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How internet directory services failed

How internet directory services failed Kevin Ryan

About 20 years ago, before widespread access to local cable television advertising, small and medium-sized businesses (SMBs), by and large, advertised in two ways: local directories (including the Yellow Pages) and local newspapers. But time, the internet, and new media have changed all that. Newspaper readership continues to drop drastically, taking classified and other local print advertising with it. Most American cities are becoming one-paper news towns, with the bulk of information being provided by the Associated Press. 

Local directories have adapted somewhat more successfully, with what have come to be known generically as internet yellow pages (IYPs). However, on March 31, Idearc Media (Superpages.com) filed for Chapter 13 bankruptcy. As reported in Adweek, the company plans to convert about $6 billion in debt to "equity for its lenders and reemerge with a healthy balance sheet and some new offerings that its CEO Scott Klein believes will transform the company." But it may be too late.

How IYPs failed SMBs
It's not completely clear what new offerings IYPs are drumming up to pull their directory services back from the brink. One thing is certain: The solution will have to address the local search and search marketing needs of SMBs. After all, it is SMBs -- and not the consumers -- who pay for directory services and generate the bulk of the revenue. Right now, most IYPs do not have a holistic approach to help these businesses create and maintain an online presence so that they are easily accessible to local consumers.

Less is not more when it comes to local search
Consumers favor dynamic search when trying to find the things they need. That's why retailers make up the bulk of internet advertising revenue. Search is now at the top of the conversion funnel for all consumer purchases -- for goods and services. Consumers want to type in one non-branded search term and get everything the internet has to offer: websites, reviews, news articles, etc. They don't want predetermined or suggested results. According to a January blog posting in the Wall Street Journal, consumers are researching even seemingly mundane items, like shampoo, before buying online and offline.

With more than 90 percent of consumers trusting the information they find on the internet more than any other source, SMBs need a more dynamic and integrated solution than directory assistance. It's great if your business appears on SuperPages.com (if that happens to be where your customers are looking). But it's not so great if your same business does not appear in a Google search as well. As much as 84 percent of consumers make Google their primary site and search engine. What SMBs need is a solution that works with every major publisher -- Google, Ask, Yahoo, and MSN.

SMBs need service and business solutions, not just a listing
SMBs are not interactive marketers, and most don't have the budget to hire an interactive agency. According to eMarketer, two of the top three initiatives for small businesses are growing their businesses with already limited resources, and increasing awareness among consumers -- which necessarily implies more search marketing spend. The same report found that small businesses are increasing their online spending and are conducting "segmentation research" to better target their customers.

IYPs have had the local data, the basic tools, and access to the same research as everyone else all along. My question: Why don't IYPs already own this segment of interactive? Instead, many other companies have filled the void, providing campaign performance reports, ways to track activity across all search engines from one application, custom campaigns, behavioral targeting, and more.

How the mighty hath fallen
Though they are trying to catch up now, internet directory services have failed thus far for two reasons: They ignored consumer preferences for dynamic local search, and they failed to help SMBs manage their online presences. SMBs can no longer rely exclusively on such services, Yellow Pages branding or otherwise, because consumers no longer do. From their inception, IYPs had the opportunity to turn their directory services into one-stop-shops for the interactive media needs of SMBs. Hindsight may be 20/20, but I am fairly certain this is one of many decisions that IYPs are regretting.

The modern small business faces enormous challenges in a down-trending economy. SMBs that don't have a local search plan in place now are losing market share to their competitors that do. Now more than ever, to survive and grow, SMBs need locally targeted advertising -- where consumers are actually looking.

Kevin Ryan is chief marketing officer of WebVisible.

Kevin Ryan founded the strategic consulting firm Motivity Marketing in April 2007. Ryan is known throughout the world as an interactive marketing thought leader, particularly in the search marketing arena. Today's Motivity is a group of...

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