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Jun 28 2005
Publishers Face Universal Challenges
The Kelsey Group met last week with Publicar, Colombia's leading directory publisher, and was given a look at the results of recent user focus groups conducted in that country. The results were fascinating to us, because they were so similar to the results of similar focus groups conducted here in the United States.

What we discovered is the issues facing directory operators in Bogota are essentially the same ones faced in the United States, and to a large measure in Europe and other developed directory markets: How to keep the core directory relevant to a consuming public that is growing accustomed to finding information online.

Colombian consumers with Internet access interviewed in the focus groups expressed a similar tendency to use the Internet less than those without access, and are more likely to turn to search engines to find out information about local businesses.

While we must always note the limitations of focus groups, the consistency of the findings is striking to us. And the fact that these results are similar in what is perceived to be a developing market is all the more interesting.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  07:57 | permalink | comments [0] | trackbacks [0]

May 20 2005
Bain Wastes Little Time Selling SuperPages Canada
This just might be a record for the shortest holding period for a private equity investing in the directories business. This morning, Yellow Pages Group announced it will buy the SuperPages Canada business, which Bain Capital had acquired from Verizon back in September for C$1.98 billion. Today, the price is C$2.55 billion.

We haven��t yet listened to the conference call explaining the deal, but it is no secret that YPG was an eager suitor the last time this property was for sale (way back in 2004), and clearly it never gave up on the idea of creating a national platform for it print and online directories business.

It��s worth noting that the price went up by a half billion Canadian in the time Bain owned the asset. It is also interesting that Bain took the decision late last year to close rather than sell its Eastern Canadian operations. That decision certainly makes it easier and cleaner for YPG to acquire the Bain assets, since there is now no market overlap.

And the incredibly brief holding period by Bain may suggest a general trend toward shorter holding periods. 3i and VSS have signaled a possible quick exit from Yellow Brick Road in Europe.

We will have more coverage of this deal in Local Media Journal later this week.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  07:01 | permalink | comments [0] | trackbacks [0]

May 19 2005
Dateline: EADP Roma
The nature of local search and its potential for usurpring the strong position Yellow Pages holds here in Europe dominated the morning session at the EADP's spring meeting in Rome. Jean-Marie Guille, who runs online directories for France's PagesJaunes, laid out with great clarity the situation publisher finds itself in as local search emerges in Europe. He shared high-level results from some research commissioned by PagesJaunes showing the relative position of search engines vs. online directories in various European markets. The results showed that Google's position is very strong, but not uniformly so from market to market.

A hot discussion topic was Yell's recent decision to partner with Google in a manner similar to the deal struck by Yellow Pages Group in Canada, sharing data in exchange for offering advertisers exposure to the search engine's enormous traffic. The deal has resurfaced debate over which course is best -- partner now to protect customers relationships, or make a decision to compete and own the entire value chain.

Guille called search the first directly competitive medium to emerge in the history of Yellow Pages. ��The difference is that search uses the same sales arguments as Yellow Pages, interacts [with the user] at the same moment that a purchase decision is being made.��

PagesJaunes commissioned Nielsen to study comparative reach of search properties in European markets. It basically showed that Google dominated most markets. One exeption was Sweden, where Google had 32% share, while adding together the various Eniro properties came to just under 40%. Shows that market position determines a lot of the strategy a given player follows. PagesJaunes also extrapolated results to show that IYPs monetize local searches at a much higher revenue per visit than search engines.

eBay's Gil Penchina, who runs Southern Europe, came to discuss its evolution of working with SMEs. One of his most interesting comments was that eBay sees the value of structured data that directories possess, and the online auction company is trying to make its data (particularly small business) more structured, and therefore usable, translatable, etc. using more forms and templates .

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  15:02 | permalink | comments [0] | trackbacks [0]

May 18 2005
Yell the Best Buyer for TWP
Here is a snippet of what we have to say about the Yell acquisition of TransWestern Publishing in an Advisory that will be issued tomorrow to clients of The Kelsey Report: "...a private equity buyer might have found it difficult to increase [TransWestern's] value through new efficiencies. Instead, it would have faced the prospect of making significant investments in systems, marketing and product development in order to maintain the business��s competitiveness. Yellow Book, on the other hand, is in a position to take what TransWestern has and integrate it into its existing operations, which creates some immediate synergies."

What does the rest of the global YP community think of the deal? Did Yell pay too much, get a bargain? To what degree does this enhance Yellow Book's position in the U.S. directory industry?

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  08:22 | permalink | comments [0] | trackbacks [0]

Mar 31 2005
User View Datapoint Raises Questions, Ire
The Kelsey Group and ConStat recently completed the second wave of our User View research project, in which we ask consumers about a range of issues around the use of local media, including both traditional and digital.

One of the many findings from this research got our attention, and we felt compelled to communicate this information to our clients. We did so in the form of an Advisory issued earlier this week with the intentionally bland title, A Research Advisory: User View II.

Those of you who are TKG clients have already seen the note, and for the rest of the Yellow Pages community, here is the bullet: We asked the question, ��In the past year, which of the following sources of information have you used or referred to when shopping for products and services in your local area?�� Respondents were given a list of choices that included printed Yellow Pages, newspapers, Internet Yellow Pages, search engines, online shopping sites and direct mail, among other choices.

The results showed a meaningful decline in the number listing printed Yellow Pages from the first wave of User View in October 2003 to the second wave, conducted in February 2005. The decline was from 75 percent to 62 percent listing Yellow Pages among the resources used in the past year to find information on local businesses.

Is this evidence that the business is in a freefall? Of course not. At the very least, it does suggest to us that more research is needed to determine whether printed Yellow Pages is losing some of its stature as a primary resource for information on local businesses, amid a growing list of media choices, including increasingly robust local search.

The Yellow Pages industry can respond to this kind of data in a variety of ways.

It can ask hard questions about the true meaning of the findings. We encourage such questions, and we will engage anyone with standing in this industry in a discussion of the User View research, how it was conducted and how we interpret it.

Another response is to declare the end of Yellow Pages as we know it. This is certainly not the conclusion we have reached. We��ve said it before and we��ll say it again, the Yellow Pages has more competition than ever before, but it also retains tremendous power and continues to make a lot of money for its advertisers.

The industry can discourage ��negative�� thinking about the business. We certainly welcome comments from anyone who takes this view.

Finally, the industry can see the User View datapoint as one of many bits of evidence, some of them apparently contradictory, that as a whole point to the need for an aggressive effort to promote the core directory product while simultaneously preparing vigorously for the inevitable shift in the revenue mix toward one weighted far more heavily toward digital. This shift is already taking place, and we expect it only to accelerate.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  09:07 | permalink | comments [4] | trackbacks [0]

Mar 31 2005
London Times Reports Yell to Make Play for TWP
A March 27 article in the Times of London online edition says Yell Group is planning to pursue an acquisition of TransWestern Publishing, which recently disclosed it had retained Goldman Sachs to ��explore its strategic options.��

This report comes as no great surprise to us, since Yell has a well-stated ambition to achieve a true national footprint for its Yellow Book division. As it stands, Yellow Book, the largest competitive publisher in the U.S., is in the best position among U.S. operators to declare itself a national publisher. Buying TransWestern would further enlarge Yellow Book��s footprint, as well as its base of revenue. Assuming the Times report is true, the burning question is how much is Yell willing to pay, particularly if multiple bidders drive up the price?

The general consensus has been that TransWestern could fetch upwards of US$1 billion. Yell��s most likely competition will come from private equities, which still hunger for Yellow Pages deals that have generally performed well, and at times spectacularly, for investors.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  09:05 | permalink | comments [3] | trackbacks [0]

Mar 11 2005
SBC Takes Aim at Competitors in New Ads
A story this week on talks about a new ad campaign from SBC that tries to restore the mystique of printed Yellow Pages while setting SBC Yellow Pages apart from competitors �� referred to only as the ��Different Book�� in the new campaign.

We haven��t seen the ads yet, just the description provided in the Adweek story. But it appears SBC has spared nothing. The spot from GSD&M in Austin, SBCDO��s longtime agency, follows a fairy tale motif and is directed by Francis Ford Coppola��s son Roman (no doubt trying to catch up with his sister Sophia). The ad features a voiceover from veteran character actor Roscoe Lee Browne.

Aside from the spot��s production value, there a few things here worth noting.

First, SBC��s newest efforts reflect a general trend toward investing more in promotion of the printed Yellow Pages. Publishers worldwide tell us that they are spending more these days, in most cases as a direct response to competition.

SBC��s decision to call out the ��Different Book�� also reminds us of the tactic used by Yellow Book (not the ��Other Book��) of using broad humor and images to convey the sense that there is only one option available that can be relied upon to provide complete, accurate and relevant information. In the spot, for example, a dog owner using the ��Different Book�� mistakenly arrives at a veterinarian that caters exclusively to cats.

And some comments from the people behind the campaign, as quoted in Adweek, are also revealing. Jonathan Silverstein, an account director, said the ads were trying to bring back a sense that the Yellow Pages is a ��magic book.��

He says: ��They were great at one time �� you got everything. But almost like a fable, something bad happened. Something needed to be corrected.��

Silverstein also acknowledges that the success of SBC��s competitors was top of mind as the spots were created. ��They needed to make a statement, remind people that there is a choice and a quality difference.��

Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  08:35 | permalink | comments [2] | trackbacks [0]

Mar 10 2005
Fear and Backslapping in Las Vegas
Greetings from the Mirage Hotel. I am sitting here staring at Steve Wynn��s enormous signature on his new Vegas strip hotel, poring over my notes from the first general sessions at the Yellow Pages Association annual convention, halfway into its first day.

We heard a lot of cheerleading about the Yellow Pages, but much of it was backed with data and thoughtful arguments. What, if not a trade association, is going to find the glass-half-full way of viewing things?

The morning��s basic talking points to the YP faithful were: Usage is stable; heck, even young people are using the printed Yellow Pages; investors love us; but let��s not be complacent since we have to make sure we optimize our online opportunity if we want to succeed long term.

As an aside, could we please declare a moratorium on the whole ��every threat is also an opportunity�� cliché?

Here are some interesting tidbits from this morning��s speakers:

Outgoing association chair and Dex Media CEO George Burnett hinted that there may be some bumps on the path toward adopting an industry-wide syndicated usage program, which has been in development for months with the general expectation that a program would roll out this year.

In his remarks, Burnett said the industry has made ��real progress�� on syndicated research, but added with some emphasis that a lot of work remained and that Dex was committed to making sure that ��all references regardless of platform are included.��

Later, on a panel on national Yellow Pages issues, Ketchum Directory Advertising President Gene Daly drew scattered applause when he remarked that the increasing complexity in competitive directory markets, ��points to the need for syndicated research,�� and expressed some fears the effort may be stalling.

Finally, also on the national panel, Kathy Geiger-Schwab of the Berry Co. made this remark, responding to a question about which competitive media are most vulnerable to a competitive attack from Yellow Pages: ��The distraction of going after brand and direct marketing has prevented us from conducting an all-out assault on the Internet.�� Amen.
Blog: Global Yellow Pages Blog
posted by  Charles Laughlin at  12:07 | permalink | comments [0] | trackbacks [0]

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