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Yellow Pages bleeding red ink

PUBLISHER STOCKS DOWN

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But publisher stocks have been hammered, with prices falling precipitously since January. Three companies—AT&T Corp.'s the Real Yellow Pages, Idearc and R.H. Donnelley Inc.—receive the lion's share of the market, and all are to some extent seeing print revenue decline. The ill health of the printed phone book industry goes beyond the fact that more and more people access directory information online, say observers. “Many national advertisers feel ignored, neglected and frustrated with the medium due to a lack of fundamental accountability metrics and other questionable practices,” the Association of National Advertisers' Telephone Directory Committee said in an open letter to the Yellow Pages industry issued in April. The ANA has urged the Yellow Pages industry to improve its measurement practices by providing national syndicated audience measurement research and circulation auditing. The industry currently measures only 18% of the U.S. market. ANA said the $15 billion industry, of which national advertisers comprise $2.3 billion, must address measurement issues in order to meet marketers' needs. “At a time of intense focus on advertising accountability, the committee is discouraged by the Yellow Pages industry's failure to provide basic accountability and ROI metrics,” said Janice Lucente, marketing manager of Allstate Corp. and the ANA's Telephone Directory Committee chairwoman, in the letter. Bill Duggan, exec VP at ANA, told BtoB the lack of syndicated measurement is frustrating. “We have been requesting what for advertisers are basic metrics, and there continues to be resistance on the part of the Yellow Pages,” he said. He said the limited measurement conducted by some of the big Yellow Pages publishers has been “drastically pulled back” recently. One of those publishers, however, disputes the ANA's claims. “Our research is probably the best research in the industry,” said Bob Mueller, executive director of communications and business operations for the Real Yellow Pages, a division of AT&T. “It meets ARF [Advertising Research Foundation] guidelines.” Mueller added, “We've done more research than we ever have in the past in terms of usage on the print product that is very specific by market, and we now research more markets than we have in the past.” Neg Norton, president of the Yellow Pages Association, said the group has initiated a measurement and accountability program to monitor the top 400 national advertisers for print ad effectiveness. Since January, 100 advertisers have been conducting tests using phone numbers that only appear in Yellow Pages ads. Even so, advertisers continue to shift spending to paid search and online directories. Mitch Goldstone, president-CEO of ScanMyPhotos.com was a loyal Yellow Pages advertiser for 18 years. But the photo scanning and finishing company stopped using Yellow Pages ads completely this year after the Yellow Pages in Orange County inadvertently left his ad out of its 2008 book. Goldstone opted to advertise with Local.com, a search engine that targets a business' message to local customers. The Local.com ads made his phones ring more than the Yellow Pages ad did, but at half the cost, he said. “We should have gotten out two years ago,” said Thomas G. Martin, president of private investigator Martin Investigative Services and a Yellow Pages advertiser for 27 years. He replaced that advertising with Google and Yahoo pay-per-click search ads, and will be entirely out of the print Yellow Pages by December. Stephanie Calahan, principal of Calahan Solutions, an organizational consultant, said she stopped using the print Yellow Pages in May. “Fifty-one percent of our leads come from the Internet,” Calahan said. “In the past three years, we have received one phone call from someone who found us in the print Yellow Pages.”
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