Elizabeth Gage of PCM International posted a well thought out blog on the challenges small and medium-sized businesses face when purchasing search engine marketing campaigns, either on their own or through Yellow Page publishers. After reading her thoughts on the subject, I couldn’t help but realize that the focus of current SEM efforts has been on getting the appointment and making the sale. Gage’s post, however, highlights the challenges after the sale is made.  

As more SMBs begin to experiment with online advertising, the problem of supporting and informing them of the progress of their online campaigns increases. Based on my own experience in the back-office side of supporting SEM sales, I can attest that new online advertisers simply require more communication on how their campaign is working, numbers of calls generated, how to effectively improve keyword performance, and how best to update their profile or Web site to generate more leads. New online advertisers are in the experimental mode and are not yet sold on the value of SEM, which requires constant reinforcement of the ongoing value delivered by online advertising.  

While gaining appointments and educating SMBs on the benefits of online advertising is important in selling SEM, continually communicating the value of what is being delivered is what will help maintain SMB online advertisers. Failing to reinforce the value to new SEM advertisers ultimately leads to higher advertiser turnover in the second or third year, meaning the sales force will have to continually replace advertisers with more new advertisers rather than work on developing existing advertiser campaigns. 

The Yellow Pages Today April workshop featured a divergent view of how best to sell the White Page product line. While some differences exist, due in part to the products offered in the core White Pages product such as those published in Germany, most companies agreed that White Pages needs its own unique sales approach and marketing focus.  The real difference lies in the publisher’s view of White Pages as a major revenue component, a supplemental revenue component or a complement to the core Yellow Pages product. For those with a view of White Pages as a revenue driver, major product development and sales training have focused specifically on the unique aspects of what White Pages offers advertisers and the product sets that are particularly attractive.  

Vincent Thibaut, print product manager for Truvo Belgium, pointed out that White Pages is often overlooked as a vehicle for attracting new business. As consumers are given recommendations of businesses or products or are exposed to them on other media, they often turn to White Pages online or in print to get the contact information. Thibaut also supported the idea that salespeople need to outline the unique benefits of White Pages to ensure advertisers clearly understand what they are buying.  

Sensis has taken a renewed interest in building its White Pages product that has centered on retraining and refocusing White Pages salespeople on the value of the product, since it is a different sales proposition that is less reliant upon size and position. The renewed approach seems to be paying off, delivering 10 percent growth in the first half of 2008.   

The focus of the Yellow Pages Today April workshop was on White Pages with the underlying theme of how the product can survive and the regulatory environment that will either help or hinder its growth or decline.

The opening session with Stephanie Verilhac, EADP EU affairs officer, covered the current state of the EU privacy directives as well as the upcoming 2007 Telecom Review. The core message is that several of the EU states have fulfilled the goal of opening up competition and have been omitted from the 2002 regulations while seven countries will remain under regulation until competition advances to an acceptable level. The privacy regulations continue to affect the major online portals, which must turn to partners like Yellow Pages publishers to gain access to local databases or build their own.

Following Verilhac was Claude Merchand from PagesJaunes who spoke from a publisher perspective on how the EU directives and regulations are affecting his organization. One of the key challenges is the relationship PagesJaunes has with France Telecom in what content to include in the book and how to structure the revenue agreements. Merchand sees a day when it might be possible to operate separately from the telecom in delivering a Universal White Pages.

Up next was Dolf Weiler, marketing director for De Telefoongids, who pointed out that White Pages is no longer just print and that his organization is actively investing in broadening the White Pages portfolio. Weiler said as long as publishers are willing to invest in and experiment with White Pages, it can continue to be successful. One key sales point he made was that 25 percent of the population in the Netherlands does not use online to look up local business information, which means WP is better suited to reach the majority of the buying audience since it has print, online and mobile products that reach nearly 100 percent of the population.

One dilemma pointed out in the presentation is that people want to be able to find any person or business but are reluctant to provide their own personal or business data, which makes the completeness of the database a continual challenge. When talking about the notion of sharing data with mojor portals such as Google and MSN, Weiler warned, “Be wary of handing the crown jewels to your greatest competitor.”

Via video conference, John Hillrich of Idearc shared his company’s strategy of expanding the WP concept to include direct mail and a new mover product called Solutions on the Move. While not a major revenue driver for Idearc at 4 percent of revenue, it remains a valuable product to leverage additional AVO to lift overall spend.

The final presentation of the morning was from Sensis’ Melissa Reynolds and Geoff Hoffmann, who outlined the publisher’s energized strategy toward White Pages that led to an unprecedented 10.3 percent gain in the first half of 2008. One of their key points was the new focus Sensis has had on developing a sales process and differentiating the White Pages product from the major portals. The publisher has zeroed in on the consumers need for information in the White Page products and how that can lead to product innovation and increased usage and sales.

I’ve spent quite a bit of time over the Easter holiday talking with friends and family about the economy and how they are dealing with the budget crunch we are all experiencing. One of the common threads of all these conversations has been the need to stay close to home, combine shopping trips and call ahead so you don’t waste time and fuel going to multiple stores. 

More and more people are scaling back vacations and long car rides to try to save money. The next logical question is how people are adapting to this need to stay close to home and make every trip more efficient. Many of my friends and family admitted to using the print and online Yellow Pages more frequently as well as local search engines such as Google, Yahoo! and Citysearch because of the mapping features and more detailed information about the stores they were searching for. One friend admitted that if the ad or online profile page content was not specific enough, they moved on, which shows how valuable content is in driving leads. 

Almost everyone I spoke with was calling stores more often to check on availability, price and specific location before they left the house so they had a better plan of where to shop and how best to combine trips. One family member was even reserving merchandise on the phone so they could just pick it up to save even more time. Mapping, it turns out, is becoming a key advantage for online sites as was location specific information and maps in print. 

What does all this mean to Yellow Pages? If the trend is toward more local shopping and the need for directions, local business information and local contact information, then directional media such as Yellow Pages and local search are best suited to address these changing consumer behaviors. These suspicions were confirmed by a more scientific study conducted by Vertis Communications that focused on changing buying habits of grocery shoppers. The study echoes my less than scientific conclusions.

“Economic factors, such as gas prices and the housing market, are changing shoppers’ habits drastically,” says Scott Marden, director of marketing research at the Baltimore-based Vertis. “More than 90% are affected, and many are shopping closer to home, stocking up more and combining shopping trips.” 

Perhaps there is a silver lining for Yellow Pages and other local media in this new economic environment if they can get their reps tuned into this new phenomenon and effectively communicate the opportunity to local business owners.

Norwegian-owned Interinfo was purchased by BaltCap, the leading private equity investor in the Baltic states. Interinfo represented the last directory holding of Texas Pacific Group, previous owners of Norway’s Findexa, now owned by Eniro. Terms of the deal were not disclosed. 

Interinfo’s Yellow Pages operating properties are located in Lithuania, Estonia and Latvia with an estimated annual turnover of 15.5 million euros in 2007.

According to Simonas Gustainis, partner of BaltCap: “The Interinfo group of companies has a strong position on the Baltic advertising markets, especially for local services. We look forward to working together with the strong management team to continuously improve the products and services of the Group. Interinfo with its highly trained sales team, comprehensive databases and strong brands will be in an excellent position to continue as the leading information provider in the Baltics.”

Peeter Saks, managing partner of BaltCap, went on to say, “We believe the advertising and information directories sector has a great growth potential in the Baltics and look forward to being a part of this via our investment in Interinfo.” 

It is not clear if CEO Magnus Sonnorp will continue in his role with the company. Sonnorp became part of the management team when Findexa was acquired by Texas Pacific Group and later became group CEO of Interinfo.   

It was interesting to see the Yellow Pages Association release its usage data showing print usage was stable at 13.4 billion and IYP usage had increased to 3.8 billion in 2007. While the overall usage figure is a 3 percent increase from 2006, which is encouraging, zeroing in solely on usage may be taking away from stronger measures of value. Just as online has shifted from a focus purely on clicks to a broader definition of value based on calls and leads, the Yellow Pages industry should follow this lead in marketing the medium.

The value of a Yellow Pages ad to a local small-business owner is not the movement in the usage number but in the number of consistent leads its advertising program delivers. Keeping this in mind, Yellow Pages continues to have a strong story to tell. Recent research by the YPA reveals significant local display ROI for some of its higher usage headings, which has remained relatively stable in most cases over the past three years.

Source: Yellow Pages Association (2008)

Building on the ROI figures, the number of calls generated by both print and IYP continues to support the health of a massive number of small and medium-sized businesses. According to CRM Associates, a typical business receives more than 800 calls per year per display ad with a cost per buyer influenced figure of $10. These are the numbers SMBs really care about, and arguably these are the metrics the industry and its investors should be focusing on.

If the industry continues to enhance the value of the leads it generates on behalf of its advertisers and focuses on ways to demonstrate the value of what the Yellow Pages medium delivers to consumers, it will continue to be a valuable and relevant medium for local advertisers. In a down economy, SMBs tend to stay with their most stable lead generation source if they are to weather the economic storm.

Smart SMB advertisers already understand this and also understand that this is a time when they can advance their position versus their competitors, which may choose to cut back on advertising. Smart Yellow Pages companies will work to promote the value of ready-to-buy leads, train their salespeople to consistently present this message, and support the value the Yellow Pages product delivers to consumers. Those Yellow Pages companies that follow this route will also be in a stronger position to weather the advertising downturn already well under way.

At the end of the day, all a small-business advertiser wants is a consistent source of quality leads from its advertising investment, and all consumers want is a medium that provides a comprehensive database of local content to make buying decisions easier. It’s all about influencing leads to come to the medium and delivering quality leads to help SMB businesses remain successful.

As I noted in a blog about The Kelsey Group’s Local Online Media event in London last week, analysts, speakers and the audience were positively upbeat about the Yellow Pages business. The feeling by all was that the stock market has overreacted to some negative information about Yellow Pages. This has been exacerbated by bloggers and journalists, most of whom spend all day at their computers or on their Blackberries and wouldn’t want to admit doing something as old school as looking up a business in the printed Yellow Pages.

The Yellow Pages Association published its new 2007 usage data yesterday that says print directory usage was stable in 2007 and online directory references climbed 15 percent, so that overall there was a 3 percent increase in U.S. directory lookups. My guess is that the numbers are similar in other countries, only the online component most likely grew even faster than it did in the United States. As my colleague Charles Laughlin commented in his blog on the YPA numbers, “the fact that online is growing gives publishers a good story to tell, assuming advertisers, investors, the media and other audiences are receptive to the multi-channel argument.”

Cornel Riklin, CEO of European Directories, asked at our London conference what the industry can do to improve its perception among both advertisers and consumers. The Kelsey Group believes in the increasing importance of public relations, in particular press releases. SES London keynote speaker Fred Marckini, chief global search officer for Isobar, made the case that press releases will play an increasingly important role in the search world as video, social networking and the growth of universal search can make a story reach a huge number of people and have a long shelf life.

The worldwide Yellow Pages industry has a compelling value story to tell. But publishers won’t get that message across piecemeal — company by company, even country by country — in an increasingly global world. And they don’t have the money to do it in an advertising or promotional campaign. In my view, the solution is through an organized public relations effort that uses the growing power of universal search. The industry needs to revisit the concept of working together to put up a united front about the benefit to consumers and advertisers of print and Internet Yellow Pages.

This is not a complicated message. It can be done with leadership. The industry needs to counter the messages of journalists, bloggers and commentators who are too quick to dismiss Yellow Pages as a dinosaur based on little evidence beyond their own habits for finding information on local businesses.

As Charles Laughlin wrote, “Publishers can affect the outcome by investing in their products, maximizing their visibility and content and improving distribution.” In their own territories, Yellow Pages publishers should fight for every advertiser, encourage usage, and compete wherever and however necessary.

But the worldwide industry needs to use an old tool (public relations) in a new vehicle (next generation Web search) to reach a broad market. Otherwise, the false perception that revenue migration is moving from print to Internet overnight could become reality.

This is a serious and urgent issue. A unified offense is a better course than a disorganized (or nonexistent) defense. It is time for the global Yellow Pages industry to fight back.

Nearly 100 executives in The Kelsey Group community participated in a half-day session that we hosted in London titled Local Online Media. The panel I moderated was “The Financial Future of Directories and Local Search in Europe.” The panelists were Paul Gooden, equity analyst, ABN AMRO, and Paul Kuipers, director, media and telecom corporate finance, BNP Paribas. (As an investment banker, Paul has been involved in the KKR acquisition of PagesJaunes, the sale of TPI to Yell, as well as the Infote and European Directories transactions.)

I didn’t expect either the analyst or the banker to be all doom and gloom about the business, but I did not expect them to be as upbeat as they were either. Both felt the stock market has overreacted to a few pieces of negative information about Yellow Pages. They also believed that following the challenges of the debt market, we will see a resumption in Yellow Pages consolidation.

My colleagues Matt Booth and Charles Laughlin started the day with a number of slides from our new Annual Forecast “2007-2012: Outlook for Directional and Interactive Advertising.” One of the most important slides to our European audience is the following:

The Kelsey Group believes the total directional advertising (print and Internet Yellow Pages and local search) in Europe will grow from US$10.8 billion in 2007 to US$14.2 billion in 2012. Note that the print decline is a CAGR of only 1.2 percent, which is more than made up for in the very strong growth of both Internet Yellow Pages and local search. The obvious question is what companies will take this revenue?

In an executive interview at our London event, Andrew Day, CEO of Truvo (formerly World Directories), put it best: “Publishers need to see the new media upside as greater than the print media downside. Anyone who doesn’t believe that will fail.” In Europe, the urgency for action is even more imperative than in other parts of the world because Google’s share of the search market exceeds 90 percent.

The closing session discussed some of the themes of the day and came back again to the belief by the local search and Yellow Pages executives about the future of the business. From the audience Cornel Riklin, CEO of European Directories, asked what the industry can do to improve its perception among both advertisers and consumers. We will discuss this on Monday.

According to a recent Direct Marketing Association survey, “The absence of a brick-and-mortar store is becoming prevalent among retailers, since 41 percent of survey respondents don’t have a physical store.” This is quite a surprising finding and certainly has significant ramifications for local media sales representatives who continue to identify and pursue new business opportunities.  

In the past, Yellow Pages sales reps were assured they would be able to locate new businesses simply by the fact that they would sign up for telephone service and provide their physical brick-and-mortar address. If the 41 percent number is accurate, it shows how difficult it can be for local sales reps to identify and sell to these virtual retail locations. This situation is challenged further when the virtual business lacks a business line that would place the advertiser in the local area or the online business prefers online communication only and does not desire any phone calls to their offices.  

If increasing numbers of retailers are “going virtual” and giving up their brick-and-mortar locations, it seems to further push the balance of local marketing toward online media since this is where they are actively seeking customers. The question becomes what strategies are being developed to identify and sell to these unique “local” customers. Traditional sales prospecting methods need to be adapted to address local online retailers and the sales message and communication of value certainly needs to be different for the YP product set.  

Coming up in 2008 we will be examining how online media is being sold and how business prospects are being identified and approached to see what new strategies and best practices are emerging to address a retail world increasingly doing business online.    

OK, so I’m on a Web 2.0 kick. I guess I’ve made it my New Year’s resolution to get more publishers and local search companies thinking about the broader meaning and business opportunities Web 2.0 presents beyond consumer reviews and online video.

I came across a terrific post from LDPodcast. While not a business-focused Web site, it provided some very enlightened ideas on how sites can better generate timely, relevant and desirable content while engaging consumers in a meaningful way. Some of the ideas put forth (with my own local search spin) include:

Offer tools that allow advertisers to produce webcasts. Webcasts are like live mini radio talk shows where 20 to 30 minutes of content can be shared with the ability to answer questions on a specific topic or area of concern. Companies like Webex or Blog Talk Radio provide excellent tools to make this service possible. Imagine housing webcast shows on timely topics such as buying a car, how to remodel a bathroom, tax advice, wedding planning and more on your local site. Allowing advertisers to produce these, offering a way to promote the webcast and linking a library of past shows to their profile page or listing would add quality local editorial content to a site.

Include tools to create and post podcasts. Podcasts are generally short-format audio or video segments that can cover specific topics, provide step-by-step instructions for common tasks or answer commonly asked questions. Services like Audioblog and Clickcaster offer simple, easy-to-use online podcast tools. Advertisers could use these to simplify their customer service handling, provide education so consumers would be less intimidated about using their products or services, or enhance an advertiser’s perception as a local expert. Again, providing a way to promote the availability of advertiser podcasts and then linking them to the advertisers’ profile page or listing not only adds value for the advertiser but also adds quality content to the site.

Provide common forms and instructions. Allowing advertisers to place forms and documents is a value added service. Rather than having to spend time at the doctor’s office filling out forms, consumers could go to their listing or profile page and download the forms to save time. Insurance agents could have application forms available, employers could post job application forms, and process instructions could be added to help prepare consumers for appointments.

Offer online scheduling. Offering advertisers applications that allow for online scheduling as well as developing a calendar system where common tasks and purchases could be scheduled would be valuable to both advertisers and consumers. Consumers could book pizza Fridays, oil changes, dry cleaning appointments, haircuts and many other tasks on a calendar system that would then push valuable offers to them a few days or weeks in advance. And offering the ability to schedule appointments all in one place is a very engaging way to generate leads and book business.

Web 2.0 is about engaging consumers in a more personal and useful way, while local search is about relevant local content and a means for linking local buyers and sellers. The ideas above provide the best of both worlds — additional services that could be monetized by publishers and local search sites, the development of quality local advertiser content that can be picked up by search engines, and real consumer value in the form of education and enhanced customer service. Let’s resolve to make this a Web 2.0 year.