Consolidation is too fresh to have delivered decidedly new ad dollars -- the product life cycle of a directory is 16 months -- as the uptick in 1999 matched that of '98.
Yellow Pages prices increased about 4% in 2000, on par with previous years.
Yellow Pages observers claim industry mergers could stimulate spending in the medium as they change the geographic makeup of books to give them added value.
"The advantage of consolidation is a bigger national footprint that not only produces advertising and marketing efficiencies but broadens the brand umbrella covering publishing, long distance and wireless," says Larry Small, VP, marketing services at Yellow Pages Publishers Association.
Specifically, Bell Atlantic has moved from East Coast-centric to national coverage with its acquisition of GTE, the only truly national Yellow Pages publisher prior to the most recent merger activity.
SBC Communications' acquisitions now give it a crescent-shaped presence from the West Coast (PacTel) through the Southwest (Southwestern Bell) into the upper Midwest (Ameritech Corp.).
"SBC has been advertising a repositioning of its directories to drive usage by building more features into directories . . . to make the directories more consumer-friendly," says Gene Daly, president of Ketchum Directory Advertising, Chicago, one of the nation's largest Yellow Pages agencies.
Mr. Daly believes one of the biggest steps ahead of Yellow Pages publishers is developing price elasticity. "Right now a plumber pays the same full-page rate as a pizza restaurant, but the return on investment for each can be quite different. Advertisers could pay a 25% premium in some categories where they receive a lot of value," he says.
Mr. Small says online Yellow Pages ad revenue (from banners to hotlinks) in 1999 hit about $75 million (no prior-year level was solicited). That volume is inconsequential considering the overall Yellow Pages volume. Producers of online and print Yellow Pages often are the same, offering bundled print and Internet ad options.
As in traditional media, acquisitions among telecommunications companies have dramatically changed the top players. No. 1 SBC now holds the Yellow Pages units of acquired regional Baby Bells, Ameritech and PacTel; No. 2 Verizon Communications is the surviving name of the Bell Atlantic and GTE merger. No. 4 Qwest is a new entry following its buyout of US West.
Yellow Book USA, purchased by British Telecommunications last year, has added the Cincinnati Bell operation and several smaller East Coast units, particularly around Washington and Baltimore.
Yellow Book USA will be spun off with British Telecom's other Yellow Pages and Internet businesses in an initial public offering in the U.K. later this year. The resulting company, Yell PLC, is expected to have a market valuation of about $6 billion.