Ad Encyclopedia: Yellow Pages

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The Yellow Pages often is the primary form of advertising for thousands of local businesses, which account for 86% of Yellow Pages advertising revenue. National advertisers such as Allstate Corp., General Motors Corp. and Sears, Roebuck & Co. account for the balance.

The first phone books in the U.S. appeared in the late 1800s as simple lists of residential and business names published and distributed by the phone company to its local customers. Separate classified listings, or "headings" such as florists, restaurants, and furniture, did not appear until the early 1900s. The listings first appeared on yellow paper when a Cheyenne, Wyo., printer ran out of white paper stock and made a substitution.

Today, Yellow Pages directories are found throughout the world, although the most highly developed markets are the U.S. and Canada. By 2002, almost 250 companies throughout North America were publishing Yellow Pages directories.

Two types of publishers

Yellow Pages publishing companies fall into two distinct types: those that publish directories for telephone service providers, or utility-related publishers, and those not associated with a phone company, or independent publishers. Utility publishers create directories for the service areas of each of their clients, and both utility and independent publishers produce a variety of other directories, such as neighborhood, areawide, business-to-business and specialty—often within the same market area. In addition to print directories, many publishers also offer an electronic or Internet version. The trade group Yellow Pages Integrated Media Association estimated that by 2002, users accessed Yellow Pages 1.5 billion times a year over the Web, CD-ROM and cell phones while they used the printed versions 15 billion times a year.

Most directory publishers give each business a free alphabetical listing in the Yellow Pages under the heading of their choice. Marketers can purchase additional advertising in two major categories: in-column ads and display ads. In-column ads are an extension of the advertiser's business listing and are one column wide. These ads, created by the publisher's sales teams or certified marketing representatives, can include trademark names, logos, color and a variety of type fonts. Display ads are arranged around the in-column ads and listings and can be as small as one-column wide or as large as an entire page. Display ads allow advertisers to include larger amounts of text, artwork, photographs and eye-catching features such as unique borders.

The Yellow Pages works differently than other advertising media. For example, when a person turns on the TV set, it is to view a program, not a commercial spot. But when a consumer goes to the Yellow Pages, it is normally to look at the ads and listings. Thus, a Yellow Pages ad captures consumers when they are most ready to buy. According to a January 2002 study by CRM Associates, an independent market research company based in Boulder, Colo., a Yellow Pages ad extends the reach of other media, returning $14 in revenue for every $1 invested.

"Directional medium"

The Yellow Pages is called a "directional medium" because it points willing consumers in the proper direction to make their purchase and helps close the sale. The Yellow Pages does not primarily create awareness of or demand for products or services. People do not pick up the Yellow Pages and come to the realization that they need a car. But having made the decision to shop for a new vehicle, consumers often consult the Yellow Pages to find a car dealer or even to consider a brand.

According to a study conducted in 2000 by Statistical Research Inc., now known as Knowledge Networks/SRI, the usage rate of the Yellow Pages is high; adults typically turn to the directory an average 1.4 times per week. It tends to be used equally by men and women, generally 25 to 49 years old, who are employed in professional, clerical or sales positions; have relatively high household incomes ($60,000 or more); and are well-educated (attended or graduated from college).

Unlike other media in which sellers seek buyers, a Yellow Pages directory is a place where buyers seek sellers. A study of consumers from 1999 through 2000 by the trade association in conjunction with SRI found that 84% of consumer trips to the Yellow Pages resulted in a store or business being contacted, and almost 90% of these references resulted in an intended purchase or a purchase.

In 2002, the biggest media deal of the year was Qwest Communications' sale of its Yellow Pages for $7 billion to two private-equity firms. In addition, R.H. Donnelley Corp. bought Sprint Corp.'s phone books for $2.2 billion, and Britain's Yell Group paid $600 million for McLeodUSA's U.S. directories.

That year, 3.6 million advertisers spent $13.7 billion in more than 6,000 U.S. Yellow Pages books, according to the Yellow Pages Integrated Media Association.

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