Way back in the online marketing Stone Age (1995) search marketing meant engineering a Website to be “seen” by automated search robots or submitting a laundry list of URLs to human compiled directories for a nominal fee. Long before Paid Search became the “Yellow Pages of the Web,” telephone directory publishers began placing local business listings in Internet Yellow Pages, or IYPs. Shortly thereafter, said phone book publishers began to charge established businesses for premium placement in those searchable directories.
Today, Internet Yellow Pages directories are playing a pivotal role in providing the consuming public access to everything from where to buy a pizza or how to find a qualified plumber in a pinch. The Yellow Pages Integrated Media Association reported there were more than 1.5 billion references to Internet Yellow Pages in 2001. Of those referencing an IYP, 59% made a contact and 60% made a purchase or intended to do so.
What of this microcosm of online advertising commerce? Internet Yellow Pages directories are the overlooked stepchildren of online advertising. They are the providers of local ads for movers in need. They are the purveyors of accurate business information. Users click and buy with them at unprecedented rates. They are local, relevant, and functional. They are the search sites in Yellow.
Old Gray Mare
In the late nineties, right about the time Yahoo! was flying me up to its Sunnyvale headquarters to consult on the design of the Yellow Pages ad units, industry pundits began squawking about the death of phone book advertising. Most of these were centered on users migrating from the print format to the online platform.
Pete Broadbent, CEO of the Yellow Pages advertising agency, Wahlstrom Group (full disclosure, my firm’s parent company), views the term migration as a misnomer. “Migration is misleading in that it assumes that something is moving from one state to another and exists in either one exclusively. Not true with advertising as we've witnessed with the evolution of all media. In reality, we see the augmentation progressing deliberately and sanely with the pace varying by market segment in line with user interest.”
Another agency that specializes in print and online Yellow Pages advertising is Ketchum Directory Advertising. "Usage trends and consumer purchase dynamics are important to benchmark and monitor over time, and buying strategies need to be adjusted accordingly," says Gene Daly, Ketchum's president. "But ultimately, what carries the most weight with clients is the business-building potential and ROI derived from the vehicle, regardless of whether it's print yellow pages or an online directory."
Remember the 1.5 billon references to IYPs? The same report indicated ten times that number of references to phone books.
Internet Yellow pages sites fall into two distinct categories: those built by publishers who also sell ads in phone books and those provided by Web brands. In the former category, Verizon’s SuperPages.Com and SBC’s SmartPages.Com lead the way. In the latter, Yahoo! Yellow Pages and AOL Yellow Pages provide the connection for buyers. If you measure unduplicated audience reach, the world of online yellow pages looks like this.
Source: Nielson//NetRatings, June 2003
The IYP model has many parallels with Paid Search. The first is found in how they generate traffic. Yellow Pages’ publisher sites source much of their traffic to partners who carry their listings and advertisements. For example, yellow pages searchers on MSN view SuperPages advertisements.
On the other hand, some Web brand sites partner with smaller reaching publishers for traffic. Yahoo! partners with BellSouth in its thirteen state regional coverage area. Henceforth, your search for Automobile dealers in Atlanta, GA on Yahoo!’s Yellow Pages offers listings and ads from BellSouth as well. Yahoo! has a similar agreement with SBC’s SmartPages.Com to provide business listings. Most ironically, this relationship is a case study for channel conflicts in that both SBC and Yahoo! are selling the same product via competing sales forces to national Yellow Pages agencies, called CMRs or Certified Marketing Representatives.
Publisher collaborative efforts serve a couple of key needs for each party. While the phone book is still ubiquitous in the offline world, telephone directory publishers don’t carry the same weight on the Web so they must partner with sites like Yahoo! and MSN for traffic. Conversely, telephone directory publishers have large sales forces that can sell ads using the time honored “premise visit” providing a local sales channel for the Web brand.
Business listing information within IYPs is either provided by the telephone companies or by list aggregators like infoUSA, and therein lies a problem. Some of the listing data is outdated and inaccurate. Old listing data shatters the user experience and can render an IYP feckless. Just imagine heading out to a restaurant that moved six months ago. How can an advertiser correct this problem? Providers like infoUSA offer a solution to correct business listings; another is to simply purchase an ad.
At first glance, executing an IYP media plan can be equated to spending an afternoon being entertained by a Newton’s cradle. The ad formats are known as “fire and forget” since the ad is placed once a year and rarely changed. This month, the Yellow Pages Integrated Media Association introduced a Website to help advertisers understand and augment the purchase process for Yellow Pages advertising, both online and offline.
Another parallel with IYP and search advertising is an undeniable benefit for advertisers. The information they present is user-initiated and perceived as information resource rather than an advertisement. For this reason, average response rates are in the range of ten times higher than other forms of online advertising.
However, there are some key departures from paid search. One distinction with IYP is that businesses needn’t have a Website to advertise. Another lies in searchers viewing categories not keyword results. Generally speaking, while click activity and post-click behavior in IYP ads are consistent with Paid Search, according to a Spring 2003 study from Harris Interactive, nearly 75% of responses can come from a phone call. A problem for paid search since including a phone number in the listing would contradict the nature of the ad model.
Although ad formats vary from site to site, the basic idea is that advertiser positioning is hierarchal just like in the phone books. Some publishers have even tried to reproduce the print product on the Web. Herb Gordon, president and CEO of the Association of Directory Marketing referred to this as “A counterintuitive reaction to creating an IYP which does not take advantage of the sight and motion benefits of the Internet.”
For the most part, ad unit pricing falls in the same vein as telephone directories. An advertiser can purchase a local ad along with their print phone book purchase with a cost-of-entry around $300 annually. Advertisers can purchase ad units with national reach for a flat fee as well, sometimes predicated on category traffic.
Search Meets IYP
Every major paid search site is struggling to unlock the local search code and no one can deny the consumer need for relevant localized information. Internet Yellow Pages providers want to capitalize on the success and adoption rates of Paid Search. Therefore, smart money places the future of local search in the ilk of Internet Yellow Pages.
“Search marketing, Internet yellow pages and city guides are definitely heading in the direction of forming a keyword orientated search. Yellow pages are very well structured, and it is comparatively easier for users to find information in the directories,” reports Mark Canon, vice president Business Strategies at Switchboard.
Yahoo! states that purchasing an Internet Yellow Pages ad compliments your search advertising investment since only an 8% to 9% overlap exists in the use of these site areas. Switchboard’s Canon confirms the lack of redundancy by separating search into these categories:
Cultural search: user initiated on portal; i.e. existentialism, fly-fishing
Commerce search: products and or services search on IYPs; i.e. plumbers, doctors
In June, The Kelsey Group, a research firm specializing in the study of Yellow Pages, released a report called Searching for Profits, which offered some insights for IYP publishers as they attempt to expand their usage in view of the popularity of paid search. These insights included recognizing the speed and reliability of keyword search as an impetus for a forced evolution of the business model. The report also suggests that partnerships with search syndicators to get advertiser information into search results are a necessity. Finally, the analysis proposes that content or listing ownership is less important than whom will ultimately “own” the user.
IYP publishers already are starting to change their spots. Rumors abound relating to big publishers attempting to execute performance-based pricing models resembling paid search. AOL unleashed its IYP bot last month, which allows a user to enter a Yellow Pages category in the Instant Messenger window. This provides a direct link into Yellow Pages listing results based on their account’s geographic area. The same week, Switchboard announced a partnership with Google to provide AdSense contextual search listings on its site after a usage study in the attorney category revealed a need for a performance-based model.
IYP providers are reaching out daily with innovation and the race for local merchant content has just begun. In the end analysis, IYP’s have two choices—they can evolve and prosper, or hold fast to tradition and suffer a slow painful death.
About the author: iMedia search columnist Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. Thrice decorated with the directory industry highest honors for excellence and innovation in online marketing, he is currently Director of Market Development at IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.