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The Kelsey Report® White Paper

Independent Publishers: Gaining Respect, Scale and Scope
Charles Laughlin,Neal Polachek , 11/19/2001


In October 2000, The Kelsey Group released a White Paper entitled "Independent Yellow Pages Publishers: Options for E-Commerce," in which TKG forecast considerable growth for the independent publishing community, to some extent at the expense of incumbent utility-affiliated publishers.

Specifically, our forecast called for independents' revenues to grow from $1.48 billion in 2000 to $4.5 billion in 2005, which at that time would have amounted to a 28 percent market share. By 2006, TKG predicts that share will be 35 percent.

In 2001, The Kelsey Group estimates the independent sector of the Yellow Pages industry will grow by 17.5 percent to $1.74 billion. We believe the full impact of the economy has not yet been incorporated into the individual publisher forecasts. A number of major independents are entering their second, third or even fourth canvass in some major markets, which should accelerate growth in all but the weakest markets. Our 2002 forecast shows independent publishers growing by 20 percent to roughly $2 billion.

Based on recent interviews with some of the industry's leading independent publishers, The Kelsey Group is confident of its long-range forecast, despite a weak economy that may last well into 2002.

The future for U.S. independent publishers is not without potential pitfalls. Independents have failed to improve their performance in selling to the national channel, a situation made more difficult by the current commission structures. Independent publishers may also find themselves at a severe disadvantage in the relative near future if online Yellow Pages products pick up steam in terms of attracting usage, and with it a larger share of the local ad budget.

Ultimately, Yellow Pages as a media category stands to gain from the advancements made by independents. Rational advertisers will elect to move budget from other media if independent and incumbent publishers continue to improve the value proposition. While the intense competition between independent and incumbent publishers may "feel" uncomfortable at times, all publishers should be comforted if gains come at the expense of other local advertising media.

Copyright � 2005 The Kelsey Group. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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