If you pay attention to the Wall Street Journal’s take on things then today’s headline is not real promising for the Yellow Pages industry regardless of its form. Imagine you wake up as the leadership team of RH Donnelly or Idearc or any other provider of these directories and the lead headline the Media and Advertising section for the online Journal blares “Extinction Threatens Yellow-Pages Publishers”. Ouch.
Can’t say I disagree though. Many have considered this option but now with the economy taking a dump and small businesses cutting back in every way the Yellow Pages are primed to take what could be a knockout blow. Already reeling (RH Donnelly and Idearc’s stock has plummeted 99% in the past year – that’s right ……. 99%) from the perfect storm of concern about relevance in the past years and economic forces that are out of their control, you may be hearing the death knell for this industry. Despite impassioned pleas from the industry it’s hard to disagree with the sentiment.
Honestly, when do you use the yellow pages in either format? Unless you don’t have an internet connection or access to one (which automatically makes a person a less desirable consumer target) there is little room in today’s clutter for a mere list of service providers based on industry classification alone. Many local search options are rushing in to fill the void with reviews etc but it appears that the search engine giants, Google and, to a lesser degree Yahoo!, stand to come out as the victors here. Since they don’t rely solely on this type of information they can provide the smaller business a truly good opportunity to at least get the word out in some fashion.
Here’s the biggest trouble with the whole Yellow Page model and this is a major issue I see everywhere these days: their sales force and sales strategy are leading them right over the cliff. These hard closing (read: antiquated) sales approaches coupled with the packaging of a dead product (offline Yellow Page listings) and a faltering online product (number of clicks per month based offerings which are often not even tracked properly) often result in a continued recipe for disaster. Because the Yellow Page providers are so heavily reliant on their print versions their salespeople are incentivized to sell that dinosaur in conjunction with their online offering which is limited as well. No one wins in this scenario.
This is a classic case of “It IS broke, so you must fix it”. Can these companies ride this thing out? Read on then you decide.
“The main pure-play companies do not have capital structures that would enable them to endure perpetual high-single-digit or double-digit declines in cash flow and remain viable entities or solvent entities over time,” says Mike Simonton, an analyst with Fitch Ratings.
All you SMB’s get ready for the sales pitch of a lifetime as the YP’s try to make you spend with them one more year. When your friendly neighborhood Yellow Pages sales team comes knocking you may want to have your “Be Back in an Hour” sign on the door.