Prescription for the Yellow Pages - #DMS09
Charles Laughlin and Neal Polachek of BIA Kelsey talking about their survey of Yellow Pages CEOs:
Some quotes from CEOs on where we are today:
- "Conserving cash has replaced growth. Advertisers have reduced spending at a rate we've never seen before"
- "Print usage has dropped significantly. Nobody talked about usage in the past because sales were based on inclusion v. ROI"
- "There is an oversupply of classified ad options - too many books"
Kelsey is forecasting that the industry is $30B with 10% coming from digital. Digital will continue to grow it's share
Advertiser volume has decreased from 3.7MM in 2006 to 3.4MM in 2008 while average account value has increased from $2,701 to $3,250 in the same time period.
EBITDA margins have droped from 45% in 2004 to 43.5% in 2008.
Europe has the largest share of revenue from online with 25% in 2008. North America is at 10.4%. 15% avg global share from online.
Where we're headed:
- We will grow our share by "reaggregating the consumer"
- We will sell leads rather than products
- Price per call is a leading model going forward
- The cost structure is fixed with declining revenue - how do we change this?
What to look for?
- "Out" Models:
- Revenue by product channel
- References as a usage measure
- Subscription v. Performance
- Leads & conversions
- Profit per advertiser
- Customer satisfaction
What to Look for:
- Performance & Fee based blended ads
- Transactional services
- Big shift in recruiting and training sales reps
- Increase in specialists on sales teams
- May reps will struggle with the transition
- Channels get smaller
- Technology supplements core channel
- Outsourcing will increase
Neal steps up to the plate with a wee bit of local wisdom:
The 3 P's of selling marketing services to SMBs:
Presence - Can the SMB be found?
Performance - Can you deliver leads?
Permanence - Can you retain and maintain the account?
Not sure I heard any prescriptions here but this was a good tee-up for what's going on in the industry.