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So-called Expert Claims Internet Yellow Pages “Overrated”

In the title of a transparently self-serving press release [1], Barry Maher claims that “online yellow pages advertising (is) often overrated”. Maher says in the release, “It may be the wave of the future, but the dull, old-fashioned, low-tech print directories are still the wave of the present. Businesses do need to be online. Just not at the expense of what’s driving in the dollars today.”

He goes on to say that “For most local companies, there’s still far, far more potential business in the print directories than in anything they might do online.”

(Before I go further, I should disclose that I work for arguably the biggest combined print and online yellow pages company in the US. My comments on this matter are merely my own opinion, though, and not any sort of official stance from my company.)

It seems to me that the headline title of the PR was intended to be controversy-provoking in order to attract more attention than an announcement about the publication of a book on how to advertise in yellow pages would otherwise be (yawn!). The intention was to promote Maher’s book on optimizing print YP ads, So, I really hesitated about rewarding this sort of thing with yet more attention than it merits. Yet, I believe that this claim is pretty irresponsible, so I’m going to address it. I don’t think that Maher can possibly understand IYP nor general internet advertising or he could not have said that “there’s… more potential business in the print directories… than… online” (paraphrased).

Read on and I’ll explain why I think this was not reasonable.

Just on the face of it, internet ads and info are just keystrokes away from millions more consumers than the drastically more limited distribution of any printed books. So, there can be no question that there’s more potential business possible through IYP than Print YP.

The two media have disparate methods for tracking ad performance. But some IYP provide pay-for-performance ads which only have you paying when a user clicks through to your information or when a user phones you. If you figure up your average conversion rates — how much money do you make on average when someone contacts your business — then you can figure out how much you’ll be willing to pay for those referrals. A plumber might make an average of $50 gross per phone call let’s say just for the purposes of illustration, so he might be completely willing to pay quite a bit for each referral. With pay-for-performance, he can “buy” as much business as he wants without it ever really being a losing proposition.

As long as the acquisition cost is sufficiently outweighed by the associated income, how can anyone complain? With pay-for-performance, there are much better metrics for telling if the ad is effective enough, and one can adjust the campaign to fine-tune it by changing keyword targets, ad copy, and geographic targeting. With print, one has a single chance each year to get it right, and then you have to live with (and pay for) the ad until the next year.

With print YP, that same plumber typically will have to pay a fixed fee per year just to get impressions that are based off of distribution numbers, with fewer ways of assessing conversions derived from the ads. Sure, he could get a tracking phone number for the print ad for some directories, but one “secret” detail is that data aggregators collect data out of phonebooks across the US, and sell that data to online YPs. So, a tracking phone number may actually be sending calls to the plumber from more sources than just that particular printed book. In most cases, print advertisers are not using any sort of tracking to figure out where their referrals are coming from. So, they’re paying to be in printed books which people may or may not be using — most advertisers just won’t know for sure.

Now, I’ve mentioned before [2] that the print yellow pages is not dead yet, and I believe that advertising in them still brings some very good exposure. But, I think that those of us who have ready internet access are using print directories less and less. Research analysts are predicting the decline of print YP within ten years, according to some for this very reason. While there’s still value in them, if usage is declining as many of us have cause to believe, then advertisers will have steadily declining exposure and referrals from them. If the trend is a geometric progression over ten years, it would be reasonable to reduce print spend by 10% each year, and increase online spend by the same amount.

There’s good research indicating that the internet user demographic is typically more affluent than consumers and households which have not adopted the internet. So, potential customers who are more likely to be able to buy a business’s products and services will be online.

Considering all this, issuing a press release which would lead local businesses to be more hesitant about advertising in online YP is irresponsible. Just as with any other ad media, businesses need to carefully select advertising products that bring in more money than they cost. As long as you can tie your advertising costs to profit, I think the best approach is to cast your nets wide and advertise in as many distribution channels as possible in order to maximize exposure.

The press release refers to Barry Maher as “the expert TIME called, ‘the most widely respected consultant, speaker and writer’ on Yellow Pages advertising”. It seems odd that I’ve worked in the YP industry for a decade and hadn’t heard of Maher before. So, I went over to Greg Sterling’s blog and he said that he’d never heard of Maher [3], either. Now, Sterling is a widely recognized expert in local media, so this is perhaps pretty telling.

I see that Maher responded to Sterling’s criticism of the PR:

“I’m just saying that at this point 70 million references a month is dwarfed by 1.5 billion refences a month to the print product and small business people need to understand that.”

It’d be really great if Maher would mention sources for the 1.5 billion references data, particularly since I wasn’t aware that printed books have technology embedded in them in order to count when users look at them, similar to what we have for tracking usage of interet sites. Seriously, though, I believe I can point out the logic failure in this reasoning. He’s likely comparing usage of all print directories, worldwide or nationwide, collectively with usage of all online yellow pages. Even if these two numbers, each counted/estimated in entirely different manners, were accurate, it’s not right to group usage together in this manner.

Let’s say that a major printed yellow pages directory for the Greater Dallas Area is distributed to the tune of two million copies. The distribution/circulation numbers for that book are based on how many places the books were delivered to, but quite a lot of major metro areas have multiple books, so individuals are likely throwing one of the competing books in the trash. In other cases, households might keep the book, but if they have internet access or wireless phone applications, they may not be using the print books any more.

Online yellow pages are not limited to only local distribution. People all over the world use online yellow pages to plan for travelling to Dallas, whereas they do not have access to those local print directories. There’s also a lot of B2B stuff that’s now going on through the internet, too. Further, I suspect that his 1.5 billion references number is arrived at by counting total numbers of distributed print directories across the nation, then multiplying that by some estimated number of times that people look something up in the print books. That estimated number is likely based on random calling of a representative sample set of individuals in an area, and polling them to see how often they use their printed YP per month.

If I’m right and the sampling was done through calling a set of consumers in the area and asking them survey questions, I bet the sample set of users come primarily from people who still have landlines for their telephones. People with landlines still are listed in white pages, while most of those who have dropped their landline service in favor of wireless phones are not in the white pages. If a research company randomly sampled people listed in local white pages directories as to their print YP usage habits, they’ll get a decided slant in favor of print usage. People who still have landlines are less likely to have internet connections in their homes, perhaps, because they may be slow adopters of new technology.

Regardless, the estimated numbers of print directory users per month are going to be arrived at through methods that are completely different from the numbers of users conducting online local searches, and comparing them as though you’re comparing apples with apples is not going to give a truly representative comparison for the purposes of basing business decisions. I think it’s likely that the print usage estimates will by nature have a far higher degree of error, compared with IYP usage, since online sites have better information for telling when someone looks at any given page.

Just for fun, let’s see what another local media expert has to say about the subject. Dick Larkin is a yellow pages industry veteran, and Barry Maher himself apparently respects his word, if Maher’s testimonial for Larkin [4] is any indication. In a recent blog entry [5], Larkin writes:

“…60% of local look-ups occur in the print world (for now). While the shift to Internet is dramatic, print is still viable in many markets. Don’t wait too long to advertise online, because all indications show local web search surpassing print as early as next year and being totally dominant in three short years. The lesson here is to advertise where you get results regardless of the medium. That may be common sense, but it sure ain’t common practice.”

Now THAT sounds much more like fair, balanced advice! 

Local businesses who are not participating in online advertising are likely losing out to their savvier competitors on business growth opportunities. Print still has a lot of juice left in it, but ignoring the online growth trend is not a good strategy for small businesses.