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Jul 5 2005
Uzal Got It Right 10 Years Ago

Tom Mohr, president of Knight-Ridder Digital, added, "I sometimes don't think we have fully come to terms with the degree to which we need to undergo transformational change in order to be in a defensible position for the next five to 20 years." I wonder if newspapers have been hearing this message for so long that they don't hear it anymore. At the Interactive Newspapers Conference 10 years ago in February of 1995, keynote speaker Uzal Martz, president of the Pottsville Republican and vice chair of the NAA, told the 700 people in the audience, "The only certainty is a rapidly accelerating pace of change of everything around us including the technology...we must change, adapt or die." Not only is classified advertising being hit by new products with more value to consumers, but display ads are being hurt by the mergers of big advertisers like Sears/K-Mart and SBC/AT&T.; Meanwhile, readership is declining. Aggressive newspapers that are willing to change are joining with partners ( or developing their own verticals like Cox's, but too many papers are managing their business to maximize short-term cash flow.
Blog: Local Media Blog
posted by  John Kelsey at  11:01 | permalink | comments [0] | trackbacks [0]

Jun 30 2005
Play It Again, Sam?

Specifically, digital radio can offer listeners very high-quality sound and allow stations to split their signals to increase channels. The problem is the conversion is expensive, perhaps $100,000 per radio station, and only listeners who have digital receivers will notice the difference. The chief executve officer of the second largest radio giant, Viacom's Infinity, was quoted in Monday's Wall Street Journal as saying, "The industry did not invest in its future. If we had invested three to five years ago, people would be thinking differently about our competitors." The key point here is the recognition that the competition isn't other advertiser-supported radio stations, but rather other delivery vehicles. The radio industry's revenues did not climb back to the level of 2000 until last year. Earlier this year, 21 radio groups agreed to "accelerate the transition to digital radio" in about 2,000 stations so that they can begin broadcasting both digital and analog signals. That's $2 billion or about 10 percent of their 2004 revenue. The leaders of the Yellow Pages industry should take note of the similarity of their position to radio. Yellow Pages publishers must forge industry cooperation to develop a meaningful Internet Yellow Pages local search product. In research results released today by The Kelsey Group and ConStat, 70 percent of U.S. households now use the Internet when shopping locally for products and services. This is up from 60 percent less than 18 months ago. The trend is clear. The time for Yellow Pages publishers to cooperate and invest in its future is now while the technology is still relatively young.
Blog: Local Media Blog
posted by  John Kelsey at  19:09 | permalink | comments [1] | trackbacks [0]

Jun 30 2005
A $1 Trillion Market Cap for Google?

Sorry, but I simply don't believe Google will reach a trillion-dollar market cap. Don't get me wrong, Google is an incredible company. One of the things that I like about them is their relative modesty, something that is not often seen by management of companies that have grown quickly. Two very good companies regretted their hubris. Naveen Jain was CEO of InfoSpace when he predicted that his company would grow like Jack's beanstalk. It has had a tremendous run, but the credit goes to its current management. Similarly in early 2001, Forbes did a cover story on Cisco in which CEO John Chambers did not dispute that his company could grow at 15 percent a year for the forseeable future. The timing was unfortunate in that Cisco has yet to recover from the technology slump that began in earnest when the Internet bubble burst in February/March 2001. This is an old story. Andrew Tobias wrote a marvelous book in 1970 after serving as the 22-year-old marketing vice president of National Student Marketing Corporation. "The Funny Money Game" was the true story of a company that Wall Street analysts were told would grow at 300 percent a year through acquisitions. As I recall, the book started with a (fictional) description of the National Student Marketing Corporation pavillion at a World's Fair dwarfing that of General Motors' next door. I don't have to tell you what happened to National Student Marketing. Google is not going to go down the tubes. In fact, I believe it is helping to change the very nature of directional advertising, reaching shoppers when they are ready to buy. But articles suggesting that Google will be a trillion dollar company hurt the search business more than they help it.
Blog: Local Media Blog
posted by  John Kelsey at  18:42 | permalink | comments [3] | trackbacks [0]

Jun 3 2005
Together Again: The Horses are Back in the Barn

The Kelsey Group agrees that it is important to include IYP and local search products offered by publishers to help national advertisers make informed local Yellow Pages buying decisions. Our concern was that a method for including online look-ups could not be agreed upon quickly and that the syndicated program would be slowed down or weakened. It appears that a compromise was reached. While Dex took an unpopular position by reneging on its initial support for syndicated research, we supported the concept of including electronic with print to put Yellow Pages on a level playing field with other media. Most importantly, the future of the Yellow Pages is stronger because the community has come together once again on this significant issue.
Blog: Local Media Blog
posted by  John Kelsey at  20:40 | permalink | comments [0] | trackbacks [0]

May 27 2005
Tiger, Joe, Byron and Katie

Let's start with sports. As any golfer knows, Tiger Woods' streak of making 142 consecutive cuts stretching back to February 1998 was broken last week at the Byron Nelson Championship. (Mr. Nelson's 11 consecutive wins on the tour is similar to Joe DiMaggio's 56-game hit streak in that neither will ever be broken.) And how about Katie Brownell? The only girl and an all-star since she was nine in her upstate New York little league., Katie pitched a perfect game, striking out 18 straight opponents. That's a more perfect game than Don Larson pitched in 1956, and he wasn't batting .714 like Katie is. So our client asks a good question and an important one. The easy answer is Yes. Yellow Pages publishers, like newspapers and broadcasters, are most certainly losing revenue because people are turning to the Internet for their directional media needs. But please don't ask me to be too specific because all we can do is estimate. Next week our Global Yellow Pages report: The Kelsey Group's Outlook and Forecast is going to be published. (Major pieces of it are already available to customers.) That report has over 500 pages of very detailed information presented in both a macro and a micro approach. That is, we cover markets in the aggregate and we provide specific details about every major company in the Yellow Pages community. Compiling the numbers is hard, and we are pleased to showcase the Tiger, Joe, Byron and Katie of the Yellow Pages industry. The harder part is the direction and the velocity of change. Sports analysts have to live with their predictions til the next game. We hear about our forecasts for years. We'll accept the accountability.
Blog: Local Media Blog
posted by  John Kelsey at  16:14 | permalink | comments [0] | trackbacks [0]

May 20 2005
Telco Mergers and NHL Hockey

Everybody involved in hockey -- not just players and management, but people who sell beer or jerseys -- loses. No one who was not intimately involved in the negotiations can understand what went on between the two sides, but the end result is that this was the first cancellation of a major league sport in North America ever. The losers from the telecommunications deals (let's include SBC and AT&T; here) are not as immediately obvious, but the mergers will have a much greater impact on the economy. Thousands of people will lose their jobs through "cost savings," and prices will rise, particularly for small businesses, through less competition. If small businesses spend more money on communications (a required expenditure), they will have less money to spend on marketing their goods and services. Cutting marketing and sales expenses is what companies have always done when they need to increase their bottom line. It's a short-term gain, but a long-term loss. Marketing, whether it's enhancing the image of your brand or telling people where they can buy your products and services, is one of the things that makes the U.S. economy so robust. Advertising has outpaced GDP most years and that is a good thing for everyone involved in media, marketing, retailing and most every other industry. So the 2004/2005 NHL hockey season is over, and both sides are at fault. But the season of larger telecommunications companies is just getting started. We all lose.
Blog: Local Media Blog
posted by  John Kelsey at  07:04 | permalink | comments [3] | trackbacks [0]

May 19 2005
Top of the Heap? Supermarkets and Ample Leg Room

At any rate, what is germane to this blog is that Harris asked about online search engines, Internet service providers and online retailers, all of whom did pretty well with 79%, 72% and 70% of adults saying they are doing a good job of customer service. Somehow comparing search engines and ISPs with packaged food companies and brokerage firms seems a little odd, but it's nice to know that we are working in full-fledged industries. Air travel is another fact of life like buying groceries and paying bills. What amenities does eMarketer report business travelers want? No surprise here, the answer is ample leg room (88%) and 63% wanted extra overhead/on-board storage. What was curious was that an increasing number of business travelers want in-flight Internet access (36% up from 27% last year), and 23% believe cellphone usage should be permitted in flight. I can survive without both, thank you, because that is the one place that I am not "always on." eMarketer does a good job of reporting on trends, and I applaud their ability to cover those of value.
Blog: Local Media Blog
posted by  John Kelsey at  14:52 | permalink | comments [4] | trackbacks [0]

May 10 2005
Name, Rank and Revenue Number

The question is, why can��t the big telco publishers participate in the revenue growth? If the U.S. Military Academy that trained Generals Grant and Lee can change to meet the needs of their country, surely telco publishers can change to get back on a growth path. Companion books, IYP, larger ad items, awareness products and an expansion effort by Verizon have all helped to stop the bleeding, but they do not seem to be the silver bullet. As is pointed out in GYP, ��Many of the larger publishers�� efforts to drive core product growth are not sustainable long-term sources of growth.�� Digital services combined with outstanding operations and sales experience will help over the next few years to stabilize revenue, but eventually advertisers are going to follow consumers onto the Internet in an increasingly broadband world. The fact is that the RBOCs don��t see Yellow Pages as mission critical, the way incumbents like Dex and R.H. Donnelley do. That is their prerogative since we��re certainly not dealing with national security. "What is the Future of Yellow Pages�� will be discussed at The Kelsey Group��s annual Directory Driven Commerce conference in Denver, September 27-29, 2005.
Blog: Local Media Blog
posted by  John Kelsey at  09:37 | permalink | comments [1] | trackbacks [0]

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