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Local Search and Yellow Pages (2/2) August 24, 2006

Posted by NoWires in Local search, Technology, Web.

Are Yellow Pages a dying breed?

A lot of companies are doing the bidding. Besides search engines like Google and Yahoo that are offering local services with maps, coupons and other features, many startups are aiming at that space as well. Websites such as InsidePages and Judy’s Book are creatinglisting services with social networking features that let consumers create feedbacks. They emphysize the “word-of-mouth” aspect of finding services.

My previous post looked at the current numbers for online and YP accesses. However, the very fact that Yellow Pages are everywhere indicates from a distribution perspective YPs have reached saturation – there is no untapped markets left for them to deliver their product. The only hope of growth is to get more businesses listed in the yellow books and having them placing bigger ad. There they run into their second problem: the yellow book has physical limitations. Any yellow page that is over a couple of inches thick is just not very practical to use.

On the other hand, online services don’t have these issues. One estimate that about 50% of Internet users uses it to look for local services so apparently there area lot of head room. Being online eliminates the size problem altogether. Another advantage of online services are the ability to search – it can be a lot more efficient than browsing if it is done right.

Before you rush out and throw away your Yellow Page book, let’s not forget YPs still have a number of tricks in their bags to fend for themselves. The local ad market is very hard to penetrate. Being the incumbent YPs have an established sales network that gives them the edge. One might argue that this increases the transaction costs and takes away their scalability. That might be true, but one must have penetration before having scalability, especially for newcomers.

Another factor no one should overlook is this: Yellow Pages are closely associated with telephones. You look in Yellow Pages when you want to call somebody. And phone calls are a lot more valuable to merchants than web-clicks. That’s because phone calls typically happens late in the purchasing process, and they give businesses a better chance at closing the deal. Some estimates put the conversion rate of phone calls order of magnitude higher than mouse clicks. That’s why we started seeing online services like Google and AOL begin to experiment with “click-to-call” services.

Promising as online services are, whoever wants to compete with Yellow Pages and create an alternative for finding local businesses will have to find ways to overcome these obstacles.

Did I mention getting rid of print Yellow Pages saves trees?



1. Dan - August 25, 2006

I agree wholeheartedly that Yellow Pages and upstart Local Search directories must find better ways to connect buyers and sellers. Click to Call is an obvious choice as it not only provides an immediate (and free) connection for the consumer, but it also makes it easier for the directory to prove ROI to the advertiser by showing which ads are generating calls.

While studies show that younger audiences are leaning towards online directories, millions of people still use print yellow pages. This may not be the case 10 years down the road, but for now there’s still an audience and therefore there are still advertisers. Many of these long-time yellow pages advertisers don’t have a Website, so they haven’t even considered the possibility of advertising online. So how do you transition advertisers who’ve only bought print ads to the online world? By making sure they get what they want…phone calls, not clicks. And, click to call and call tracking make that possible.

However, I wouldn’t rule out the print books just yet. Verizon has shown some innovation recently by bringing a “web-inspired” bidding and auction process that allows businesses to bid for large generic print ads as part of their online ad packages. Using call tracking technology by eStara, the publisher can guarantee that the highest bidder on any given day will receive the phone calls made from that ad, while ensuring that the previous day’s high bidder continues to get calls from consumers that saw the ad when they had the highest bid.

2. NoWires - August 25, 2006

Click-to-call is very interesting. It has many traits of the CPC model that made search engines marketing so effective. I think it has great potential. One issue though, is how to bridge the net/print ads and a phone call? The current practices I saw so far, such as automatic call backs, are still combersome to use. Like you said, not everyone sit in front of a PC with microphones stuck near their mouths.

3. Jim - August 27, 2006

Let’s look at three specific points –

USABILITY: A big difference in user friendliness is that the print directories are typically close at hand while using IYP can be cumbersome to engage. Unless you care enough to install a toolbar you have to “work” to pull up an IYP – you might as well just “Google it”. Another big difference is that in the print directory you can get larger amounts of content quicker and easier than reviewing IYP listings and drilling down over-and-over for more info. What you get on IYP results pages is exactly what YP reps say doesn’t work – name, address and phone number. You have to dig and dig to find content and side-by-side comparisons are almost impossible. Search engine results pages at least provide an info snippet to help you quickly assess the relevancy of search results. IYP is not as easy to use as print yellow pages or top level searches on search engines.

COST: Trying to be prominent in YP print and IYP online is brutal to a small business budget. Compared to Search Engine Optimization IYP can be very expensive -especially if you are a small business where a purchase is typically only a few hundred dollars. You have to generate hefty gross margins (every month!) to cover the cost of being ranked high. If you are ranked low you are probably wasting your money since people don’t scroll through 20,30,40,50 listings to find your company. IF yellow pages works you should maintain a modest print presence and invest in a professional website that is optimized for good natural search engine ranking. Note that the YP companies that offer web design do not specialize in SEO so your chances for high ranking are low which diminishes the value proposition – and compared to an independent web development firm their pricing is ridiculous. Don’t think that spending money on any “guaranteed click” programs is the answer. (Ask your rep for 3 references that will rave about their program and check the response.) IYP can be very expensive and it is not good for every business.

REALITY: While the IYP concept has some merit you must recognize that IYP is the result of a highly profitable business (YP) trying to stay alive and maintain high profit margins. The major Search Engines are user focused, innovative and quick acting. Internet users seek information and are not confined to a “phone book” mentality. The success of online advertising will not be IYP but rather a hybrid of formats developed by the likes of Google, Yahoo, MSN and MySpace. People want to have the “fewest mouse clicks to get gratification” and if “Content Is King” then a quality website with first page ranking for your keywords is worth far more than IYP. For now even the print books remain a better value than IYP. As wireless services increase the print books will survive but will lose value in a manner similar to radio after the advent of television. Things change and YP is going to see some rough times ahead.

The bottom line for any business is to be located where the eyes are focused for the lowest possible cost. This is changing for every business and even quicker for some. My contacts use straight Internet searches for what they want, not to find an IYP to then start searching. Otherwise they use the old print book. IYP is out there but not where I would spend my money.

4. CTMasterson - September 1, 2006

I think the REAL future of yellow pages can be seen with ACS Alaska Yellow Pages. The on-line version is just that, an on-line versionof the off line printing.

You could put a monitor and keyboard onto every city street corner or even into every business in America.

People will still want a printed version sitting next to the terminal.

The amount of information that it gives you on a two page spread with a simple flip to the next page is 100 times what a computer screen can offer….and the information is 100% local.

Few people need a global reference for plumbers.

On the other hand, if all lawyers lived on some island somewhere………….

5. Danial Ahchow - September 14, 2006

Have you seen the Australian solution? Service Central finds all types of services for consumers, 14,500 found already! http://www.servicecentral.com.au

6. Paul Boicovitis - July 25, 2007

Print is dying? Online is the answer?? I wonder then why newspapers are enjoying greater circulation than ever before yet struggle to sell online subscription to this “obviously” online market. The recent Harry Potter book launch globally is a sobering reminder that most people still require something tangible at hand that they have control over – when was the last time you paid to read a book online?? (a decade ago “online books” was written about as the “next big thing”) More and more consumers are complaining of the marketing “noise” they are bombarded with every day – they channel surf during commercial breaks on TV, skip stations on the radio. How many of YOU reading this have ads loaded on your iPod between the songs? When I want a marketing message, I want to control it – be able to flip the page or drill down for more information as I demand it, and don’t you dare send me a pop-up or broadcast a message I am not ready to hear. Directional mediums, both print or online, may sit idle for 95% of the time but be grateful that they are still there when you are ready to make a purchase and you want to be in control of the content.

7. Taylor Walsh - July 30, 2007


Current research shows clearly that newspaper circulation continues to recede dramatically, and with it total advertising dollars. Newspaper web site ad dollars, on the other hand, grew more than 30% in the last year. Just as importantly, the ad revenue from national advertisers in local papers has also continued to fall.

We’re deep into the on-demand world you’re talking about and books surely are a different beast than a news creature. There is room for both. The problem is: what becomes of news reporting when its main substantive carrier – the newspaper – no longer has the financial wherewithall to sustain doing”the news?”

8. James Hobson - December 8, 2008

Here we are, two years from my previous post. The Atlanta print directory (from “The Big Company”) has withered from two hefty books into one lone book which is collapsing more every year. The IYP products are being sold reasonably well although retention continues to be an issue.

Branding has done little to stem the loss of market share as aggressive niche players like CitySearch, Kudzu, and Merchant Circle pound away on the slow moving IYP products.

We have a lot of customers that have migrated away from anything Yellow and consistently remark how much money they save, how much more they make, and how they enjoy not going through the annual YP hustle.

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