It’s no secret — everyone (even my Chiropractor) knows that the phonebook is generating fewer sales leads for advertisers.
The implications are truly sobering for companies such as Yell which reported earnings last week.
Print Yellow Pages Dinosaur
Due to the plummeting British pound, quarterly revenue was actually up 7% over the same period for 2007. However, adjusting for exchange rates, overall revenues were down 2.4%. And while the business posted a very strong 40% increase in online revenue — it was completely off set by a decline of 7% in traditional “bread and butter” print revenues.
And, whilst Yell expects continued robust growth in the online business – it’s simply not enough to stop the bleeding in the print business. Even in a best case scenario, if Yell were able to convert 100% of their print churn into online ad programs — the harsh reality is that the exact same customer “online” generates substantially less revenue than they previously did “offline” in print.
Indeed, it’s a viscious cycle — and, according to Yell’s CFO, it’s one that has many smaller independent PYPs appealing to Yell for a lifeline.
“There is no surprise that we are getting more and more rescue calls [from independent publishers] begging use to save them from imminent collapse. The model doesn’t work when faced with an organization as well organized as ours and with an economy as tough as this,” Condron said. “And most are experiencing a double whammy because they do not have a credible Internet offering and they cannot make the investment for the future.”
This post by Kelsey, highlights how difficult things have become for independent publishers, who previously experienced strong growth and plentiful exit opportunities. With Yell’s appetite for acquisitions gone, the game seems to be over for the independent publishers. Their last hope for survival is to find credible ways to transition their existing print advertisers to online platforms designed to help small businesses get found organically in web search engines, and directionally in local search engines.
On the anniversary of Charles Darwin’s birth, this is so fitting. Paper is expensive and cumbersome. Even though it was easy to get listed, businesses must evolve. Broadband “phone companies” must evolve to become more than a utility and to keep the directory business. Small businesses must evolve to get found by potential customers. And technology companies will evolve to help the whole process easier.
That’s what SMBLive is all about.