I’m back from a week’s vacation and have a collection of news tidbits accrued during my travels that further highlight why this industry needs to take a step back and sort through all the recent noise about how Yellow Pages is really being viewed by consumers and small business owners.
The first data point actually has nothing to do directly with the Yellow Page industry, but in another way, does. This comes from Hollywood — reports indicate that ticket sales at North American cinemas declined an estimated 3%, to $4.28 billion, for the period from the first full weekend in May to Labor Day, compared with the period a year earlier (source). The culprit – it is the economy, stupid. This recession/depression/high unemployment (or whatever you want to call it) economy continues to just drift along like a boat without a rudder or engine. So while a lot of “experts” are pronouncing the end of the Yellow Page industry due to declining revenues, in reality many small business owners are still suffering and fighting through lower sales from prior years. In the case of consumers, when incomes are down and unemployment is up, things like spending on going to the movies are one of the first casualties. Yet I don’t see “experts” viewing that as a sign of the imminent collapse of the movie theatre business. But somehow slow Yellow Page advertising sales in this down economy are consider the start of a death knee. Really?
Data point two is a similar economy indicator and industry comparison point. FedEx has just issued a profit warning due to weak global economy (source). The company slashed its FQ1 EPS forecast to $1.37-$1.43 from an earlier estimate of $1.45-$1.60 and the current period could represent FedEx’s first quarterly decline since 2009. In its comments, the company indicated that “…weakness in the global economy constrained revenue growth at FedEx Express more than expected in earlier guidance.” Once again, I don’t think any “expert” is viewing this dip in earnings as a signal of the demise of express mail services due to what FedEx said. Simply put, the economy just plain sucks right now. There are some bright spots out there, but overall the economic funk continues.
Data point three has two parts – the first is the realization that the value of Facebook has now dropped some $40 BILLION since its IPO. Let’s combine that with the news that more bad news from digital “experts” darling Groupon where several of the co-founders of CityDeal, the Samwer-backed European clone that was acquired by Groupon in 2010, have decided to depart the company. These aren’t the first defections of senior management from the company. The key question for this data point — if all of these new digital advertising media are such great deals for SMB’s, shouldn’t these flagship digital providers be raking in the cash, and not be looking like sinking ships listing badly to port?
Which brings me to the next data point – the continuance of bogus Yellow Pages billing. Rarely does a week go by that I do not see at least one warning about bogus Yellow Page billings being sent to small business owners. For example, here is one in San Francisco, and another in Amarillo just this past week. What I find interesting about these schemes is that if SMB’s are so disenchanted with Yellow Pages advertising results, how could they be so naïve to then pay an incoming bill, just because it has a Yellow Pages logo of some type on it? Despite what online and social media “experts” say, could it be that those old fashion print Yellow Pages still bring leads/business to their doors?
The answer to the last question is still a resounding “YES”. Here is another recent study initiated by Haines Publishing, which found that 80% of residents in Ross and Pickaway Counties, Ohio use the print yellow pages first when looking for local business information (source).
When you add all of this up, it indicates that right now, this crappy economy is affecting all advertising. And it also indicates that SMB’s should not give up their print Yellow Pages positions just for a less expensive (sometimes), sexier (perception vs. reality), new digital platform, especially without verifying that the new digital advertising effort is going to yield the same quality leads that print still generate. Perhaps the solution lies not in a print OR digital discussion. Instead, it should be a print AND digital solution for SMB’s. Sure, get a nice website up, play with Twitter, Facebook, Groupon, or whatever. However, don’t give up your core position in print Yellow Pages, not when we are seeing call tracking results up over 15% YOY. Why would any SMB want to take the risk of losing any business in this current economic climate?