Survey: Print YP ‘Most Effective’ for SMBs

AT&T (yellow pages) commissioned a survey of 1,000 US small businesses (from 10 US markets) and this morning put out a press release about it. Here are the top-level findings reflected in the release:

• 63% currently advertise in a printed Yellow Pages directory, the most commonly named form of advertising among the respondents by nearly a 2-to-1 margin
• Small businesses ranked the printed yellow pages first as the medium that generates the most calls from potential customers
• About 53% said they expect to buy online ads featuring videos within the next couple of years
• About 23% advertise online currently, and two-thirds have their own Web site

More findings:

• 20% expect to spend more on Internet Yellow Pages
• 38% expect to spend more on Internet banner ads
• 43% said they spent more on keyword-search traffic this year compared with last year, and 34% expect to keep increasing that spending next year
• 72% of businesses expect to spend the same amount on print Yellow Pages advertising next year, and 11% will spend more
• 19% of respondents also expect to spend more next year on newspaper and magazine ads — the second-most mentioned medium in the survey

Here are some reactions and thoughts:

It’s always a bit of a problem when a company commissions a survey that finds, lo and behold, that its own product is the “most effective.” However, the survey was reportedly independently conducted by Western Wats Data Collection Agency.

There’s less and less clarity today about where customers are coming from, with more sources being used — though in the aggregate more customers are using the Internet as a “primary resource” (TMP Directional Marketing, 2007) than any other single medium. But within the “Internet” category, they’re coming from multiple sources (search, IYP, verticals, etc.). The perception that printed YP is the “most effective” medium is based on the legacy of the medium and not necessarily a correct perception of consumer behavior today (though in selected markets it may be).

The number of businesses that have a website in the survey (“two-thirds”) is high. It would mean that 66% percent of SMBs have a website. Clearly however the larger the headcount, the more likely to have a site and do online marketing today.

In the online SMB survey that Opus Research and AllBusiness conducted in August of this year, the self-reported number with a website was 55%, with about 12% of the SMB-respondents having more than 100 employees. Of those companies with four or fewer employees in the survey, 46% said they had a website. (Since we never defined “website” for them, this could potentially include profile pages on third-party sites.) Of those respondents with more than 100 employees, but less than 500, 75% had a website and 64% did online marketing today. Thirty nine percent of the four or fewer employees group said they did online marketing.

While I’m not clear on the precise methodology of the AT&T survey, the number that stated they currently did online advertising (23%) strikes me as fairly accurate. The Opus number is probably somewhat high because of the online survey methodology. What’s also interesting is how “advertise online” and “website” are not equated. Opus-AllBusiness also had the same general finding.

The findings surrounding online video are generally consistent between the AT&T and Opus results. AT&T found 53% “expect to buy online ads featuring videos within the next couple of years.” We found in the category of businesses with 5-24 employees that 57% indicated an intention to pursue video advertising online in the “next 12 months.” In the four and fewer employees group, the number went down to 41%.

In a fragmented, multi-platform world yellow pages are in a generally strong position to act as an “agency” for their small business advertisers across media. Print YP will remain strong and probably stand out above the noise in selected markets, though in most major metros it will decline and be weaker vs. the Internet as an aggregated category. The trend, even in the AT&T research is toward greater SMB awareness of the Internet as a critical ad medium.

Video is an interesting product because there’s high demand and it can be sold as a premium offering. And the combination of video, clicks and calls across sites and platforms could potentially bring the online product (or products plural) to within striking range of the margins generated by print.