If I Were a Yellow Pages Publisher . . .

The past few days I’ve been thinking quite a bit about the predicament of yellow pages — and by extension other traditional local media. I realize it’s very easy to be someone who sits back and critiques others’ mistakes. I often liken analysts, myself included, to movie critics. It’s much more challenging to make a movie than to criticize one after it’s been made. And in my work and writing I always try to put myself in the position of someone who’s actually under pressure to accomplish something and has real-world P&L responsibilities.

With that . . . No one has asked me to run a YP company but here’s what I’d do:

Work on the brand:

Relying on Google SEO is a losing game over the long term. You’ve got to do SEO and get even better at it — optimize for the long tail and so on. But you’ve got to develop a brand. RHD’s Dex has done this to a degree. Yellowpages.com has sort of done this (but not really). Many consumers are responding to the “generic” URL rather than brand loyalty. Superpages is trying to do this around the Super Guarantee. But it’s something that needs more attention.

Develop other brands:

Build out verticals or alternative brands that appeal to different demographic segments. See this data from the TMPDM-comScore study about usage:

Picture 4

As you might expect: print is used by older people; younger people use search engines. So if I were AT&T I’d be buying Yelp. The sales force could sell the ads and the brand would be an enormous addition to AT&T interactive (I’ve got no financial stake in Yelp and nothing personal to gain from recommending this). Notwithstanding the chart at the very bottom, Yelp’s traffic is already bigger than the IYPs:

Picture 5

If you can’t read the chart, Yelp is the blue line, Yellowpages.com is green (#2), Superpages is #3. I would argue that other YPs should try and buy Yelp but they probably can’t afford to. AT&T is probably the only one that has the cash.

Change the sales culture:

I understand that most YP publishers are working on this, but somehow they’ve got to shift the commission structure so that reps are equally incentivized to sell digital. The folks at the Kelsey Group will have more insight into the sales/commission issues and the status of those efforts than I have, however.

Work on the cost structure of the business:

Newspapers have been killed by their cost structure, which can no longer be supported by declining ad revenues. YP publishers have moved faster and more deliberately than newspapers, but they are now in danger of going the way of newspapers — less and less usage, fewer revenues.

Aggressively syndicate data/ads/etc:

YP publishers are already doing some version of this: get the ads and data out to third parties. Why not create a Local AdSense offering? To succeed it probably needs to be collaborative because there’s not enough ad coverage from any individual publisher.

Mobile — Yes

AT&T has to date been the most aggressive and experimental in mobile. Superpages has got some interesting things to announce, however, this week. Mobile is a critical area that needs to be developed much further than it is today. The new Yell iPhone app is an example of conservative thinking that may win some usage but won’t turn any heads or gain the loyalty of younger people. Here a “segmentation strategy” is probably also be called for.

More community, more social

Work with Praized, AgendiZe, Facebook Connect. Social efforts to date, with a few exceptions are weak. Facebook (and maybe Twitter) + local may be the other punch the industry didn’t see coming.

Create a lab environment where people can do crazy stuff and be creative:

Superpages’ Seattle office (former InfoSpace) is the best example I know of this. Rod Diefendorf and Pete Schwab in that office are working on some “crazy shit” as they say. The Twitter implementation, even if it doesn’t wind up driving lots of traffic, is an example of a creative risk. They’re doing other interesting stuff as well. Their freedom and the fact that they’re not from the traditional YP culture enables them to think differently about the product.

YP publishers, at least on the interactive side, need to be more flexible and willing to launch less than perfect products and improve them over time. Risk taking is now key, paradoxically, to survival.

The European Directories-Skype deal is another creative experiment; it may not “work,” but it’s a worthy effort. And if it does kudos to them.

The consumer culture has changed drastically around traditional media companies and most of them have not changed to reflect the new reality. Culture shift in organizations is extremely difficult but it has to be done: flatten them, reward risk, creativity and initiative.

We’re now in the third quarter:

I apologize for the sports metaphor. I heard from one of the attendees at the Kelsey-YPA show that there was an underlying sense of anxiety bordering on a kind of nascent panic. That’s appropriate because things are getting much worse for YP publishers. Print directories and yellow pages will never go away but they will get a lot thinner and lose many more advertisers if they don’t accelerate change. As the “third quarter” metaphor suggests, they don’t have infinite time to make cultural changes that will help them remain viable.

Picture 7

Source: TMPDM-comScore, 9/09

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39 Responses to “If I Were a Yellow Pages Publisher . . .”

  1. AhmedF Says:

    Nice article Greg – why are you still by yourself?

  2. Greg Sterling Says:

    What do you mean?

  3. JFoerch Says:

    Homerun Greg!

  4. Rob Says:

    I think the “crazy shit” product factory concept is spot on. The traditional YP pubs (Telco) have been, for the most part, completely unimaginative in what they offer the consumer. On the other side of the equation (the sales side) I would suggest they also look really hard at the unionized sales forces. Even if the majority of YP pubs started to pump out interesting and compelling products good luck getting the unions to quickly agree to alter the sales rep’s comp structure. From what I have experienced getting “buy off” from the union to tweak what products a sales rep sells and how they get compensated is the basically the “3rd rail” of YP publishing and I haven’t seen any of the publisher willing to address that aspect of the puzzle.

  5. Greg Sterling Says:

    Rob, I’m sure you’re right.

  6. predictabuy Says:

    Good post Greg.

    I share your admiration for what Yelp has done. By focusing on serving their reviewer community they’ve become the ‘go to’ place for substantive reviews. And not only are they generating a lot of traffic, but it’s very high quality local search traffic. That is, people are going to Yelp to help them make a decision — they are looking for suggestions. That’s a better environment for advertising than say trying to advertise to someone who is just looking to get directions to a restaurant they’ve already booked.

    Things I might add to my list of ‘product initiatives if I was running a YP:
    - find a way to help small and medium businesses manage their web and mobile presence (website, SEO, landing page optimization); and
    - get in front with providing social monitoring and reputation management services.

  7. Sebastien Provencher Says:

    Greg,

    Thanks for the “Work with Praized” mention. It’s the reason I founded the company, to help Yellow Pages publishers tap into the growing potential of online word-of-mouth and social media, and now the real-time Web. As I wrote in a recent blog post, after a couple of years of preaching (somewhat in the desert) the importance of social media in the YP industry, it’s really exciting to see senior management at all major directory publishers discussing it and moving forward with all sorts of new initiatives.

  8. Greg Sterling Says:

    Eric:

    re your suggestions, I would agree . . . that gets down the product and service offerings. Web presence, online rep mgmt (stay tuned), etc. Agree. The agency model which most publishers have conceptually embraced.

  9. Pete Says:

    If I We’re a Yellow Pages Publisher . . .
    I’d stop being one.

  10. Tom Crandall Says:

    Greg,

    It seems you classify Yelp as being in a different category than IYP’s. I have been referring to Yelp, Citysearch, Open List, InsiderPages, etc., as “review directories” when conducting webinars, but I am now thinking I should categorize them all as IYP’s, because there isn’t much of a difference, and the IYP’s (anything with “yellow”) continue to add interactive elements.

    What are your thoughts?

  11. Dave Hall Says:

    Greg

    I find all of the yellow page death press interesting and to a lot of degree right on. But I think that a major reason is the sales methods, when I used to buy an ad I would see a salesman once and then he was on to the next territory, the price, it amazes me to see what the utility books are charging against what their costs are (small wonder that after a hundred years of that they have problems), and the lack of connection to the communities they serve.

    So after 2 years of study and research we have decided to get in the game. We are launching a “local” book in the community we are in and we are working to incorporate ideas for all of the problems we see. Things like social media, day in and day out contact with our advertisers, additional exposure for their ads and listings, for example we are publishing a quarterly dining guide and home improvement directory using the existing ads and listings from the book in a digest sized directory, a online and mobile component and more as we think of it.

    We are publishing 150,000 books and will be mailing them rather than hand delivering. the books are well designed, printed on glossy stock for a cleaner, crisper look, and designed with high quality graphics and layouts to be more of a “phonebook-community guide” than just a list of numbers.

    I don’t know where this will take us but I look forward to reading more of the woes of the yp industry so we can incorporate more new ideas into our business model. I do know we are headed up the road next spring to tackle a market about double our size and we will be breaking it down into smaller area books and trying even more of our ideas.
    I think the yp model suffers a lot from the same issues facing many of the people trying to work the entire country. How do you do what is in essence a local product effectively over large areas?

    I will let you know how we are doing as we go. By the way I have run a IYP for years and I have always felt that a truly effective online directory should be part of an online/print/mobile combination.

  12. Greg Sterling Says:

    Dave: hope it goes well.

  13. Greg Sterling Says:

    Todd: Wouldn’t classify Yelp as an IYP unless all local/vertical directories are going to be so classified.

  14. Marty Says:

    Greg – good article – but I feel you’re off on one point slightly. If a IYP syndicates all it’s listings as aggressively as possible what need is there anymore for the IYP’s website at all. They’ll have disseminated their own traffic and therefore value to the advertisers to nothing IMO.

  15. Sebastien Provencher Says:

    @Marty it’s a problem if they only syndicate the basic listings. It works if they syndicate their business model with them (pay-per-call numbers, product links, etc.). Yellow Pages need to atomize their content (some call it deportalization) to be able to embed themselves everywhere local conversations are happening.

  16. David Shor Says:

    IYPs’ greatest strengths are a) a HUGE remaining client base that, by virtue of them being clients STILL, are capable of being sold to, and b) a HUGE remaining sales force.

    So, getting their hands on lots of small business-oriented services (much as Deluxe Corp has done with their acquisitions of companies like APlus and Merch Engines), and buying existing portals into which they can sell local ads is, as Greg suggests, the best lowest hanging fruit.

    Asking IYP management to innovate and create products may, however, be asking too much. After all, I just received my first paper phone book on my doorstep of the season–probably 4 or 5 more competing books to come. Recycling bin here they come!

    David

  17. maria kathleen Says:

    good article — might want to check the grammar though, as it says “we’re” instead of “were”

  18. Greg Sterling Says:

    Show me the sentence and I’ll make the correction.

  19. maria kathleen Says:

    the title of the article

  20. dallasgoogleguru Says:

    Great Post Greg….. I always enjoy reading your informative discussions!

  21. Arjun Srinivasan Says:

    Nice work Greg.

    I noticed yellowbook was the only winner on reach among the traditional YPs for 2008.

    So I took a trip to their landing page and found one reason why.

    Yellowbook had a huge halloween message and tie-in with local listings. That’s cool stuff – engaged me – I’m looking for a costume. Did not find the same seasonal messaging else where on iYPs. This could be a path to explore for other iYPs.

  22. Greg Sterling Says:

    Interesting Arjun. Certainly offers more “personality” and as you suggest — engagement.

  23. Martin Wilson Says:

    Nice article. There are a number of ways that the YPs need to change their ways. The changing environment demands a significant rethink of the traditional media business models and operating principles to potentially even survive.

    The media futurist Jeffrey Cole suggested that a key challenge is the reliance on traditional advertising models, “The problem I see is that these people often believe that there is enough life left in the ‘old advertising model”. Cole went on to say “I really believe we are still waiting for ‘indigenous’ advertising techniques. I think the big breakthroughs will be digital advertising developed by those who grew up their entire life with digital media – hence the word indigenous.”

    An article I posted on why mobile is so interesting: http://www.indigo102.com/archives/521

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  29. Oscar Sousa Marques Says:

    Good article Greg.
    One issue: how to monetize yelp?

  30. Greg Sterling Says:

    Yelp is bring monetized like other directories, through featured listings. In addition there are some national advertizers. I suspect there’s a lot more that can be done in that arena … Also there are some services yelp could potentially offer that aren’t advertising per se.

  31. JT Brown Says:

    Brilliant and well said Greg.

    What can yelp do to protect their corner on the market from google local/maps?

  32. Greg Sterling Says:

    JT:

    Yelp needs to continue to build its brand; focus on mobile and think about building stronger relationships with businesses.

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