News U Can Use – September

These news items are brought to you by Kuk & Baldwin:

WHAT RESTAURANT PATRONS WANT. A marketing survey for the restaurant industry by the NPD Group set out to find what benefits would lure patrons back into dining rooms – and based on extensive patron interviews, it concluded that restaurateurs should consider the following:  (1) promote extra conveniences such as free transportation service; (2) promote freshness of ingredients and good value; (3) offer dishes that can’t be made (or can’t be made easily) at home; (4) determine how their clientele views “affordability”; and (5) “tout” (i.e., market and advertise) the total service experience (Restaurant News, 8/9/10).

SECURITY REVIVAL. Remember fallout shelters from the 50’s?   Well, they’re back (sort of) in the form of underground living shelters to survive natural disasters.   Crime is the real fear, though.   Stats compiled by Rutgers show that home alarm systems ($300 and up) do decrease crime – but 90% of people with alarm systems don’t arm them when they’re home,   giving no protection against the new criminal trend of home invasion.   Invasions have sparked handgun sales, though ($400 and up).   Also big sellers are tasers (where allowed) at about $350; various electronic anti-car theft devices, up to $1000; and window coatings that make glass virtually unbreakable, at a whopping $25 a square foot (Newsmax, 9/10).

STILL BUYING. In an extensive consumer household survey in June (which included a question that asked whether the household had over $100,000 of income), the researchers determined the following planned purchases over the next 6 months:  computer, 12% of all households and 18% of $100,000-plus households; car or light truck (new or used), 11% of all households and 14% of $100,000-plus households; TV set, 10% of all households and 11% of $100,000-plus; home improvement or repair, 7% and 14%; major home appliance, 6% and 10%; and one or more digital cameras, 6% and 6% (Next, 7/12/10).

COMPUTER FIX. For most of us, getting a hiccupping computer working again has a few downsides – like lugging it to the shop, or paying extra for a “house call,” or the frustration of trying to follow directions over the phone.   But now, many problems can be solved remotely online – i.e., techs can diagnose problems, get rid of viruses and annoying error messages, increase computer speed, and deal with other software problems.   Obviously, physical issues such as a malfunctioning keyboard can’t be fixed remotely, but a YP advertiser who can do remote work should list all the major problems he can fix (Personal Journal, 7/22/10).

Find out how to be at the top of your sales performance by clicking on www.kukbaldwin.com.

Other recent media/advertising news:

It’s that time of year again…

According to this year’s American Express Spending & Saving Tracker, the average American family will spend about $550 on back-to-school items this year.  Some more details:

• 80% of consumers with children in pre-school through high school expect to spend either the same (41%) or more (39%) compared to their spending last year
• 94% of parents say they’ll look for ways to stretch their dollars:
  • 76% buying sale or clearance items
  • 63% clipping coupons or watching for store promotions
• Parents are spending on the following categories:
  • 88%, clothing
  • 86%, shoes
  • 85%, school supplies
  • 34%, electronics
  • 45%, cosmetic services
  • 37%, beauty products
• Extracurricular spending will also occur:
  • 35% will have kids play sports (spending an average of $150)
  • only 12% will enroll kids in music lessons (the most expensive extracurricular area, costing an average of $280).

Publishers still can’t raise price for online display ads

Mediaweek reports that Internet display ads are still commanding a lower CPM than four years ago, despite some improvement over the past year.  Solbright, a Web publishing firm says that CPMs increased 9% during the first half of 2010 compared with 2009, it reports. But, the average CPM has fallen by about $6 since 2006, due in part to increasing inventories.

New York Times:  Print revenues decline outpaces digital growth in Q3

The Wall Street Journal recently reported that fellow newspaper publisher New York Times Co., (papers include the New York Times, Boston Globe and International Herald Tribune), will post a loss for the third quarter, per their CEO Janet Robinson. The news follows a slowdown in revenues from digital ads and a continued decline in print advertising dollars. The company’s digital ad business should increase 14% for the quarter, while print revenue will drop by roughly 5%, the company said.

What are we really doing online?

We always seem to be hearing that we’re all online, all the time.  But where is our online time actually spent?  According to new data from Nielson, 40% of U.S. online time is spent on just three activities:  social networking, playing games and emailing.

• 22.7% of U.S. Internet time is spent on social networking (906 million hours)–a 43% rise from last year
• 10.2% of U.S. Internet time is spent on games (407 million hours)
• Only 8.3% of U.S. Internet time is spent on email (329 million hours)– a 28% decline from last year
• 36% of online time is spent communicating (social networks, blogs, personal email and instant messaging).

Notice “shopping” for local products and services doesn’t seem to be as big a thing as some would like you to believe it is.

Study: Mobile phones are the first stop for some shoppers

MediaPost/Online Media Daily reported that so far only a small segment of consumers prefer to shop using their mobile devices, according to a report from Millennial Media and comScore. Among the 8% of survey respondents who use their phones for shopping, 27% said they had shopped via only mobile during the previous month, while the rest reported spreading their spending among mobile, in-store and online.

People – September, 2010

This regular monthly blog sponsored Hawthorne Executive Search is all about people in the Yellow Pages industry. If you have news you want to share about someone that is involved in the Yellow Pages industry (including retirees) that we should all know about, drop us a line and tell us how they are doing. Send your submissions to ken@yptalk.com.

Alfred Mockett:

Effective Sept. 13, Dex One (formerly R.H. Donnelley) appointed Alfred T. Mockett as the new company president and CEO.

Mockett had previously served as president of Memorex Telex, CEO of American Management Systems and CEO of Motive Inc. (Nasdaq: MOTV), and he held several senior management positions during his 10-year stint at BT Group (NYSE: BT), formerly British Telecom.

Mockett stated, “I am very excited to be joining Dex One and see an outstanding opportunity for future growth. Local search is rapidly expanding and local businesses need a partner they can trust to help them select the right mix of solutions, from online business profiles and video ads to mobile search and print advertising.”

Mockett will be charged with leading the company to re-establish itself with a new business model. The company previously specialized in traditional Yellow Page advertising, but is now looking to use a variety of products, such as online and mobile searches, to help connect companies with customers.

Jonathan B. Bulkeley

Dex One Corporation also announced today that Jonathan B. Bulkeley, a member of the company’s Board of Directors, will succeed Alan F. Schultz as non-executive chairman of the Board of Directors. Schultz will remain on the Board.

Bulkeley, a member of the Board since January, served on the company’s executive oversight committee during the CEO search process. He is the founder and chief investment officer of Blue Square Capital Management LLC, which operates a hedge fund that invests in global small and micro cap equities. He also most recently served as CEO of Scanbuy Inc., a global leader in visual navigation for the wireless industry, as well as CEO of barnesandnoble.com and chairman and CEO of Lifeminders.

Kevin F. Bostick

Local Insight Media Holdings announced the appointment of Kevin F. Bostick as its chief financial officer, effective November 10, 2008. Bostick, who has more than 20 years of experience in finance and management, will oversee financial strategy, capital markets, financial operations, treasury, tax, budgeting/reporting and investor relations for Local Insight Media and its operating subsidiaries.

Most recently, Bostick served as chief financial officer of New Global Telecom, Inc., a Denver-based provider of Voice Over IP services. He also served as CFO of My Publisher, Inc., a digital photography book publishing venture. From 2000 to 2005, Bostick held senior management positions with Level 3 Communications, Inc. From 1993 to 2000, he was a vice president in the Media and Telecommunication Investment Banking group at JPMorgan Chase & Co. He began his career as a senior accountant for KPMG.

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About Hawthorne Executive Search

Hawthorne Executive Search, is a full service search and consultancy focused on the advertising, publishing and media industries. With decades of experience, Hawthorne Executive Search is an executive search and management firm that has assisted companies of all sizes in the recruitment and selection of top talent across North America and beyond. Every assignment managed by our firm includes the involvement of a principal, experienced in helping clients build high performance management teams.

With contacts on all levels of the organizational chart, from the senior management or “C” level, to field sales representatives and account executives, we have a database of over 35,000 professionals.

By focusing strictly on one industry, there isn’t a search outside of our comfort zone. We are able to execute most projects within 2-3 weeks from inception. Some examples of successfully completed searches include:

• Media/Account Executives both print and online
• Regional Sales Manager
• Senior Vice President of Client Services
• Production Manager
• National Account Manager
• Vice President of Sales
• Vice President of Business Development
• Account Supervisor
• Media Planner
• Managing Director

Our clients include publishers, both independent and incumbent, CMRs, Internet Yellow Pages and Search Engine Optimization firms, and suppliers to the directory industry.

With a commitment to the Yellow Page industry, our specialization enables us to maintain a 95% completion rate for all engaged projects we undertake.

Please feel free to contact us at:

• Jenny Ciappa – 973-220-7272

Robert Hawthorne – 910-798-1800

Editors Corner –BIA/Kelsey DMS ’10 (Kelsey) Review

The BIA/Kelsey (Kelsey) Directional Media Strategies 2010 Conference in Dallas was held last week, another solid effort in both execution and content for the BIA/Kelsey folks.

While there are any number of places you can go to read more detailed reviews (Kelsey Blog, YPA, and Search Engine Land), this effort is intended to offer some high level observations you probably won’t find anywhere else.

If there was one theme that dominated the conference, it was the overweighed discussion of the emerging/developing digital and mobile platforms which will supposedly change the way we shop.  The Kelsey research presented showed that local businesses are now spending more advertising dollars on digital/online media than “traditional media”.  For example, Steve Marshall, Kelsey’s research director, shared results of the annual Local Commerce Monitor survey (up to 2009 as 2010 results are held for their clients) which indicated that advertisers are also increasingly “restless” as they try to adapt to a world where consumers now have a growing number of media choices they can now use to search for local products and services. In Q1 2010, consumers used 7.9 media sources when shopping locally, up from the 5.6 media sources used in Q1 2007— a pretty significant leap in just 3 years.  With all that said, I left many of the sessions with the feeling that this was still a lot of technology in search of a viable business market.  No doubt, the newer digital media will evolve.  The questions I still have are when and how far.

Here’s just one example:  Mike Wilson, the GM/VP of Digital Media for Yellow Book, demoed an iPad tablet application.  If you haven’t seen these iPad’s close up, they are really neat devices.  And while it is exciting to see a company like Yellow Book test an iPad apps which includes things like embedded video, links to local business websites, and the ability to contact a local business via Skype, how long will it be before a publisher can really significantly leverage the opportunity??

Kelsey conferences are notable (notorious?) for being the one conference where numerous future predictions are bantered about freely.  This conference was not different.  Here are several of their predictions with my thoughts following:

Under the main title of “By 2015”:

• Most marketers will be at 50% or more of the revenues coming from digital – so it’s still going to take 5+ more years for digital revenue to catch up to print??  We all know how accurate long term predictions can be. Sounds to me like print has a lot of runway left to go
• Some of the current publishers will be acquired/de-merged/seriously overhauled – probably going to be true if this economy keeps bumbling along.  The two that have been restructured already DEX One (aka RH Donnelley) and SuperMedia (aka Idearc) have already experienced significant price drops in their new, reissued stock already, and their debt loads while reduced, weren’t totally eliminated.  Even independent goliath Yellow Book parent Yell has been under a cloud since last year due to exceptional weak conditions in some of their other markets like Spain.
• Business will be a leads based selling environment – hasn’t it always been that?  The only difference is the industry is now selling leads over a wider range of platforms.
• Term “Yellow Pages” will be seldom used in their names, business descriptions or promotion efforts – unfortunately this is already evolving to be a true state.  And it’s the one that to me is incredibly short sighted.  Keep reading.

"Let your fingers do the walking"

Of course predictions of the demise of the Yellow Pages brand have been ongoing for years – here’s a more recent one – “Is Yellow Pages Becoming An Obsolete Concept?”.  The term “yellow pages” is as generic as “coke” or “Xerox”.  It’s perfectly understandable the future will most certain be a marketplace where multiple distribution channels will be available – print, online, mobile, and whatever will be the next new thing.  But to give up a brand identity as strong as “yellow pages” and even the walking fingers logo??  By doing this I think the industry cedes creditability to any new entry that has the deep pockets needed to establish a new brand identity.

Here’s a great example of what I mean by this – at this recent Kelsey event, a small number of suppliers rim the outside of the primary meet and greet areas (about 20 in total).  Of the 20 that were exhibiting at the conference, I could see only one (Acxiom) that was actually at the same conference just two years ago.  Net net:  we have lot of new start-ups with perhaps great technology or business models, but these are still products or services that will require any publisher to do a lot more education with potential users and advertisers.  If it was just called another type of “yellow pages” wouldn’t the discussion be jump started to the all important value conversation, and not the often long education process on exactly what it is you are selling, and why do I need it.

My final comment about the conference was that there was a noticeable lack of independent publishers on those panels where “experts” were discussing the current status or future of the industry.  I thought this a little strange as many of the independents are still showing positive market gains even in a tough economic client.  Perhaps they could have provided some real world success insights at a time when most media are struggled to match last year’s results and many of the larger industry publishers view a -10% campaign as the new positive.  For example, one speaker even acknowledged he knew absolutely nothing about the industry.  You can imagine I was really excited to hear what earth shaking comments he was going to offer.  Instead, after hearing that it seemed like a good time to get a coffee refill.

And lastly a great job shout-out to the Kelsey staff for putting together another great event.

Look for more about the print environmental issues discussed at the conference in the next blog…..

Co-Op Advertising – A Largely Untapped Source of Revenue

At a time when every publisher is scrambling for the chance to grow their revenues, why are less than 50% of all co-op program dollars still not being used??

You read that right – less than 50% of the available co-op advertising dollars are going unused.  Talk about money being left on the table by publishers, but also by business owners who could be realizing the benefit of more/bigger ad programs if they only knew the money was available.  And for you in sales – that also means unearned commissions.

First a quick primer – exactly what is “Co-op” advertising?  Co-op advertising is when a manufacturer or distributor helps promote the sales of their products/services by sharing the cost of advertising with local dealers or retailers in exchange for placing their logo and/or product illustration in that dealers/retails local ads.

You have all seen examples – a heating/air conditioning repair service that works on Trane systems.  A local garage door repair service with a LiftMaster logo in their ads.  A car repair shop with the BMW logo in their ad.  These are all examples of ad where that local business gets some reimbursement for the cost of the ad directly from the supplier/manufacturer.

The Yellow Page industry provides a significant opportunity for national manufacturers and distributors to partner with local dealers where an estimated $1.5+ billion dollars is available in Co-Op every year.   Val Onyski who coordinates the Co-op program for YPA indicated that over 1900 brands are currently involved in the program.  YPA members can also enjoy the benefits of a service bureau provided by the Association to help make the whole process smoother and less complex for the sales reps.

With manufactures wanting to reward their best distributors, there has been an increase in the number of informal co-op plans.  These programs are similar to the traditional program except that no formal guidelines are provided.  Instead, the program is handled on a case-by-case basis between the advertiser and the distributor/manufacturer.

Sure, at the root of this program it’s all about making more money.  But don’t forget that by combining the image, the brand name, and even the creative presentation of a recognized national brand with the personalization of local dealers, Co-Op advertising is a really cost-effective way to create greater awareness and interest in those local businesses.

For more information and background on Co-op, you can visit the YPA website here, or contact Val Onyski directly at 248 244-0731.