Here is an interesting item from the local CBS station in San Francisco. Apparently a 20 percent off coupon in a San Francisco Yellow Pages directory (the item doesn’t say which one) for the Rainbow Grocery in the Mission District is so popular that it has made the local book a hot commodity, at least for bargain organic grocery shoppers. Apparently people are tearing out the coupon page from any book they can get their hands on. The report cites the recession’s impact on consumer behavior — namely more coupon clipping — as a key driver. It’s interesting to read anything that suggests print still has legs in San Francisco, even if it’s for a reason we wouldn’t have expected.

Update: We’ve since confirmed the book in question is the AT&T Yellow Pages.

According to an article this week on Forbes.com, AT&T will launch a Yelp meets Yellow Pages site later this year. The new site will carry a new brand that does not invoke Yellow Pages, but something that appeals to the non-Yellow Pages crowd, namely people under 30 who rarely or never use the phone book or an IYP. The article cites AT&T’s David Yoo in explaining how the site will perform in a different manner from Yellow Pages, while leveraging YP content:

While Yellowpages.com returns data based on advertisers’ profiles, similar to a directory, the new site will prioritize results based on a user’s social connections and recommendations, says Yoo.

On this new site, a search for a sushi restaurant could pull suggestions from a broad group of friends. A more targeted query, such as one for a pediatric dentist, would be handled differently. Rather than search a user’s entire social network, the site would only provide recommendations from friends and relatives who currently have kids.

The European directory publisher Truvo is following a similar strategy. It recently launched Truvo.com, a local search site in Belgium that is built on a foundation of user-generated content.

The May launch follows Truvo’s acquisition earlier in the year of the European social media company YelloYello. The new site is built on the YelloYello platform, and is based on user-generated content rather than Yellow Pages listings. The new Truvo.com site is the second example, the first being Truvo Mobile, of the company leveraging its corporate brand into a consumer brand, by passing the traditional YP brands (Gouden Gids, etc.). The rationale is the same as AT&T’s: reach out to younger consumers who have no affinity to the traditional media products or brands.

Yesterday, Chris Cummings,Yellow Pages Association chair and Marquette Group CEO,   accepted our invitation to deliver a featured presentation at Directional Media Strategies ‘09. He will speak on the event’s opening day, Sept. 22.

Cummings joins a powerful list of directory company CEOs who will address DMS, which for the first time is being co-presented by the YPA. Joining Cummings as featured speakers are Frank Jules, president and CEO, AT&T Advertising Solutions; Donat Retif, CEO of Truvo; and Dave Swanson, chairman and CEO of R.H. Donnelley.

Cummings is a longstanding industry leader from the national side of the business. He is the first CMR ever to serve as the association’s chair. He can offer a view of the industry today from the point of view of national advertisers. He can also talk about what the industry needs to do collectively to succeed.

Three CEOs who together represent almost 30 percent of global directional media revenues will give featured presentations at The Kelsey Group’s Directional Media Strategies, Sept. 22-24, in Orlando, Florida.

Dave Swanson, chairman and CEO of R.H. Donnelley, will deliver the featured presentation on the event’s second day. RHD has experienced all the ups and downs that the era of publicly traded directory companies has had to offer. I’m interested in hearing Swanson’s take on the way forward for RHD and Yellow Pages industry.

Donat Retif, CEO of Truvo, a European directory publisher with operations in Belgium, Ireland, Portugal and Romania, will talk about his company’s aggressive efforts to migrate the business from a subscription based business model to one that is largely pay for performance. Having met with and interviewed Retif recently, I am struck by how plainspoken he is in assessing the situation his company and the global directory industry faces.

Retif will speak on the morning of the conference’s final day, Wednesday, Sept. 24.

All three executives are at the epicenter of efforts to transform the directory business from a medium that is static and product-centric into one that is dynamic and performance driven. This requires changes in culture, business models, systems, recruitment and training, and on and on. DMS will be all about understanding how these efforts are unfolding and where they are leading the directory industry.

This year, DMS is partnering with the Yellow Pages Association, an alliance we announced Monday morning. We’re pleased to join forces with the YPA to put on the most compelling, hard-hitting and insightful event yet covering the global directories industry. Check out DMS ’09 here, and don’t hesitate to post your questions and suggestions.

Today R.H. Donnelley made an announcement that is unlikely to be much of a surprise. The company said it has “filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in order to consummate a balance sheet restructuring.”

Today’s announcement also says that RHD has worked out a deal with key creditors to reduce its debt by US$6.4 billion and eliminate about US$500 million in annual interest payments. RHD’s current total debt is about US$9 billion, so the announced deal significantly reduces the company’s leverage.

RHD follows Idearc Media, which announced its own bankruptcy back in March.

This is not surprising in part because of Idearc’s own bankruptcy as well as numerous reports in recent weeks that RHD was working with its creditor on ways to repair its balance sheet. Like Idearc, RHD’s underlying business, while troubled, still has a lot to offer, including the ability to generate cash, a large sales force and relationships with hundred of thousands of small-business advertisers. These are assets envied by media businesses with healthier balance sheets.

While bankruptcies are always painful, it appears to be the best way for both Idearc and RHD to get the fresh starts they need to build sustainable directional media businesses, something that was difficult to impossible with the debt loads the two companies are carrying. In the short run, this may seem like a black eye for the directory industry. In the longer run, it may turn out to be a positive.

Here is an interesting take from Kirk Whisler, who runs something call the Latino Print Network. His assertion is that while print may be a waning component of U.S. media generally, it is still going strong in Spanish-language media.

Whisler asserts that while English-language newspapers may be in freefall, the same should not be assumed about Hispanic print publications, particularly magazines and weeklies. He acknowledges the steep drop in the number of Spanish-language Yellow Pages directories in the United States, but attributes the drop to the failure of two over-leveraged firms (we assume he is referring to Hispanic Yellow Pages of America and HYP Network).

We think he may be off the mark regarding Spanish-language Yellow Pages, which battle with incumbent and independent print directories for ad dollars in a shrinking market. But his broader point that print may be doing better in certain market niches than the market as a whole is worth noting.

Carol Johnson, the former Dex (then US West Direct) sales executive who led the high-profile turnaround of the Sensis sales culture, has announced she is leaving the Australian directory publisher at the end of May to return to the United States. Her replacement has not yet been named.

Johnson first joined Sensis as chief operating officer back in 2007, following a stint leading a turnaround effort at Singapore Yellow Pages.

Johnson is given a large share of the credit for helping Sensis invigorate its sales culture and the performance of its core print Yellow and White Pages products. Johnson’s approach combined a hard-nosed emphasis on execution with softer motivational elements. Key components of the program included a major increase in call measurement, the elimination of discounting, promotion of usage, focus on distribution, and instilling a belief in the core product throughout the organization.

Here is how the press release announcing Johnson’s departure described her legacy:

Implementation of her Sales Effectiveness and Usage programs resulted in world leading results with Sensis achieving 7.2 percent total revenue growth in FY08 versus 4.2 percent the previous year.  Significantly, print revenue growth was 5.4 percent.

In addition, Sensis’ first half year report ending December 08 reports another world leading revenue growth achievement of 5.9 percent (including all major campaigns) representing 1pp improvement over the same time the previous year.

As Johnson and fellow American ex-pat JoLynne Whiting make their way back to the States following their tenure at Sensis, two big questions remain. Will the systems and sales culture they helped put in place carry forward? And will the improvements they helped achieve be lasting? Until these questions are answered, it is certainly fair at least to say that Johnson helped make a positive difference in the financial performance of Sensis during her tenure.

Update 5/28/09: We just learned that Johnson is being replaced as COO by Gerry Sutton, who was general manager of information technology.

The Canadian start-up MyVirtualPaper.com has finalized a deal with the Mexican directory publisher Seccion Amarilla to create SEO-ready Web pages using a small-business advertiser’s existing business papers (think menus, fliers, brochures and catalogs). One of the MVP product’s key selling points is that it takes much of the complexity out of the interaction with the small-businesses owner by reducing the conversation to, “Give me your brochure and we will create an SEO-ready Web page out of it.” Seccion Amarilla also will use MVP to do online conversions for the publisher’s 40 U.S. Spanish language print directories.

Seccion Amarilla follows Yellow Pages Group in Canada, which has been trialing the MVP solution since last year, and rolled it out across Canada this month.

Seccion Amarilla Marketing Director Sergio Dominguez told The Kelsey Group today that the MVP solution is part of a broader rollout of new online products this year, including online video. He said the ability to easily Web-enable small businesses was a key appeal of MVP, given the relative lack of online development of Mexico’s small-business community.

“That was one of the most interesting benefits,” Dominguez told us. He estimates that somewhere between 5 percent to 10 percent of Mexican small businesses have an online presence, which suggests tremendous upside for Seccion Amarilla if it can position a solution to small businesses that simplifies creating an online presence.

The U.K. directory publisher Yell unveiled its SEM offering today, which features an alliance with Google to become an AdWords reseller. The service offering will include the creation of SEO-friendly landing pages as well as Google AdWords.

From the press release:

Yell has launched a new service for SMEs — the Search Marketing Service — that will complement our existing UK products and services — Yellow Pages, Yell.com and 118 24 7 — by offering SMEs a Yell-managed service by which they can promote themselves on search engines such as Google, generating additional sales leads.    

Yell has experimented in the past with the right level of cooperation with Google, which is the dominant search platform in the U.K. Under Yell.com President Mark Canon, the company seems to have come down on the side of “if you can’t beat them, join them.”

More from the announcement:

Launch of the service is a further significant step in Yell’s strategy to be the best provider of business leads for SMEs in the UK the Yell service creates simple, effective adverts as part of an AdWords campaign which are displayed when consumers search on Google and they can then click on the ad to be connected to a web page created and hosted by Yell.

SMEs chose how many leads they can handle and how much they want to spend, with flexible contracts and flexible monthly pricing. In addition to the AdWords product, the Yell Search Marketing Service offers the creation of other search engine friendly web pages designed to be displayed in the natural listings of search engines. 

A couple of industry forecasts have been floating around lately. One that was working its way across the wires today got my attention. It suggests that the U.S. Yellow Pages market will contract by a mere 0.5 percent in 2009. This figure is quite a bit different from the 13 percent 2009 decline that The Kelsey Group forecast in March. As an author of TKG’s annual Global Yellow Pages forecast, I am reluctant to nitpick someone else’s view of the market, but the difference here is so big that I feel compelled to make a few observations.

While there are many different players in the Yellow Pages market with different growth characteristics, the four largest publishers, AT&T, Idearc, RHD and Yellowbook, drive a substantial share of total revenues, and collectively, it is not a stretch to expect double-digit declines this year from this group of publishers. This alone seems to support our view that 2009 will be a very difficult year, particularly for print Yellow Pages. Many of the publishers we spoke with in the course of building our forecast shared this view with us.

And it has to be said that we do not believe the large incumbent publishers will be the only ones feeling the pain in 2009. While many independent publishers continue to grow nicely through this difficult economy, others are struggling, and some have begun discontinuing non-performing books. A few have ceased operations. This is the natural order of things when a competitive marketplace runs face first into a deep recession.

Part of the process of putting together our biannual Global Yellow Pages report is to talk to industry leaders about where the business is heading; John Kelsey and I have been conducting interviews with industry leaders over the past several weeks. While we’ve come across some strong diversity of views, some things have been pretty consistent. Publishers all love print, but at some level most of them get that their future business will treat print as just one of many sources of leads that they will deliver to their customers. Print will be part of the future, but its importance will diminish, in some cases gradually, in others more rapidly. Publishers have also been pretty forthright about how tough the business is now, for print in particular. And many leaders do not believe this recession will be like those in the past, where print Yellow Pages roars back once the economy improves.

One thing I have felt in the past several months is a newfound appreciation for candor and honest self-assessment in this business. Yes, there is some backlash against “pessimism” and some very legitimate frustration with the negative tone of press and blog coverage of this industry. The snarky tone and assumption that no one uses Yellow Pages that is so prevalent in coverage is annoying because it reflects arrogance and laziness. But we also know deep down that bad press is one of the industry’s problems. It isn’t THE problem.

In the process of building our forecast and stress testing it with industry insiders, and in researching our Global Yellow Pages report, we have gained a pretty good understanding of the levers that will guide this business over the next several years. And we also feel like we have a very realistic view of what the numbers will look like (this is not a claim of perfection by any means). There is plenty of reason for hope for those that prepare. The industry still has lots of opportunity. It is also safe to say, however, that most in the U.S. directory business would be very pleased with a 0.5 percent decline this year. I just don’t know anyone who believes the industry will get off that easily.