Mark Twain’s famous comment could have been an appropriate closing metaphor of the EADP fall conference. The EADP conference featured a rather dynamic roundtable of five CEOs of leading European Yellow Pages directory publishing companies who discussed the future of their industry. Battered by a severe recession, declining print circulation, gloomy predictions about a potential knock-out of print publishing by 2020 and Google winning the war on clicks, could have provided the backdrop for a potentially somber gathering. The organizers faced an equal challenge: Two of the executives chosen for the debate had been fired just weeks before the conference and had to be replaced, while the US based parent of a presenting company filed chapter 11.
The positive attitudes and new business models presented left participants with the conclusion that the current recession and the impact of Google serves as a catalyst for a more rapid transformation from print to digital. The Yellow Pages industry still had formidable core assets at their disposal (a large client base of SMEs, a sales force for local reach, content and brand) all of which can be leveraged to survive in the digital age.
The above charts illustrate the current problem of decline in print directories and the growth in digital services. However as the USA example indicates, transition to digital directories is not fast enough to compensate for the decline in print. The key to transformation is redefining the market and to move into online advertising and communication spending. This market segment is significantly larger than the current market for print directories and online directories. Bain & Company presented on the subject and most participants concurred with this definition.
Managing the transition will be challenging and all depends on execution. The Yellow Pages industry has significant assets which can be leveraged for digital media, but the industry will need different capabilities and tools. Above all a change in culture or “overcoming the fear of the unknown” is required as one presenter stated bluntly.
The battleground will be the SME segment. SMEs have an unmet need for Website development and for Websites that generate leads. Not more advertising or more clicks, but leads that can be converted into sales. Some Yellow Pages publishers are experimenting with new pricing models, charging per lead or sales conversion as compared to billing for a particular space advertisement.
A major asset in the fight against Google is the Yellow Pages sales force providing local reach, which Google, as a technology company, does not possess. However there are challenges: Currently Yellow Pages sales forces are focused on closing directories based on fixed publishing schedules, generally once a year. Managing online advertising and communications spending for SMEs requires more frequent contacts, different capabilities and tools. For instance one CEO stated that new mind sets are needed and the likely candidates for new hires will come from online services, rather than from the traditional print directory business. Creating vertical segments will open new opportunities, but will require new skill sets to compete with other digital media.
Content is seen as a great asset but needs enrichment with relevant information surrounding an SMEs business and their entire services spectrum. The objective is to grow audience and to increase leads. Vertical search coupled with a more intensive consultative relationship with SMEs will lead to content enrichment (sales force to collect relevant data). This may also be an area where Yellow Pages publishers will seek partnerships. There are some directory publishers that have moved into verticals and have been able to enrich content to provide credit information. Therefore content providers for marketing, sales and credit information solutions better watch out as Yellow Pages publisher are gearing up to move into their space. On the other hand other content providers have similar assets which can be leveraged for entry into the digital directory business.
The Yellow Pages Brand is still very much engrained in the consumers mind as a print publication. A lot of brand advocacy will be required to change that perception. Reaching consumers with a range of distribution channels, Mobile phones, for instance, is very much underway. Services which provide instant feedback on customer satisfaction will be essential to tell an SME how the business is performing relative to the information conveyed in the digital media. Based on the positive feedback from the EADP conference the assumptions about the imminent death of the Yellow Pages industry may be indeed premature.
BIIA Newsletter October I – 2010 Issue