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Oct 26 2005
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Independents on Track to Parity: ADP Leader
Here at the Association of Directory Publishers conference in Huntington Beach, CA, the mood seems upbeat and the independent publishers in attendance see blue skies ahead for their businesses, which offer competitive Yellow Pages directories, primarily in the United States. Jim Hail, the ADP's chairman, set this tone with an address built on the theme of "strength" -- in particular, the independent publisher segment's strength within the directory industry. Referring to a pledge made by previous chair Ken Brock to reach revenue parity with incumbents by 2010, Hail insisted the objective remains on track. His point was that if independents grow at the current 15.4 percent pace (using ADP's revenue estimates), they will more than double their share in five years, which would bring them to, or near to, parity with incumbents.

My question is,why is parity so important?

I wonder whether independent publishers are better offer remaining the smaller of the two U.S. industry segments. In his remarks, Hail used underdog references, portraying independent publishers as Rocky Balboa to the incumbents' Apollo Creed (he also compared incumbents to "lumbering dinosaurs").

Being an underdog is a motivational gift from above, not to mention a powerful unifying force. Once they achieve parity, what's the next goal? And if independent publishers surpass the incumbents in share of revenue, what meaningful distinction would then exist between the two categories? How can you position yourself as an underdog when you are just as tall and strong as the "bully" across the table.

We think parity is possible but not a given. If independents continue to outgrow incumbents indefinitely, it becomes a question of how quickly they reach parity. However, we question whether any publisher based largely in print will be generating positive organic growth beyond 2010; and sooner or later expansion reaches a point of diminishing returns. So it is quite possible that share levels could stabilize at some point in the future. Will independents reach parity before this happens? Maybe, but I'm not sure why it matters.

Ultimately, we see the parity goal mostly as a rallying cry for independent publishers to keep working, keep innovating, keep expanding and keep growing. Achieving the parity goal should not be as important as the true measures of success -- sustainable growth and improving margins. Parity is about bragging rights. Business is about making money.
Global Yellow Pages Blog
posted by  Charles Laughlin at  13:50 | comments [2] | trackbacks [0]


posted by   Doug Oct 21 2005 at 18:51
By 2010, it is likely that PYP will be less relevant than IYP or internet based local search. In one sense, that may be a pyrrhic victory for the independents...they get parity as the revenue and usage momentum moves away from PYP. The notable fact is that none of the independents has a viable IYP nor mobile service. Imagine a sales call in 2010 when a customer asks about a publisher's ability to provide look-ups through local internet search, IYP, or mobile data services and the independent publisher rep has to say "Those are not as important to your business as printed Yellow Pages." I suspect the call will end abruptly with a disappointed sales rep leaving and wondering what job he/she is going to next.

posted by   Charles Oct 22 2005 at 08:14
Thanks for the post, Doug. I do agree that digital is a potential achilles heal for many independents. Question is when will this begin to impact their businesses? Many independents contend that their markets, smaller or more rural areas in particular, are not yet really being impacted. It is hard to imagine operating in a mid-size to large market very much longer without a viable digital solution in the sales bag. This is a challenge for all publishers -- more so for some than others.

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