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The Kelsey Group Puts Print Yellow Pages On Notice

Walking FingersOver at Media Post, The Kelsey Group is quoted today saying that the erosion in usage of print yellow pages is likely to fall off at a higher rate this year — by 10% this year, compared with only 2% to 3% erosion in recent years.

They state that a combination of factors such as more users going to internet yellow pages and local search engines combined with a recession are propelling the rapid erosion. Concerningly, one can extrapolate that if print YP usage is dropping, advertiser dollars might also follow the herd.

As Greg Sterling points out, The Kelsey Group has historically been a very staunch defender of the print YP industry, so this article is a bit of a gut-punch to people in the legacy print business, even though anyone watching the trends over the last few years won’t find it all that surprising.

One thing the Media Post article doesn’t mention is how a number of smaller, regional print yellow pages companies have had surprising growth in ad sales over the past year, likely at the expense of the larger yellow pages directory sales. As Greg further points out, some of the smaller, nimble companies like ReachLocal (who are frenemies with the yellow pages industry) may be poised to take over the small business advertiser base as those companies’ agencies of choice if the yellow pages industry cannot retain them. Yellow pages has held a home court advantage with small businesses for a long time, but there are a lot of hungry wolves nipping at their heels, and they will need to retain their advertisers while transitioning them over from print to online advertising in order to retain revenue over the long term.

I’ve suggested before that the concept of “yellow pages” itself might also be endangered in its online incarnation, since specialized directories and local search engines may now be obscuring the need for “traditional” yellow pages websites in the eyes of consumers. Indeed, I see a new generation of young consumers who barely seem to know what “yellow pages” is, and this could explain why fewer and fewer people seem to be trying to find yellow pages in Google:

Yellow Pages Usage Declining

(click to enlarge)

So, yellow pages companies have some multi-fold challenges to face. They must strive to transform themselves from being only print yellow pages into being a liked/trusted agency that small businesses perceive are vital/useful for getting their ads into multiple sites throughout the internet, and they simultaneously need to transform their traditional yellow pages directory websites into local information portals with broader appeal and compelling stickiness to attract and retain the newer generation of users.

The bigger yellow pages companies are aware of all this, and are not to be counted out of fight yet. Unlike the newspaper industry which has been a little late in adapting to the internet paradigm, yellow pages are adapting themselves to protect their competitiveness in the market, and the analyst warnings are only intensifying their attention and resolve.

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