Tuesday, March 18, 2008

Don't Start Digging Graves for Yellow Pages Just Yet

Fast Money declared Yellow Pages dead last week. In the interview, the Fast Money Traders appear to argue a good case without seeing the upside of what’s happening in the industry. Yes, stock prices are down – but that doesn’t mean we should pick up our shovels and start digging graves just yet.

David Swanson, CEO of R.H. Donnelley Corp had something to say on CNBC in response to the Yellow Page attack. Swanson focused on the misperception of usage and the diversity of offerings by the Yellow Page companies. He said, “This year 13.4 billion people referenced the print Yellow Pages. Last year it was the same. Now add to that the fact we’re diversified online. Internet yellow pages received up to 17.2 billion references.”

It can’t be that bad if companies like Yellow Book continue to expand amidst a volatile market. As recent as March 16, 2008, Yellow Book announced an expansion into South Carolina and Yellowpages.com entered into a large deal with Microsoft.

- CNN Money: http://money.cnn.com/news/newsfeeds/articles/djf500/200803171309DOWJONESDJONLINE000658_FORTUNE5.htm

- Reuters: http://www.reuters.com/article/internetNews/idUSN1757648920080317

As long as the leading Yellow Page companies continue to expand and enhance their online offerings, they aren’t going anywhere. I do presume, however, that we will continue to see changes during the coming months.


Jehicksiii said...

What you are describing is the financial management of businesses who’s products are in a mature phase of their product life cycle. Let’s talk about consumer behavior with regard to Yellow pages and the broader category of Local Search.

Are consumers changing how they find information about local businesses and services? You bet they are. This change is, however, not an overnight change. It is gradual and will occur at a different pace for different demographic and geographic groups. For example the shift to online local searches in rural markets will be slower than in urban markets. Perhaps because of broad band penetration but also because the rural markets tend to hang on to community type values more stringently than in more densely populated markets.

So, if you are planning for ways that your customer can find you, you may not want to be out of the printed yellow pages for some time to come. You may just want to reduce the size of your ad and invested the saving in some online search which will give you broader market coverage.

The bottom line is that you need to understand the behavior of your target market and make sure you are planning to be the local search vehicles where they will expect to find you. Oh that’s a novel concept, finding out what your target expect for your business. Well not really but perhaps an often forgotten or disregarded concept.

by James Edward Hicks III


Anonymous said...

Seems to be a lively topic. One of the more pointed arguments against the yellow page directories is a blog called yellow page the dinosaur. Can't get more direct than that.