Today is Herb Gordon’s last day as a consultant to the Association of Directory Marketing, Inc., although he will continue to edit ADM Flash. Flash, the newsletter of the ADM, is sent to more than 1,500 people, and its stories, factoids and tidbits provide direction to those of us in the Yellow Pages industry. Herb is a prolific reader and using both offline and online sources, ADM Flash will advise you that “Yellow Pages Group launched a new local guide for living green and recycling” (press release), that Verizon ranked first in ad spending at $2.2 billion in the U.S. in 2008 (AdAge) and that “SmartPhone rises fast from gadget to necessity” (NY Times). It is one of those pleasant reads that is valuable, interesting and fun.

I called Herb to wish him well. In my view, Herb has had a very positive impact on the industry. He has been a constant in the middle of continuing change, and he has helped guide the industry with a steady hand. (Some of the other leaders with similar credentials include Jim Logan, Elmer Smith and Marilyn Neal … although there are many more.) Not surprisingly, Herb is positive about Yellow Pages. “As a member of all three industry boards — ADM, ADP and YPA — I am convinced the industry has the top management to weather the economic storm and be stronger for it.”

Before joining the ADM as president and CEO in 1991, he was the president of the Yellow Pages division of Ketchum (where he had worked since 1965) and had also been president of a division that encompassed direct marketing, sales promotion and a medical unit. “This experience prepared me well for my responsibilities at ADM. I came with an appreciation of quality research and marketing, the importance of good communications and a sensitivity to responding quickly to clients.” Herb is quick to give credit where it is due. “Any manager knows that he is only as good as the people on his staff. I’ve been blessed in that regard and particularly that Nancy Augustine has worked with me in three different assignments over 30 years. She is one of the most effective executives I’ve ever known.”

In response to a question about what stands out during his career, Herb said “the resounding success of Yellow Pages’ call measurement programs, such as Marketing the Medium and Measurement and Accountability Partnership. Return on Investment is the backbone of these initiatives.” Because the industry “can readily prove it delivers customers with positive ROI,” Herb believes that “the Yellow Pages industry is very well positioned for the future. It has good Internet products. While print references have dipped, the effect is moderate compared to other traditional media. The print product still delivers cost-effective leads for advertisers. There is a strong local and national sales force. Publishers, CMRs and suppliers are willing to invest. I’m very optimistic about the future.”

Don’t take The Kelsey Group’s word for the fact that more marketers are switching some of their advertising dollars into the Internet. Here’s what eMarketer wrote a week ago. “In the wake of the global economic downturn, marketers worldwide are shifting more of their budgets into cheaper, more-measurable categories.” The fact that eMarketer actually put those words into an article can only be traced to the fact that it got some hard numbers from the Society of Digital Agencies. It is no surprise that “81 percent of respondents said they plan to invest at least as much in digital marketing in 2009 as in the previous year.”

Happily, eMarketer backs up these figures with another study by Ad Media Partners. The research shows that marketing executives are planning to increase digital spending in social media marketing (77 percent), search marketing (76 percent), mobile marketing (75 percent), behavioral marketing (70 percent), lead generation (63 percent), video advertising (60 percent) and e-mail marketing (58 percent).

EMarketer sums all this up by pointing out that “the combination of accountability, conversion and the infusion of digital media into every facet of life makes the future look bright — for marketers making the move to digital.”

Anyone in the radio or television broadcasting industry who needs to understand how to best take advantage of digital media needs to be at the Winning Media Strategies conference to be held May 20-22 at the Marriott Wardman Park in Washington, D.C. The Kelsey Group and BIA Advisory Services have put together an event that will pay incredible dividends to those broadcasters willing to make the small investment of time and money.

Recently the company that delivers Idearc Yellow Pages in the Princeton, NJ, area brought our office a few copies of the most recent edition. I imagine that most people do what I did when the book came, which was to check to make sure both my residential and business listings were in the directory. (They were!)

The next thing I did is probably relatively unusual. I quizzed the guy who delivered the telephone directories. I asked him if he delivers books to the inside of businesses, and he said when the door was open, yes. How many businesses tell him that they do not want a Yellow Pages, I inquired. He gave me sort of a strange look and he said almost no one. In fact, he couldn’t remember anyone recently telling him to take it back. If the door is locked, he leaves a few directories based on a rough estimate of what similar-sized businesses say they want. He did not know the term “opt-out,” and he told me he delivers to everyone.

I couldn’t resist the next question: Do you use the Yellow Pages? He shirked and said no, his wife does, but he himself prefers the computer for local search.

The New York Times publishes separate sports and business sections on Saturday, Sunday and Monday. It may soon move away from separate sections altogether. This past Saturday, there was not a single display ad in either the sports or the news sections of the paper. There was less than a quarter page of classified advertising.

When I went to work in the new Information Services Division of Dow Jones in 1980, I was taken on a tour of the newsroom including the area where the news wires spit out a continuous flow of information called the broad tape. I remember being told that the first responsibility a reporter had was to get information out to broad tape subscribers, regardless of the topic, because every piece of news and information had value to someone. A reporter would call in a story, which would be typed by a clerk while an editor stood over him and tore the story out of the typewriter line by line. He would make the rewrites he deemed necessary on the fly, always with the objective of getting the story out quickly and accurately. The next day, if the story was judged newsworthy, a more detailed and better written article would appear in The Wall Street Journal.

Somewhere along the line, Dow Jones seems to have moved away from that notion probably thinking that its real value lay in the findings, analysis and conclusions that would differentiate its product from every other news source. Of course in 1980, Dow Jones’ only real competition was Reuters, and to a lesser extent, the AP and UPI.

In a story in today’s New York Times, The Wall Street Journal’s new top editor, Robert Thomson, was going back to basics. The article says Thomson sent a memo to news employees reminding them that “breaking news has a value that is sometimes better recognized by our readers than our journalists.” As important as analysis is, this reinforces that in the news business, meeting the information needs of customers (as opposed to journalists) really does come first.

At the end of the second day of Marketplaces 2009, my colleague Matt Booth made a statement and then asked a follow-up question. He said, “most of what I’ve been hearing from the podium is optimistic. Don’t people realize that this is a challenging business environment? Is this optimism my imagination, or is it real?” It is a fair question to ask whether the people who are able to attend Marketplaces this year are those who are doing well. It is also fair to say that most people aren’t going to sit at a head table and be negative. Still, the overwhelming mood was upbeat.

The morning keynote address was given by Citysearch CEO Jay Herratti, who is clearly bullish on the digital marketplace. He sounded a theme that many of the speakers followed up on: To win in this market, you need to be more local, more mobile, more social and more balanced (with a mixture of users, merchants and experts participating). This theme was repeated throughout the day.

The last session focused on The Directory Play in Marketplaces. Given the negative news surrounding the Yellow Pages industry, you would not expect that this would be a terribly optimistic group, but it was to this panel that Matt raised the issue of optimism. Every speaker was positive. Andrei Uglar is general manager of Weblocal.ca, which is a partnership between the giant Transcontinental Media and YellowBot, a local search site for finding and reviewing local businesses and services. Launched only four months ago, Weblocal.ca has more than 2 million unique visitors and over 3 million page views monthly. Its strategy is to keep the sale simple. It leverages Transcontinental Media’s 400 newspaper sales reps and facilitate sales by offering only one package that offers a full range of services. There is a onetime set-up fee of $200 and the cost is $89 per month regardless of market size or category. Most importantly, it is able to build on the long-standing relationships between its newspaper reps and their customers.

Emad Fanous, cofounder of YellowBot, was equally bullish on the business saying that the key to success is a good tag team that can put this together and Weblocal has this team.

Michael Oschmann of Germany’s Müller Medien echoed the other panelists in saying that his business was strong despite Google’s dominant market share in Germany.

When asked about the trends they see, the panelists came back to the same points  Citysearch’s Herratti had raised at the beginning of the day: local, mobile, social and increased user participation. The one point that they added was another that speakers talked about during the day and that is the importance of video.

Neal Polachek commented about the number of deals that people had told him were being done at the conference. I heard the same thing from exhibitors. The bottom line is that, at least at Marktplaces 2009, the mood is overwhelmingly optimistic.

Earlier this week I went to hear an economist offer his take on the current economy and how soon it would recover. Long story short, I believe the speaker, who had outstanding credentials, was overly optimistic. (I really believe he may have been on vacation on some secluded island for the past year.) In fact, his views were the most positive I have heard or read in the past six months or so. However, he did say a couple of things that I agreed with. One was that television and radio have combined their news and entertainment divisions so that a prime objective of news is now to be entertaining … that is to attract viewers and listeners. Therefore, he said, the media has good reason to say the sky is falling: It brings people in.

Recently, Sharon Begley wrote a column in Newsweek titled “Why Pundits Get Things Wrong.” She quoted a study by a research psychologist at Stanford University who concluded that there was no way to predict the accuracy of anyone’s forecasts. There was no relation to whether the forecaster was a Ph.D., an economist, a political scientist or a journalist or had any other credentials, affiliations or fame. What works for the media, she wrote, are “bold, decisive assertions that make better sound bites; bombast, swagger and certainty make for better TV.”

For more than a dozen years, The Kelsey Group has been predicting the future of the industries we cover. We take the best information we have at the time, talk to industry participants, weigh their views with our own perspectives and make forecasts of the future. We do the best we can to help our clients and the businesses we serve.

The acquisition of The Kelsey Group by BIA resulted in the combination of TKG’s strength in directional media, including all things interactive, with BIA’s strong position in television, radio and newspapers. The benefit of the merger became clear yesterday when the newly formed BIA Advisory Services released a forecast that my colleague Neal Polachek described as “an expanded and more comprehensive view of the U.S. local media sector (by widening our unique understanding) of local media by adding six categories to our forecast.”

It is a little bit unnerving to be offering a new forecast in this difficult economy. Some of the headlines about our forecast said “local ad markets shrinking,” or used terms like “declining” or “downward spiral.” Unfortunately, BIA and TKG analysts do envision local advertising revenues declining from $155.3 billion in 2008 to $144.4 billion in 2013, a negative 1.4 percent CAGR. What is notable, at least to me, is that most of that decline comes from the primarily directional media of newspaper classified advertising and print Yellow Pages. The growth is all in the equally directional Internet Yellow Pages, local search and other interactive digital advertising. There’s just not much share change in traditional direct mail, television, radio, out of home, cable or magazine advertising.

As Harry A. Jessell put it so well in today’s TVNewsday, “the newfangled competition will come, but nobody is in a better position to rule the local online world than TV stations. They have the content, the business contacts and an unmatched ability to promote.” Broadcasters should know that that was the mantra of newspapers 15 years ago. Recognition is the easy part; the hard part is following through and actually making the changes that will help you to compete.

Today’s Wall Street Journal has an article titled, “Hotels Say, We’re Businesses, Too.” The article points out that “under the rules of the Government’s Troubled Asset Relief Program companies are required to adopt policies on spending, private jets, events and conferences and office parties.” This is having a disastrous impact on many destination cities. For instance, Las Vegas hosts 22,000 business meetings a year.

Like other companies that host conferences, The Kelsey Group is feeling the impact of the economic challenges in our upcoming Marketplaces 2009 conference (formerly Drilling Down on Local). The event will be held March 16-18 at the Hyatt Regency Century Plaza in Los Angeles. We still anticipate a very strong turnout in great measure due to the incredibly strong program and speaker list, as well as our reputation for providing a very healthy return on investment for attendees and sponsors.

Still, many companies have put into place restrictions on travel and conference attendance even though an event such as Marketplaces 2009 is not covered by the TARP rules. Executives at all levels find the need to gain approval to go to a business conference, even though an event like Marketplaces 2009 brings the decision makers to attendees saving them time and money (compared with visiting clients in person) while also gaining rich learning and prospecting opportunities.

In this economy of our discontent, my colleagues Peter Krasilovsky, Michael Boland, Matt Booth and Neal Polachek have put together a conference that is worth going to your boss to get approval. As Peter wrote: “Online and mobile applications are poised to become the disruptive forces that dislodge (or reinforce) traditional media.” Local search, social media, online video and the rapid evolution in the media marketplace will be discussed by the leaders in the industry. You will come away with an ROI that will satisfy even the most demanding management.

In 1996, one of our keynote speakers at a Kelsey conference was Greg Riker, who was vice president of technology at Microsoft and responsible for “wearable technologies.” A lot of what he did sounded like science fiction, but what he was testing has now become part of our daily lives.

In that vein, every year we conduct a session that we call The Next Wave Interview at ILM. Mike Liebhold, senior researcher at The Institute for the Future, was kind enough to take a break from a conference his organization was running on “Blended Realities,” or how our ordinary lives are becoming increasingly digital, to share some of his thoughts on the future. Liebhold has a biography that could easily fill two full columns in The New York Times. He has been a researcher at Intel Labs, developed large-scale IT services and IP networks for rural and remote regions of the world, been a senior consulting architect at Netscape, served as chief technology officer for Times Mirror publishing and a senior scientist for Apple Computer, essentially serving as John Scully’s right-hand man for technology.

The Institute for the Future is a 40-year-old not-for-profit organization spun off from the Rand Corp., and Liebhold’s job is to study the impact of communications on society. He helps enterprises think systematically about the future. “I don’t spend much time on what’s happening today; I tend to look out at what will be available in five years.”

In his discussion with conference organizer Peter Krasilovsky, Liebhold went on to say that we are becoming an urban planet — soon 50 percent of the population will live in a city. We are passing through a very important inflection or tipping point where phones aren’t just phones, they are computers. (During ILM, we heard several speakers say that the iPhone was a game-changer, and Michael Boland held a fascinating session on local iPhone demos.) Prices on smartphones are coming down … Liebhold said there are some subsidized smart mobile phones available for $79. As a result, he predicts “in five years, everyone will be able to afford a mobile computer.”

What is of equal importance is the opening of the mobile Web. Today the carriers still control the networks, but these “walled gardens” will fade fast. Liebhold is a strong proponent of open systems, and he believes it is just a matter of time before “our environments are going to talk to us.” He said that in most every talk he gives that kind of statement makes people nervous about privacy, but he cautioned that location tracking has to be done on an opt-in basis, and he believes that people will opt in. An important element of this is geoRSS. This is a grass-roots development of location-based data that most major companies have adopted as a standard to make sure it works across the board.

It appears that Riker’s wearable technology is fast upon us and Liebhold underscored the theme of Interactive Local Media 2008: Extending Local Channels.

France Telecom is finally pulling the plug on the 26-year-old Minitel service, which it launched in France in 1982. (Actually, Minitel is really 15 years older than that according to SEC filings: “Under an advertising sales agreement entered into in 1967, France Telecom granted PagesJaunes exclusive rights to canvas and collate the advertising to be incorporated within the telephone directory and the alphabetically classified Minitel service.”) Minitel was to replace the White Pages, but not the Yellow Pages.

According to Wikipedia, France Telecom estimated that almost 9 million terminals had access to the Minitel network at the end of 1999 and it was used by 45 percent of the French population. Originally Minitel was seen as a model for mass deployment of interactive terminals and electronic services. The first 4.5 million terminals were provided at no cost as incentive to use a nationwide, electronic telephone directory. They then started to add a variety of interactive services to allow users to shop for retail products and transportation services, as well as access databases, information services and message boards.

In 1992, Donald Mackenzie, president of Nynex Information Resources Co. (Yellow Pages for New York and New England), told The Kelsey Report, “My view is that now Minitel is online and I want to ask my brethren in the directory business if they would like to share the information and the costs to develop it into a national Yellow Pages product in the U.S.” At the same time, other RBOCs and independent companies were evaluating electronic delivery of information, but no one in the U.S. anticipated replacing the print product with an electronic product. US WEST adopted Minitel to buy into its electronic directory services as a backbone to its videotex application.

By 1997, Minitel had peaked as the Internet provided a more robust platform. Minitel users, not unlike the people who are addicted to a soap opera, resisted fiercely because they thought, in part, that Minitel was their own. The service was judged to be a success in terms of accomplishing several of France Telecom’s objectives, even though it was not a business model that could be transferred to other countries. Today, according to France Telecom’s most recent quarterly report, Minitel revenues totaled only 4.5 million euros in the first half of 2008, down 69.4 percent compared with the first half of 2007.

The electronic information services industry owes a great deal to Minitel. May it rest in peace when it is discontinued at the end of March 2009.