Reports of Print YP’s Demise Have Been Greatly Exaggerated

MediaPost (reg. req’d) offers a write-up of new Yellow Pages Assn-sponsored research that shows a decline in print yellow pages “references” (-100 million) and growth in online YP lookups (+300 million) from 2004 to 2005. Here’s multi-year data from Knowledge Networks/Statistical Research Inc:

            Print        Online       Total

2005: 14.5 billion 1.8 billion 16.3 billion

2004: 14.6 billion 1.5 billion 16.1 billion

2003: 14.9 billion 1.2 billion 16.1 billion

2002: 15.1 billion 1.1 billion 16.2 billion

2001: 15.1 billion     NA     15.1 billion

2000: 14.9 billion     NA     14.9 billion

The data show a net gain (combined online + print) of 200 million lookups/references in 2005. And they appear to show that print usage — as the industry has emphatically repeated for the past couple years — is basically holding, while online yellow pages are growing.

(When I was at The Kelsey Group we had data that reflected a statistically significant decline in print YP usage by local consumers from 2004 to 2005.)

Thus if the new value proposition for advertisers is combined print and online usage (and one day wireless), the medium looks healthy. (This combined metric is also being urged on newspapers.) Despite this there’s a widely held expectation among pundits and analysts that print YP usage is going to fall off a cliff at some point in the near future. (These YPA numbers suggest that cliff, if it exists at all, is still not within view.)

However, I would like get access to segmentation data by demographic and income level to see who is and is not using the print directory. Indeed, what’s at stake for the print side of the yellow pages industry – at least in the near to medium term — is not whether the book continues to be used at all, but by whom and whether it’s regarded as a primary or secondary resource.

That’s a less obvious but important point. The print yellow pages industry has always been able to claim an affluent user base. But there’s all kinds of data that reflect affluent (and younger) users are taking to the Internet, often at the expense of traditional media. IYP sites are potential beneficiaries of that online usage to be sure. But in terms of the print yellow pages, the question is whether it’s considered a primary or secondary resource and whether it’s used by the most desirable consumers or those who have less to spend and may otherwise be less appealing to marketers and merchants.

Now let’s take a look for a moment at the online numbers. According to the YPA data, there were 300 million more lookups/references on IYP sites in 2005 vs. the year before. What’s not clear from the article is who gets counted as a “yellow pages” site. Does Yahoo! Yellow Pages? What about Yahoo! Local? What about Google Maps? AOL Yellow Pages? Switchboard? Local.com? InsiderPages? Yelp?

Does that 1.8 billion query pie get divided among five, 10 or 15 sites? It matters because the larger the number of players, the smaller the slice for any one entity.

In its traffic estimates comScore lumps the local products of the search engines and portals into the same category as SuperPages.com, YellowPages.com, DexOnline and YellowBook.com. But my guess is that the YPA definition is more restrictive and covers the online properties of the major publishers, perhaps the second-tier publishers and then a few of the major portal YP sites: probably Yahoo! YP and AOL YP and Switchboard, but not Yahoo! Local or Google Maps.

According to comScore, Americans conducted 6.3 billion searches in July, about 90% of which were on Google, Yahoo! and MSN. Google had 2.7 billion queries in July according to comScore. Nielsen basically agrees with that figure; its estimate was 2.8 billion searches for Google.

Accordingly the search industry is on track to record about 75 billion annual searches in the US market. The 1.8 billion searches/references captured by the online YP industry (however defined) in 2005 is a tiny sliver by comparison.

That’s not entirely an “apples to apples” comparison because search is used much more broadly than IYP sites. IYP sites are almost exclusively commercial while search usage encompasses widespread non-commercial use.

In a more apples to apples context, early in 2005 the YPA announced the results of a study by comScore comparing the performance of search engines and IYP sites in five consumer categories: financial services, health care, home services, automotive products and services, and restaurant dining. That study found:

  • A better user experience on IYP sites (narrowly defined by the number of clicks to get to a result)
  • Higher spending by IYP users in each of the categories
  • Attractive, affluent users of IYP sites (i.e., $100K+ incomes) vs. the Internet as a whole

IYP sites certainly have respectable online traffic, but it’s tiny compared to search. Accordingly, the message online has to be one of quality vs. quantity: better leads, more “ready to buy” consumers than with other online media. (And there are other services that the YP industry is now offering local advertisers [e.g., websites and simplified search marketing].)

Offline, clearly millions of people are still using the print yellow pages. Yet, as I mentioned, the print side of the business has a growing PR problem. Increasingly analysts and influencers expect the bottom to fall out. Many VCs and financial analysts I speak with offer some version of the following: “I don’t use the print yellow pages and nobody I know does either.”

If the Knowledge Networks/SRI data are accepted, print has suffered somewhat but it’s still healthy and not going to die any time soon. (Seven to 10 years from now the picture may be quite different.) In the meantime, the YPA PR folks need to get out there and, to paraphrase Mark Twain, make sure the world understands that reports of print’s demise have been greatly exaggerated.

4 Responses to “Reports of Print YP’s Demise Have Been Greatly Exaggerated”

  1. AhmedF Says:

    I have absolutely no faith in the printed # of YP books having correlation to use. Just in the condo I Live in, there are roughly 250 YP books just sitting around gathering dust in the mailroom. I’ve seen 100+ books just sitting around at almost every single condo I have visited. At my door, in the last 12 months, I have received 3 copies of the local yellowpages (I’m up here in Toronto).

    It is a bit ironic. All this noise about clickfraud, and no one turns aroudn and questions nielson ratings / print distributions.

  2. Pat Marshall Says:

    What the research data doesn’t tell us, at least not as cited herein, is the “quality” of the look-ups. When the YP industry experienced the very significant decline of annual references between 1995 and 2000 (from approximately 19.5 billion to 15.5 billion) it was felt by many that this meant the beginning of the end for printed YP. Work done by Dr. Dennis Fromholzer at CRM Associates demonstrated that, in fact, the value of these references to advertisers had actually increased as the vast majority of the lost look-ups were product or service research related. What Dennis’ analysis showed was that people did research online and then purchased locally offline and continued to rely on the YP to guide them to a merchant who sold the product or service they wished to purchase. This “last mile” of the purchase transaction has always been the strength of YP.

    I think we should be less interested in the quantity of look-ups and more interested in the quality. As example, I once spoke to the VP-Marketing of a large national YP advertiser who informed me that their IYP advertising had an ROI that was 15 times as great as their advertising with the search engines. Why? Because people searching IYPs were far more likely to make a purchase rather than to simply obtain information. It seems to me that the YP industry should not get into the battle of who is bigger, but rather who is better.

  3. Ryan Says:

    Whether the YP are working for you or not, you can take advantage of the increase in internet usage by signing up at http://www.merchantcircle.com
    and automatically getting your business placed in search engines with your own pre-built web page.

  4. Ed Says:

    The Deutsche Bank Securities Inc Report titled – Yellow Pages: A Wall Street view (April 25, 2006) confirms, what I’ve always known to be a fact – it states “European YP Industry is several years ahead of the US with online contributing 15% to revenue (ex-voice) vs just 5% for US publishers (DB est)

    But we are now witnessing a rapid race to narrow that gap in the US, the next two years will determine the movers & shakers – watch out for http://www.yellowbook.com

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