Leaders of the U.S. independent directory publishing industry were passionate in their defense of print media at this morning’s opening session of the Association of Directory Publishers meeting outside Houston, Texas. Jim Hail, the outgoing chair and head of Idaho-based Hagadone Directories, declared “Print is not dead!” He argued that the industry has become too apologetic about print and should take a much bolder posture in defending it in the media, where it continues to take a pretty vicious beating.

To bolster his point, Hail held up a recent Wall Street Journal article that details an effort by the magazine industry to embrace the “power of print.” Rather than accept its demise to digital, the magazine industry decided to run a campaign that basically says, at least where magazines are concerned, the print experience is superior. One tagline example, “The Internet is fleeting. Magazines are immersive.”

Hail was not impressed so much by the “esoteric” messaging but by the gumption the magazine industry has shown by saying, in effect, our old product is awesome, so deal with it. He wants the Yellow Pages industry to do the same thing.

“We need a consortium of publishers for an ad campaign … to tout the inherent strength of our medium,” Hail said.

Of course, Hail is aware that this call has been made many times before and never executed successfully. Joe Walsh, speaking after Hail, offered a somewhat different take. He said that while he has always favored a Yellow Pages version of the “Got Milk” campaign, he thinks it is “too late now” for any such effort to be effective.

He says the sense of print Yellow Pages as a passe medium has been fully baked into the public consciousness, “and we may not be able to reverse it.” Plus, he says there is no appetite among the major publishers to fund any such effort.

That said, Walsh sees some modest signs of improvement in the performance of Yellow Pages. He says his internal metrics show growing print usage, which he ascribes to an improving economy.

I finally got around to viewing Yellowbook CEO Joe Walsh’s recent appearance on FoxBusinessNetwork. The line of questioning presumed the obsolescence of print, which Walsh certainly anticipated. He made a few assertions that one might expect — that people still use phone books, despite what you might think, and that Yellowbook has been responsive to environmental concerns, with smaller books and opt out and so on.

He also said a couple of things that were kind of interesting. He made a distinction not based on big versus small markets, but rather coastal versus heartland. Asked if phone books would still be around in five years, he said “Yes,” but added that in some coastal markets, the migration from print to digital usage might be completed within five years. In smaller markets in South Dakota, Mississippi and so on, print is strong today and will likely still be strong in five years. And when asked what his biggest seller is today, his answer without hesitation was “Web sites.” Click here or on the image below to watch the interview in its entirety.

It’s nearing the end of earnings season for the global Yellow Pages industry, and my program, The Kelsey Report, will soon issue a detailed roundup of 2009 results across all the companies that report publicly.

In general, the news has been grim for print Yellow Pages, though some publishers have given faint glimmers of hope that print will stabilize this year, meaning a slowing rate of decline. Others are projecting an accelerating decline.

A recent (unscientific) Kelsey Report online survey of global YP industry insiders suggests that most in the industry see a strong secular component in recent revenue performance. Probably the most telling messages that has come out of some recent conversations I have had with leaders in the industry is that the continuing, if waning, effectiveness of print is an increasingly irrelevant point. The energy it takes to overcome objections to print can be more effectively directed to selling digital or a product bundle that emphasizes digital.

Ironically, I am hearing more and more that print may be necessary to making the bundle effective because it still drives leads, but it is poisonous to the messaging because no one believes it works. I am hearing more and more about strategies that essentially engineer a faster print-to-online shift because the investment story for a company focused on the local online opportunity is so much more compelling than a traditional media story.

So the big question is, does the industry have a viable plan to become a growing, profitable business in a post-print world? And how will organizations need to change to make economic sense in a world where the product mix is substantially different from what it is today?

These are some of the questions we’ll take a whack at in a workshop we’ll be conducting at the Yellow Pages Association’s conference next month in Las Vegas, and in much greater depth at BIA/Kelsey’s Directional Media Strategies conference in Dallas, Sept. 14-16. The workshop at the YPA event is titled, perhaps hopefully, “Built to Last: The new Yellow Pages Organization.”

My colleague Mike Boland will also have a prominent role at the YPA event, moderating a panel on “Monetizing Mobile Yellow Pages,” which is also the topic of an upcoming joint report from BIA/Kelsey’s Mobile Local Media and Kelsey Report advisory services. Mobile is increasingly seen as key to the future of the business, and arguably, because of its inherent emphasis on calls over clicks as the currency of leads, a place where directories have a more level playing field.

Next week I will be traveling to the Association of Directory Publishers meeting in Houston, where I’ll be very interested in talking to smaller market publishers about the environment they are experiencing. At the last ADP event I attended, it was clear the economy had taken a toll on many publishers, but there wasn’t much talk of a secular decline. I’ll be interested in hearing how the mood and message have changed since the last gathering.

Last week the Australian directory publisher Sensis released its half-year financial results, ended Dec. 31, 2009, which showed pretty strong resilience but nonetheless a meaningful decline in print revenues. For the half-year period, combined print and online Yellow Pages results were down 4.3 percent. Print Yellow Pages declined 8.7 percent. Including White Pages, the print drop was 7 percent. White Pages (print and online) declined 3 percent.

These are declines that would be the envy of most global incumbent publishers, and in fact they are far better than what other traditional media peers have experienced in Australia. Newspapers, for example, declined 18 percent in the same period. But over the past few years, Sensis has been an industry beacon for sustaining print growth while so many other companies were seeing declines ranging well into double digits. The latest results raise the obvious question of whether Sensis is facing the same fate as its peers, albeit delayed a year.

We spoke yesterday with Sensis CEO Bruce Akhurst, who doesn’t believe the declines reflect a sudden secular shift, and he expects to see “a more stable selling environment” in 2010 than in 2009. Akhurst offered several explanations for the 1H 2009-10 drop, and for why he is confident that print will rebound.

Akhurst noted that the first half of Sensis’ July-June financial year features all its largest markets (including Sydney and Melbourne), which as in other global markets have often substantially weaker print performances than small town and rural directories. Second, Akhurst pointed out that sales canvasses for these books took place in the early part of 2009, when worry over the global financial crisis was at its peak.

Akhurst also cited cause for hope. “Our customer base has remained intact,” he said, adding that most of the decline came from advertisers pulling back, or failing to expand into new books and categories as in the past. In general, customers did not abandon the category. Akhust says Sensis has 600,000 advertisers.

Also, Akhurst said that while the financial crisis created an overhang of fear, the actual economy has not suffered very much, with unemployment around 4 percent. He believes an improving economy plus loyal customers suggests a rebound in White and Yellow print.

“The next canvasses will be very important to us,” Akhurst says.

Still, the company is making changes. First it is moving significantly this year from a product based to a “network based” sales approach, meaning Sensis will focus its sales messaging around lead-generation and ROI metrics, across channels. The company will still sell on a pay for inclusion basis. Akhurst does not see pay for performance or performance guarantees anytime soon.

“It’s a continuation of a journey we’ve been on,” he said, noting for example the company’s dramatic increase in its commitment to call measurement a few years ago. The completion of the journey to the “network” approach depended on launching a new generation Amdocs publishing system, which went live in October.

Yell, the U.K.’s largest directory publisher, announced today that it will move 100 percent of its print directories onto a compact print format by the end of June this year. Yell bills the announcement as the “biggest design revamp for more than 40 years.”

Yell’s decision furthers a global trend to reduce the footprint of print directories, with the primary stated objective of increasing possession and usage, particularly in large markets. Reducing the size of the book also lowers costs and improves the environmental friendliness of the book, or at least enhances the product’s green image.

In the United States, Yellowbook (a division of Yell) has converted several of its directory titles to a compact format, with the tagline “new eco-friendly size.” While today’s announcement does not reference Yellowbook, BIA/Kelsey would expect that Yellowbook will soon follow Yell’s lead and covert most or all of its print directories to the smaller format.

Other publishers that are widely using the compact format for their main Yellow Pages directories include Eniro and PagesJaunes.

Vertical businesses that have relied on Yellow Pages and newspapers and other classified channels aren’t always seeing the same performance-based results that they might expect in the Google age. But many of them also aren’t likely to become keyword experts, or spend a lot of time managing their accounts. That’s always the SMB dilemma, right?

That’s what Reply.com is focused on. The two-year-old, 125-person company, backed by $17 million of venture capital, provides vertical advertisers with “enhanced click” packages and validated leads, complete with leads scoring. In addition, advertisers using Reply.com’s auction-based system can filter locations, and put caps on spending and cost-per-click rates.

Vertical segments targeted by Reply.com include key leads categories, including home insurance, health insurance, life insurance, education, auto finance, mortgage, used cars and auto insurance. Auto and real estate segments make up the biggest segments, with 60 percent to 70 percent of Reply’s customer base. Under Reply’s system, each category is customized for the particular aspects of a vertical.

One key differentiator is that the targeted categories are typically not “inventory based.” They may be new cars, rather than used cars; mortgage, or pure relocation leads, rather than search-based rentals leads.

Reply CEO Payem Zamani suggests that Reply’s clicks and lead offers are more efficiently processed than typical ad exchanges, in part due to narrowing the market base with geotargeting and a system for discerning consumer intent. The company is processing 9 million clicks per month, and 1.58 million leads, with customers for its auctions including auto manufacturers, major media companies such as Hearst Newspapers, and vertical sites such as RealEstate.com and Autobytel. The company also works with several of the search engines, SEO sites and e-mail providers.

The basic idea is to create a “Google-like” platform for acquiring traffic, says Zamani. Reply’s knowledge of user intent and location — driven in part by the installation of a pixel to track users — really streamlines the process and drives higher conversion rates, he says. Conversion success depends on how deep the advertiser wants to go. Information that goes all the way through to consumer credit cards for purchase will be a small fraction (maybe 0.1 percent) of more general conversions (30 percent to 40 percent) that provide additional information.

Reply.com COO Sean Fox is a featured speaker at Marketplaces 2010, March 22-24 in San Diego.

Less than a month after its peer company Idearc Media emerged from bankruptcy with a new name (SuperMedia) and a new lease on life, R.H. Donnelley has done the same thing. Freshly out of bankruptcy and US$6 billion lighter on its balance sheet, RHD has shed its historic corporate name in favor of DexOne, which will trade on the NYSE as DEXO.

We spoke with DexOne CEO Dave Swanson this morning about the name change, the company’s going forward strategy and the outlook for the small-business economy in 2010.

Right out of the gate the new company is making changes. Besides a new name and a new board of directors, it is also forming new partnerships. Swanson told us DexOne has inked a deal with Yelp to incorporate Yelp reviews into the DexKnows.com IYP.

Swanson told us the name change had several purposes. The first was that the name R.H. Donnelley, for all its history, is too closely tied with the print Yellow Pages business. And Swanson made it clear that, “Strategically our business is no longer Yellow Pages. It is marketing services.”

He added that because the company is the product of so many acquisitions (Sprint, Quest Dex, Business.com), it made sense to get the whole company behind a single name. And finally, the “One” in DexOne is meant to invoke the idea that DexOne is a one-stop solution for small-business advertisers.

The DexOne vision for a sustainable future is similar to what other companies are trying to execute — provide local advertisers with a mixture of advertising and service products that help them drive and manage new business leads.

This means selling everything from print Yellow Pages to its own IYP to others’ IYPs (Yellowpages.com and SuperMedia) to voice, online video, SEM and so on. Then, DexOne takes the complex melange of lead sources and boils it down into simple packages, or “matrixed pricing.” Swanson compares this approach to how cars are sold — there is a base model, a mid-range model and luxury model.

Given the obvious effort to distance his company from the traditional Yellow Pages label, we asked Swanson where traditional Yellow Pages fits into DexOne’s long term plans. He says print YP remains the predominant source of leads for most top categories, but each year, that becomes slightly less so.

“If all a company does is sell Yellow Pages, it will be difficult to grow over the next 10 to 15 years,” Swanson said. “The product is in slow secular decline. But that doesn’t mean our business has to be in slow secular decline.” Still, while conceding a secular decline, Swanson says he believes print will be relevant for at least another 20 years.

As for the cyclical element, Swanson see only modest improvement in 2010 over 2009.

“The local business economy is not recovering at the rate that financial services and some other segments are recovering,” he says. “And as goes the local business economy, so goes our business.”

The Berry Co. announced today new alliances with Yodle and Web.com that will add to the portfolio of online product and services Berry will offer its small-business customers. The deals are part of a new branded offering called Berry Leads that the company will roll out market by market in 2010.

The deals fit into Berry’s broader strategy of becoming less print centric and more about selling a wide array of local media solutions, supported by performance measurement. To achieve this, Berry is collecting a growing list of partners to deliver components of this strategy, Yodle and Web.com being the latest two. Berry already resells Yellowpages.com and Google, and it has formed a deep partnership with 3L Systems and Salesforce.com to create the systems to enable the company to sell and provision media across multiple products and platforms.

“Our goal is to ensure that our small and medium-sized business clients are generating local leads from the multiple sources and platforms that today’s consumers use,” said Scott Pomeroy, president and CEO of Berry, in the announcement today. “We believe that Web.com and Yodle will bring best-in-class products, fulfillment and digital expertise to our clients, complementing our client-focused approach.”

A year ago, we talked with Yodle after it raised a US$10 million round. At that time, the company reported 5,000 advertisers and 250 employees. Yodle, like rival ReachLocal (which recently filed for an IPO), deploys a direct sales force.

As we learned recently, SuperMedia CEO Scott Klein is open to the idea of companies like ReachLocal reselling its inventory. The Berry-Yodle deal has Berry reselling Yodle’s products. However, we wonder if the Berry-Yodle deal couldn’t be a two-way street, given Yodle’s direct contact with SMBs?

AT&T released its full-year 2009 earnings today, and its Advertising Solutions unit, which includes print Yellow Pages and Yellowpages.com, posted total revenues of US$4.8 billion, a 12.6 percent decline.

AT&T online directories unit Yellowpages.com grew 12.7 percent in Q4, compared with Q3 growth of 20.7 percent. Total online revenues for the year were US$884 million, which accounts for about 18 percent of total Advertising Solutions revenues. This puts AT&T at the high end of North American publishers in terms of share of revenues from online.

Margins took a hit in 2009, not a surprise given the grim economic environment. BIA/Kelsey calculates the Advertising Solutions 2009 margin at 39.2 percent, compared with 45.5 percent in 2008.

One avenue that AT&T will pursue this year to shore up its position online — increasingly critical to restoring the business to growth — is the launch of social media site Buzz.com, currently in invitation-only “alpha” phase.

This article from Forbes yesterday outlines the new product — widely reported to be in the works for some time. Yellowpages.com President David Krantz is interviewed in the piece. While the site draws immediate comparisons to newly flush Yelp, there are some key differences, notably the choice of a “favorites” option over the use of full user-generated reviews.

Buzz.com will be a critical test case for how traditional directory publishers (a label AT&T Ad Solutions no doubt will increasingly resist) can pivot their approach to business into social media. Other directory publishers actively involved in social media include Eniro, European Directories and Truvo.

Canada’s Yellow Pages Group has deepened its investment in verticals with its recent acquisition of Restaurantica, one of Canada’s largest online dining communities. Terms of the deal were not disclosed, but a report by Paul Steep at Scotia Capital suggests the amount was immaterial to YPG’s financial results.

Restaurantica was founded in 2003, and has more than 400,000 restaurant listings (50,000 in Canada) and 200,000 reviews in North America. YPG’s objective is to deepen content and user engagement in one of its most critical online search categories. The deal is interesting in part because YPG CEO Marc Tellier has in the past made statements expressing doubts about the compatibility of consumer reviews and Yellow Pages.

According to Nicolas Gaudreau, YPG’s vice president, digital media: “Approximately 80 percent of dining decisions are significantly influenced by recommendations and reviews. This acquisition allows us to reinforce our commitment to helping consumers make smarter business decisions.”