed still advertising in the phone directories. Just try being a small fish in the internet pond. As a small business owner, how would you even begin to think of competing with the larger fish on a global scale? And how would you fund it? They can’t. But on a local, city, county, state level, yellow pages advertising still has a good ROI. And people still reach for that book. Gee. It just doesn’t ever crash! It’s always there, even during an electrical storm.
For the past twenty years people have been telling me that the yellow pages is dead. That everyone is looking things up online. Balony! It’s simply not true. People will always want to feel and touch a tangible phone book. You can’t get that online.
July 6th, 2010 at 11:34 am
@Erika, I don’t believe I suggested anywhere that local businesses should rely solely on the web for advertising. If that’s what you read in my post, I can see why you’d be upset.
As I re-read it (It’s from 2008, so it’s been a while), I see that there was a prediction that print directory advertising would drop 39% over 4 years. This can be tracked in the financial reports of YP companies. For example, SuperMedia (formerly Idearc Media) had the following Net Advertising Sales. Keep in mind that the numbers below aren’t even pulling out print. This gives SuperMedia the benefit of including non-print revenues:
Q1 2008: $744m
Q1 2009: $626m
Q1 2010: $497m
So this particularly company has dropped 33% of Borrell’s 39% prediction in the first two of four years.
I hope you really don’t have to rely upon electrical storms to justify your product. Personally, I live in a home that occasionally loses power, but it hasn’t justified bringing any of the phone books spammed on my door into my home.
The tangible angle is also interesting. As long as there is a justifiable business model, there will be print phone books. Just like with newspapers. Have you been following what’s been happening in that industry?