Yellow Pages Continue Toward Fossilization



While I was at PubCon last week I had the chance to listen to Justin Sanger the founder of LocalLaunch which was purchased by Yellow Pages giant RH Donnelly in 2006. I say ‘giant’ with great trepidation these days as the entire Yellow Pages franchise continues its free fall. Justin’s presentation was easily the most passionate I saw during the 3 days of speakers at the conference and his dedication to the cause was inspiring. In fact, SMB’s (small and medium businesses), depending on their industry / vertical, really need to consider their local search options. Whether the Yellow Pages in either its offline printed form or its online form (IYP) is the best option is something that needs to be considered heavily by small businesses during these economic times.

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.

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  • http://wyblog.us/ Chris Wysocki

    Our business abandoned the Yellow Pages 2 years ago and never looked back. You’re right, it’s a dinosaur. Their whole classification model is outdated, unless you understand where to look for a business it isn’t found. That model works well for their sales staff, each listing generates more revenue for them. But the reality is people want to find a business but they don’t want to be bothered with trying to figure out which category to look in.

    That in my mind is the biggest drawback to the online yellow pages services. You either get way too many results, or you don’t find what you want because you chose the wrong sub-category. In the too many results realm, the only way to browse the list is alphabetically. Why can’t they do a “distance from point x” listing? The best I’ve seen is by zip code, but they still insert “premium” listings in every zip code and when one zip code encompasses more than one town it’s still not as useful as it could be.

    Chris Wysocki’s last blog post..Barry’s upcoming Crackberry withdrawal problem

  • http://www.ypassociation.org SHobbs

    Or not. With an ROI of over 33 to 1 for national advertisers and 14 to 1 for local, over 3 million SMBs continue to depend on the Yellow Pages for buyers. Last year there were over 17.4 billion references to the print and online products, and the graphic from the WSJ shows the growth in unique site visitors for the online Yellow Pages. For the past year, the constant reports of our death have ignored the transformation taking place in our industry and it’s usually the newspapers who want advertisers to believe their doom and gloom perspective. We’re still out there connecting buyers with sellers, not browsers. Full disclosure, I work for the Yellow Pages Association.

    SHobbs’s last blog post..Americans Bulk Up on Recycling Information

  • Frank Reed

    SHobbs,

    As with anything it’s the conversion that matters. How are the Yellow Pages measuring conversions from those visitors? Number of visitors is a misnomer in the online marketing industry because you can drive a lot of traffic to anywhere but if it doesn’t convert and it can’t be measured to conversion as it is defined by the business owner themselves then it’s just traffic.

  • http://www.allsomewebsolutions.com Tim

    [comment removed at commenter's request]

  • http://www.futuregringo.com james

    Many local community bloggers like myself despise the YP companies and their marketing tactics.

    They have no incentive to curtail delivery and adhere to opt-out lists, and their numbers are based on ad rates. There are multiple companies – which means I get deliveries 4-5 times a year.

    Young people and consumers do not want these. The internet DOES work fine for local searches, and has the added value of user consumer reviews of a business. (you won’t find that in the YP)

    this is my list of documentations, discussions and gripes: – from Denver:

    http://www.futuregringo.com/index.php/2008/11/08/the-life-of-a-phone-book/

    james’s last blog post..Gray Line to Serve Copper Mountain

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  • http://www.overalia.com Oscar Del Santo

    Their ‘hard sell’ tactics are also despised in Europe, believe me. We are witnessing the same process across the Atlantic. I concur that their management are being myopic about what’s going on and that their bullishness does them a great disservice.

  • http://www.LinkMoney.org Rich Hill

    Man I don’t know how I missed Marketing Pilgrim but found you through the “Web Top 100 Internet Marketing Blog List,” and so glad I did. This post hit me quite strong because just yesterday I wrote a blog post about “How To Make Money In Your Shorts Using The Yellow Pages,” on LinkMoney dot org.
    I hope your readers enjoy it.

    Rich Hill’s last blog post..Make Money In Your Shorts Using The Yellow Pages

  • http://www.amiohayon.com Ami Ohayon

    Haven’t used a Yellow Pages in years.

    If I know the name of a business I look it up online; if I’m looking for a service I get recommendations from friends or local web sites. Other than propping up a broken shelf I have no use for a Yellow Pages at all.

  • http://www.paystolivegreen.com Patrick

    Yellow Pages are definitely ancient and they only way they could possibly survive is to revamp their online site. I doubt that will happen and yellow pages probably won’t be around too much longer.

    Patrick’s last blog post..Nanotechnology Dangerous for Your Health and The Environment?

  • http://www.internetmarketingaccess.com Internet Marketing Access

    Yellow Page advertising is becoming a thing of the past at a faster rate then they had expected. I have clients who have not seen a good enough return to even cover the cost for the entire year. Full page ads at over $1,000/month that are not producing. I felt bad for them, however they are canceling the ads and moving more towards online advertising. I use one phone book for a door stop, all the rest get tossed in the recycle bin.

    Internet Marketing Access’s last blog post..How To Create An Ebook And Where To Start

  • http://www.RestaurantMarketingBlog.com joel cohen

    A whopping 60% of restaurants said they have decreased their Yellow Page directory spending over the past two years, downgrading their listing from a display ad to a bold listing, or from a bold listing to free listing.

    This was one of the many facts that surfaced in RestaurantMarketing.com’s “Restaurant Yellow Page Usage Report” – a survey of 214 different restaurants across the USA in various food and concept categories, from casual, to pizza to fine dining, taken in September 2008. You can read more at http://www.RestaurantMarketingBlog.com.

  • http://blogs.dirxion.com Mark T

    We work with many yellow page publishers and while the downward trend is certainly there, many publishers are coming to realize the importance of becoming advertising consultants rather than simply a print sales company. If a rep can effectively review an advertisers options with respect to a balanced approach to advertising, they are likely to keep a full revenue stream from that customer. A balanced advertising campaign includes, online SEO/SEM, video and audio production, and targeted print advertising. Yellow pages can still prove their model via call tracking, but an educated rep will be able to defend the overall revenue from a SMB if they know what to sell.

    Mark T’s last blog post..Four Ways to Distribute Your Digital Publication

  • Tim

    Yes yellow pages is part of a well balanced marketing plan, but for most advertisers their marketing dollars are spent more wisely somewhere else. Full page ads for $1000 a month, maybe in a small market, in large books that price can be over $5000-$10000 a month. The flaw in the yellow page model is the cost, these books don’t cost that much to print or distribute, you are paying for the sales force commission rate. Yellow pages will always be around, but the cost of advertising has to be re adjusted big time. As of now, if you want to generate the lead pay per click is one of the cheapest, or if you are like me, you have been working on organic search engine placements for years now, which generate lots of leads and no cost. For lawyers, one of the most competitive yellow page headings your cost per lead can be above $35. And, the yellow page companies don’t really offer a competive value when it comes to online advertising. Why should you pay them a management fee when you can simply manage an online program your self via Adwords? I’ve shifted my company away from yellow pages, based on tracking results for online programs versus our yellow page ads. We generate more sales and leads for less money with online advertising, which is keeping us afloat in this economy.

  • JC23

    The Yellow Pages are alive and kicking folks. Just like our economy…the News media is creating a recession in as many industries as it possibly can…just for the sake of their own advertising dollars. For small to medium sized customers addicted to internet advertising…look out. In my opinion, the internet is all glitz and glammer. Kind of like dating a girl that don’t put out…In my opinion, the average business that spends $280 a month VS a $280 a month on a SEM plan will tear up the SEM customer in regards to chance of long term survival, especially in a metro market with a company publishing major telco books. Yellow Pages is about return on investment not glitz or glammer and it is the foundation of a successful local advertising program in my opinion. You will go broke if you open up a business and think glitz and glammer can be deposited in your new business checking account. I have never…not once..had a customer tell me that their internet product has completely changed their life. I have however had about 20 customers call me and thank me for focusing most of their budget on Print Yellow Pages. My experience on thousands of calls has been that the Yellow Pages truly has the power to change a persons life for the better. The Yellow Pages are the King of all forms of advertising and have been for sometime. Give respect where respect is due…certainly I have a lot of respect for internet advertising….its still a young prince in regards to how it effects middle class american business owners. I have many customers who spend thousands of dollars a month on print advertising…a few even hundreds of thousands of dollars a month….not one single customer in this small to middle sized range spends more then 3k a month on IYP or SEM advertising combined (because the ROI for Print and call volume is so much stronger) and I have over 300 of these type customers in a major metro area and have never had less then a 80% renewal on a print program. So be careful piling up on what makes middle class america businesses thrive. The average first time advertiser spends about $280 a month as a first time customer. Trust me…not to many of them will strike it rich with a $280 a month SEM product and my company has over 500,000 print yellow page customers.

  • http://www.LinkMoney.org Rich Hill

    @JC23
    Ha ha ha ha ha… LOL, OMG!
    You haven’t got a clue!
    Print is dead. I use yellow pages for fire starters in my wood stove.
    There is absolutely NOTHING that I can’t find online, INSTANTLY, without a magnifying glass.

    Sorry pal, the jig is up, the handwriting is on the wall, you’re going down with the ship.
    Google: Gary Vaynerchuk and Jason Calacanis.

    Rich Hill’s last blog post..What Is Your DNfame? Increase Your Ranking

  • JC23

    Ya Right…Wine-Retail doesn’t even really hit the Yellow Page Radar in regards to usage…something called an obscure heading. Local brands from a customer that spends 4k a year on advertising aren’t going to knock their competition around by asking some skateborder named Gary. The chance of a guy wearing a green wrist band while cussing front of a audiance impressing me will never occur. I am a professional salesmen and the Yellowpages are the front soldiers of local search. Even if the internet moves past it in terms of local search in regards to direct purchases (which it hasn’t)…we will still be the soldiers because we have the long term personal relationships. And these relationships won’t go down with the ship…we will just be employees of a local sales organization just like we are now. Also…you hit it on the nail..Yellow Pages is about buyers looking for sellers….not sellers looking for looky lou’s…like your typical online searcher…joe blow window washer makes his return with the purest lead. Having some guy like you who ain’t ever gonna spend any money click on him but not call is useless in regards to revenue generating activity. I had a customer get 353 clicks to his profile online but only 1 call. That was a good $250 a month investment. Get more info and learn your info on the street not on YouTube.

  • http://www.futuregringo.com james

    JC23 – your references to the internet as being for “skateboarders” and a “pretty young thing” show how little you know about the internet and Web 2.0

    Take Tripadvisor for example. Its revolutionized how people find hotels/motels and independent lodging. It forces business owners address complaints and become involved with customers – thereby keeping them honest.

    That’s just one of many examples. You don’t find that interactivity in the Yellow Pages – where “looky loos” (as you label them instead of potential clients) can read reviews and rapidly updated posts about a business, whether in your neighborhood or worldwide…

    Also your last sentence disses YouTube. Meanwhile many many corporations and businesses HAVE an official YouTube presence. United Airlines released their latest commercials and marketing campaign ON YouTube (So did our new President last week.)

    Your two posts make you sound like a curmudgeon hasn’t used the internet since 1994

    james http://www.futuregringo.com

    james’s last blog post..The New LAX

  • Tim

    I’ve tested both media, yellow pages versus pay per click. Our return on pay per click destroys yellow pages. $280 a month in pay per click or organic search engine listings will buy you a lot more then a $280 advertisement in the yellow pages. I sold yellow pages in small markets, and we were the telco book, even their you couldn’t get a decent ad for $280 dollars a month. Whereas if I bid .05 on pay perclick, including placements on other websites, I can generate a lot more sales for my clients then a $280 print spend that doesn’t provide me with any guaranteed leads. My favorite feature about the yellow pages is how you can click on someones ad and get connected instantly to their business…oh wait that’s what the phone, black berry, and all the new 3 g phones do. Once everyone has a phone with connectivity to the internet, what purpose does the yellow pages have if you can do search on your phone? Yellow pages isn’t dead yet, but as a long term investment, it’s over for this type of advertising media, and the people at these companies are so stuck in backward thinking, that they don’t see the writing on the wall. Yeah the skateboarders comment is ridiculous, another example of lack of understanding of how people are using the internet. I never assume anything until I’ve tested for myself and compared. People searching on the internet are better customers (savyness, education, and income all beat the average yeller page user)

  • Beleagured RHD Employee

    I work at RH Donnelly’s Colorado office, on their soon-to-be-launched new Dex 2.0 on line business directory and am certain that it will prove to be a huge flop. I have stared at the site 8 hours a day, for weeks on end and even I cant figure out why anyone will ever go through the trouble of using it. The search functions poorly, information is clumsily laid out and I anyone who would find it more useful then a simple google search is crazy. The business owner who puts even a dime out to purchase a listing is wasting money and needs to invest ten bucks in web marketing for dummies.

    Bye Bye yellow pages. The irony is that, of all industries, none were better positioned to capitalize on the Internet. Too bad they didn’t figure that out 12 years ago.

  • SEM certified industry vet

    Never trust a beleagured employee…they lack objectivity. It’s easy to bash a product and a company that has let you go! Wait and see the new product for yourself and see if you find any intrinsic value…you may just be surprised. To Beleagured in Colorado: maybe you should go to work for Yellow Book! You are their prime candidate…jaded and out of touch!

  • ozi

    I just cancelled my Yellow Pages advert and let me tell you my experience with them were never pretty. They always have these “Akmal Saleh” types of phone consultants who seem more like jokers to me. They are very unprofessional and when I wanted to cancel my account they ask me “Is your business shutting down?” and other rude comments like “So its something you dont care about” And quiete honestly it sounded really sarcastic. I had this lady from Yellow Pages once before again who was offering me an extended service and I said “no, thanks” and she said “Oh so do you don’t care about your business, how are you going to get customers?” Obviously very very rude and offensive and agressive. I “paid for them” to talk to me this way. And what Frank Reed has said that their online user stastics are inaccurate, that was on the ball. I am going to continue to blog about Yellow Pages and how these phone people were rude and I am also going to tell everyone in person. And by the way their complaints department “The Shif Manager” was another ‘Akmal Saleh’ – so it was pretty much a whole bunch of gang working their. (Nothing against Akmal Saleh by the way)

  • http://www.hsbc.co.uk/1/2/personal/current-accounts Monica – current accounts

    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 , Well,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 knock out blow

  • http://www.osyme.net OSYM

    Their ‘hard sell’ tactics are also despised in Europe, believe me. We are witnessing the same process across the Atlantic. I concur that their management are being myopic about what’s going on and that their bullishness does them a great disservice.

    OSYM’s last blog post..Aralıktaki Sınav için Son Gün

  • http://www.bizsearchlocal.com Biz Search Local

    The phone book is dead there is no fixing that, but companies like superpages will still be around because of their IYP’s (internet yellow pages) and its high usage. I think they are also starting SEM campaigns too.

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