Over the past several months, The Kelsey Group has been talking with a number of sales managers and directors of companies in the directory, newspaper and online space to understand the challenges of recruiting, hiring and training online reps. The sense from our interviews is that the market for skilled reps who understand and have sold online products with success is extremely competitive. We have heard stories of companies paying “signing bonuses” as well as increasing base salaries with attractive commission structures to attract skilled reps away from their current employers. 

Many local media companies have resigned themselves to finding sales reps who understand and appreciate the value of online products and services and training them to become skilled online reps. Many sales reps see the value of acquiring online sales experience as a means of building a sales career in the hottest new media category that they could eventually leverage into higher paying positions. 

A recent New Zealand Herald interview with Greg Murphy of Yellow Pages Group New Zealand demonstrates this challenge and reflects many of the same issues we have heard from other publishers and local media companies.

According to Murphy:

“The goal when recruiting reps is not to rely on their understanding of the online world, but to balance that with professional selling skills and a clear understanding of the challenges a small business faces. A large proportion of New Zealand businesses are small, and often the owner is also the person who markets the business. The owner won’t want to deal with a whizzed-up propeller head – that person needs to be given explanations in how online fits into his or her business. So, in short [we need] good technical skills and the ability to communicate in a business-like way.” 

One of the critical skills identified by all the local media companies we talked with was the ability to be consultative about how online works with other media and to be able to clearly and simply educate small business on how online marketing works and what value it delivers for their particular business. Murphy’s comments echoed this: “The person selling the advertising needs to explain to a businessperson how online advertising will work for his/her business. Business acumen is the key. There are agency customers to communicate with too — these people expect salespeople to be professional.” 

The challenge with most local media companies is finding that group of sales candidates who show potential by exhibiting a comfortable knowledge of online products and have some demonstrated sales skill. The goal then is to train these candidates to consultatively sell online solutions either as a stand-alone product or in conjunction with their traditional media product as a bundled solution. The challenge of finding and developing reps skilled in selling online and multi-product solutions will continue to shape local media as they transform themselves from single product entities to multichannel local media companies.   

TKG has learned that local online industry veteran Mark Canon has accepted the position of president-new media at Yell, the U.K.’s leading directory publisher. He will start in July and take over for the retiring Eddie Cheng.

Canon brings a varied background to Yell, having been an Internet Yellow Pages pioneer at Switchboard, with subsequent stints at AOL and Autobytel. He offers a sharp intellect and the kind of insight that only comes from long experience in building compelling local search experiences.

Canon’s recent stint at Autobytel in particular rounds out his experience to include a deep understanding of how vertical search has become such a critical trend in the directional media space.

At Yell, Canon will find an online operation that has experienced stunning recent sales growth but needs strong leadership to make sure product development keeps pace with a very competitive U.K. online market.

Update (6/27/08): Yell formally announced Canon’s appointment today. Here is the press release.

Yellow Pages Group New Zealand has announced the debut of “Yellow mobile” on the Telecom and Vodafone Live! networks. 

According to New Zealand’s Business to Business magazine:

“Yellow Pages Group Digital Media Director Blair Glubb said Yellow mobile will complement the company’s existing range of advertising solutions which already cover the print, online and voice (via the 018 and 0172 directory assistance services) channels. ‘Yellow mobile will help businesses connect with the huge numbers of New Zealanders who want to find businesses and their products and services while they’re on the go. This is a big step towards our vision of reaching every New Zealander every day.’ ” 

While YPG-NZ could have gone with a more sophisticated approach, it has opted for a simple application that provides users with flexibility in how they want to interact with Yellow mobile.

“By texting a keyword, category or business name and a location to 018, subscribers will automatically receive a text message with contact details of the business most relevant to their search criteria. For example ‘Café Valentino. Christchurch’ or ‘Plumbers, Ellerslie.’

“As well as containing contact details for the business, the return text message will also include a link to a full set of search results on the Yellow mobile WAP portal (a WAP capable handset is required to use the link).” 

With a high penetration of mobile users, New Zealand is an ideal location for mobile local services. Mobile was an area lacking in YPG-NZ’s portfolio and was a stumbling block to its goal of reaching “every New Zealander every day.” The key to the success of this venture will certainly be in selling existing advertisers onto the mobile platform with incremental investment.  

There has not been all that much fresh coverage of the rumor, reported earlier this week, that Microsoft may acquire Yell Group, the U.K.-based international publisher with operations in the United Kingdom, the United States, Spain and Latin America. We have not been able to pick up much to support the rumor, though circumstances might suggest that Yell is poised to make some kind of significant move to generate cash without further driving down its share price. The company took a hit after it announced its earnings last week (along with a dividend cut), and gained a little back on the Microsoft rumor. At this writing, the stock is trading down by about 2 percent.

Here is a bit more discussion on ClickZ regarding the rumor that Microsoft may acquire Yell. The focus here is on Yellowbook.com, which has been a second tier player in the U.S. IYP space, but has recently revamped and is growing usage rapidly, albeit from a small base. One key difference is the veteran leadership of Pat Marshall, who helped found Superpages.com back in the IYP pioneer days, and joined Yell last year to lead efforts to make Yellowbook.com a more competitive digital platform.

This article reports on a recent BNP Paribas report that suggests Yell might sell off its U.S. and Latin American operations (with Carlos Slim’s Telmex being the likely buyer of the latter) to avoid violating debt covenants. No mention is made of the prospects of a Microsoft acquisition.

This article reveals, ironically enough, that Yell and Microsoft were both voted into the top 10 U.K. companies to work for.

Sensis has announced the offering of online auctions on its Trading Post Web site. According to an article in The Sydney Morning Herald: “some two million people already use the www.tradingpost.com.au site to buy and sell goods and services. The company now aims to attract a share of the additional 3.4 million Australians using online auction facilities. ‘Sensis has taken decisive steps to return our classifieds business to growth,’ ” said Bruce Akhurst, Sensis’ chief executive officer.

One of the key issues prompting the launch was eBay’s decision to require use of its PayPal system rather than allowing other forms of payment. “Trading Post has been listening closely and is now providing auctions with a broad range of payment options for sellers to choose from. We’ve also made it easier to register, buy, sell, navigate, search and compare products online,” said Akhurst.

EBay has enjoyed exceptional growth and success in Australia owning 42.2 percent of the online shopping and classified marketplace compared with Trading Post’s 2.12 percent, as reported by Hitwise. Sensis has made a significant investment in the new online auction business, adding phone and e-mail based customer service, a mobile version for Telstra users, side-by-side comparison options and 524 categories. The site is powered Intershop and the FAST platform.

The mashing up of classifieds with directories and other directional media, such as eBay, is a logical path for Sensis as online auctions are another way to bring together buyers and sellers. To maximize its opportunity, Sensis will not charge for listings but will extract a fee when the product is sold giving it a piece of every transaction. Monetizing the transactional aspect of directional media has been a goal of most every directory publisher.

Sensis’ Trading Post property has had less than stellar results, so the move into online auctions with a purely Australian focus (sellers must reside in Australia) is a wise one. Increasing its classified market share while creating a new revenue stream will help push Sensis toward its 2011 target of A$3 billion.

An innovative bar code technology, QR Codes, first developed in Japan by Denso-Wave has been introduced in Singapore by Singapore Press Holdings. Branded as ZapCodes, the two-dimensional bar codes enable mobile phones equipped with cameras and special software to download information or link users to Web sites for more information. According to the Straits Times: 

“ZapCodes add an interactive element, a new dimension, if you will, to 2-D advertising. They pack more value into your print advertisements. They open up a whole new vista,’ said Singapore Press Holdings (SPH) marketing executive vice-president Leslie Fong. ZapCode allows users to simply point their mobile phone cameras at a ZapCode icon and click. When installed on a mobile phone or PDA, the software reads and deciphers the ZapCode and triggers the sending of data back to the mobile device. The data, in the form of a WAP (URL) site, may contain extra information and pictures, vouchers, music and even videos. 

Having experienced this same technology while in Japan, I saw firsthand how this technology has the potential to drive traffic and usage to both the online and print versions of the directory. One of the executives I was working with needed information about a restaurant and saw the directory ad had a QR code. With a snapshot from his mobile phone camera, he was able to quickly download the pertinent contact information and store it in his address book. 

In the United States, this technology has been used primarily for product data, replacing outdated simple bar code technology. Japan and Singapore, however, clearly recognize its wider marketing potential. According to eMarketer, more than 60 percent of U.S. mobile phones have built-in cameras, providing a solid base of potential customers who could use the QR code technology. 

If a critical mass of QR codes could be driven into Yellow Page directories, it would represent the largest collection of QR codes in one place, adding another level of relevance and usefulness to the print directory. Utilizing QR codes in the print book would drive traffic to Internet Yellow Pages and profile pages that provide more information, online coupons and video, thus driving consumer interest in contacting and purchasing products and services.   

Denver-based Local Matters announced a major deal with European Directories “whereby Local Matters will develop and enhance the online white and yellow pages websites across European Directories’ 8-country publishing operations,” according to the press release issued today.

European Directories is a London-based, private-equity-owned publishing holding company with operations in Austria, the Czech Republic, Denmark, Finland, the Netherlands, Poland, Slovakia and Sweden.

TKG has learned that European Directories has already developed the Local Matters “Local Mosaic” platform in Finland (www.02.fi) and will roll it out across the remaining seven markets over the next 12 to 18 months.

This morning, TKG spoke with European Directories’ Simon Greenman (MD-online), who said a key advantage of moving from multiple platforms to a common platform is that “We get scale from our online investment. We will be able to build it once and deploy it eight times.” Greenman adds that this will greatly increase ED’s pace of product development and speed to market.

In an e-mail exchange following the announcement, Local Matters CEO Perry Evans noted that in general, the online directory market in Europe is advancing at a rapid pace right now. Much of what is happening involves taking things proven out in competitive U.S. search markets and applying them in Europe, offering a first mover advantage in many instances. An example is the map-based search implemented in Finland via the new 02.fi platform.

Evans also made an observation shared by TKG, which is that many European publishers are in stronger competitive positions online than the leading U.S. directory companies.

“Most countries have in market positions in the top 10 traffic sites to begin with, and have advanced to online revenues of 20 percent to 25 percent of total media revenues. This gives them a much stronger point of leverage for growth than their U.S. counterparts.”

Evans cited the following as key “themes of advancement” in the European directory market:

• Integrated Approaches to SEO/SEM. “Combining their website traffic and advertising distribution models.”
  
• Social Media. “Expanding on and beyond ratings/reviews into new models of engagement.”
• Vertical Search. “There is a lot of interest in leveraging ‘mash-up’ approaches to extend media reach into specialty publications. Most European countries are less populated with competing city guides or vertical market guides or (occasionally) even consumer mapping sites, so there is more of a ‘green field’ opportunity.”

Thomson Directories owner Seat Pagine Gialle has put the U.K. directory publishing group up for sale, according to an article in the Times Online. 

According to the article: “Thomson, which has been hit by competition from the web and reduced spending by financial clients, is expected to achieve earnings of £25m this year and could change hands for £100m.”

Given that Thomson is viewed by many as the third player in the crowded U.K. directory market, it is unclear who will step in as a buyer. Over the years Thomson has received sporadic support from its financial owners leading to a high turnover rate of its executive management team as well as uneven performance in the U.K. market. 

When British Telecom was deciding to re-enter the market as a directory publisher, it was widely speculated that the company was considering purchasing Thomson as a means of competing more effectively with Yell by leveraging a known brand and an established operating unit in the marketplace. Given the relative affordability of the Thomson property, BT Directories could be one of the likely suitors along with other private equity groups. 

Seat also announced it will sell off its German assets and some of its Web properties so it can concentrate on its home market as well as its fledgling Turkish operation.    

U.K. directory publisher Yell has launched a new Web site designed to help agencies and media buyers evaluate its multichannel products. Yell additionally has dedicated a team of specialists to work directly with agencies. Large accounts are widely viewed as a channeling segment for Yellow Pages publishers, and more tools and resources need to be devoted to this segment to make a better case that the full suite of directory products offers good value to large, national accounts.

Here are some details from the press release:

Yell media are used over one billion times a year by 87% of the UK population* and deliver wide-reaching advertising opportunities for ever brand, media need and budget. A variety of packages spanning print, online and mobile are available with options including sponsored SMS, online banners, PPC keyword ads and classification sponsorship.

“We think this will become a vital agency resource,” said Jason Smith, head of advertiser development at Yell. “We know that over half of the people who contact a business through a Yell product go on to make a purchase.

Therefore our audience is ‘ready-to-buy’ which offers a huge opportunity for brands.”

The newly created team offers a fully managed service via a single dedicated point of contact, meaning consistency of approach and ease of communication. They will also offer a range of value-added services including consumer survey TGI, Mosaic profiling, mapping and response analysis.

Jason said: “The development of a bespoke portal and agency team is a natural step to provide the best possible service for media agencies to help them find the right Yell product that will give any brand great return on investment. This offers particular benefits to agencies with high-volume needs and further raises our profile among agencies and brands.”

Yell will be engaging directly with media agencies over the next few weeks and launching a B2B advertising and promotional campaign created by Proximity London to communicate fully the offer to the media planning and buying community.

Alibaba, is China’s answer to Google and Yahoo!. The online site is 39 percent owned by Yahoo and recently entered a strategic partnership with Infomedia, the second-largest Yellow Pages publisher in India.

The agreement with Infomedia provides Alibaba access to the second-largest population in Asia. The deal with Infomedia opens the opportunity to sell online advertising to its more than 750,000 advertisers and leverages Infomedia’s sales force of 650 that can immediately begin to access a wider array of India’s SMB base.

According to The Wall Street Journal, “[Alibaba’s] move into India is part of its strategy to grow globally, as a large chunk of its revenue comes from domestic trade listings within China.”

As Google, Yahoo! and MSN continue to struggle in Asia and China in particular, homegrown Alibaba and Baidu continue to prosper in Asia. By tapping into population-dense countries, both Alibaba and Baidu have set themselves up for tremendous growth as both China and India’s middle class grows at exponential rates followed closely by the rapid adoption of broadband, mobile Web access and more stable business environments.