Category Archives: Editors Corner

Sometimes the view from a lofty perch is not the best view..

I was slow in responding to this biting commentary as we were working with local small businesses on our New Smyrna book, but couldn’t pass up the opportunity to share some of the weird, warped impressions some have from their lofty perches high atop the Internet.  It’s a classic.  It’s a little long but worth reading.

Here is the original comment I received in it’s entirety, unedited from “Ella”:

Ken,
You are most definitely a great salesperson any company would love to have on their payroll. Having said that, you are promoting an almost obsolete product using skewed stats that for all I know are based on a remote part somewhere in the USA that has limited access to internet or maybe, from various senior retirement communities where they don’t know how to use modern day technology. I can personally attest that in my employment background screening industry where we deal with tech savvy business, none of our potential clients would look for an employment screening company out of the YP also given the fact that we service a nationwide market rather than a restricted local market. I’m sure that most YP sales persons who are making a somewhat decent living, in my opinion have to be:
1. Very aggressive (maybe even heartless when selling to mom and pops)
2. Carry a fancy brochure with dizzying stats, comparisons YP vs. Internet, ROI’s and so forth. Obviously, the presentation is very elaborate and systematically methodical (always BE CLOSING).
3. Asking the clients questions whereby they end up trapping themselves into an ironclad contract that automatically renews itself (hey, we got a live one here!)
In conclusion, maybe YP may work as a short lived miracle for a very limited some, but not for the majority of business out there. I remember back in the early days of the internet, YP would compete by offering clients results based pricing using a metered phone line and soon realized the writing on the wall. In a real-life scenario, But then again, you appear to be a great sposkeman/sales person for the YP industry.
Question: Would you sell a $800 a month ad to your own family member that say had a struggling print shop or any other storefront type?

And my response:

Ella:

Sorry for the slow response as we were closing another successful local print yellow pages, which grew from last year, so we were more than busy.

So let’s see, where do I start?  You obviously haven’t left your lofty perch to get out into the market to understand what it is we do.  But let’s break down your comments:

an almost obsolete product“:  if that was true can you explain how one of local plumbers gets over 110 calls a month on their call tracking line, the number for which only appears in their print YP ad??  Or how about the storage yard that gets 2/3rds of all their calls from their ad based on their manual recording of each call they get, as it also has a call tracking number in the ad??

Carry a fancy brochure with dizzying stats, comparisons YP vs. Internet, ROI’s and so forth“:  Sorry to disappoint you but the only thing my people and I walk in with is the book, the current call tracking data, and a stack of testimonials we get from the usage contest we run in the book.  All of that is printed on regular paper using my cheap inkjet printer.   The presentation is neither elaborate nor “systematically methodical”.  It is a discussion about where there business is, where are they looking to go with it, and how can we help them.  In most cases, we can help.  There are some businesses that are more wholesale/middle men in an established process, in which case, the product can’t do a lot for them but we still recommend they have a bold listing or small in-column ad with relevant info like websites, fax numbers, and other key contact information.  And then there are businesses like yours that really aren’t used by local small businesses – as you noted in your own comments.   But you also missed the key point that we are more than just print.  Everything we do in print is also online at www.SmallPondYP.com .

“…end up trapping themselves into an ironclad contract that automatically renews itself (hey, we got a live one here!)”:   Our advertising rates cover a full year cycle, in most cases.  That makes sense since the book is on the street for a year.  But we do have other products that run for different lengths.  We also don’t do “autor renew”.  Each year (or more often) we again visit with those local businesses (as in go their stores/offices/job sites/etc) to discuss what’s changed and how we can help them change/update their advertising message.  We don’t call.  We go meet them, face-to-face.   And I don’t think we’ve ever held a gun to any ones head to get them to sign the contract.  In fact, I review the entire contract before I hand them the pen to sign it.

So let me address your main question:

Question: Would you sell a $800 a month ad to your own family member that say had a struggling print shop or any other storefront type?

Answer:  If after meeting with them to understand why they had a “struggling” business, and our products were a fit for their core customers, YES, without hesitation.

But you also are naïve in that I don’t have an ad that cost’s $800/month unless you want to buy a cover ad, which I would probably never recommend to a “struggling” business, and to be honest, the cover ads are all sold.  None are available.

Now Ella, since you didn’t do your homework, you would probably have not noticed that I spent over 10 years in the recruiting world.  I can tell you that we encountered numerous “employment background screening” companies and we consistently found aggressive tactics to woo unqualified candidates just so they had fresh meat to tee up for a client, rampant misuse of candidate data, and inconsistent screening.  Hopefully you don’t work of one of those type companies.

If you do, we have half dozen reputable local companies listed in our print directory that you can call…

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Changes at YP Talk

Regular followers have noticed that YP Talk has been silent for several months now.  But it’s not without cause.

When you believe strongly in something, there are times when you have to step forward, plant a flag, and makes good things happen.  YP Talk has been silent because I recently acquired a small print and online Yellow Page operation in central Florida.  In this everything digital world many people want us to believe in, one has to ask, am I crazy?  I will let you the readers of YP Talk decide.  Here is the full story on the some compelling factors behind my acquisition.

  • First, it’s in Florida.  After three years in Kansas, while the people there are very nice, and having a chance to work for the Brock’s at Names & Numbers was certainly a pleasure, it was nice to sell our snow shovels at our final yard sale before moving
  • The books are LOCAL books.  We focus on LOCAL businesses.  In the Alarms section you will not see any ads from ADT – instead you will find the local alarm company Security Center.  In carpet cleaning, no Stanly Steamer, instead you will find Carpet Pro based here in Port Orange.  In the florists, no 800-Flowers, instead Port Orange Florist.  It doesn’t mean that I wouldn’t accept an ad from a national company.  But they need to have a strong local presence
  • All of the ad programs are bundles.  Buy a half page; get a dollar bill sized in another heading.  Online is bundled with print.  Add it all up — it comes to better VALUE for that local businesses advertising dollar as they can capture ready to buy customers no matter what format they are looking for them in.
  • We include white pages in the books, and in a format and font size you can actually read without a microscope.  We have many features which make the book a valuable RESOURCE for local consumers
  • The covers feature local art and photography
  • And most importantly, we have FAMILY here in the area.  It’s nice to be back on the east coast where most family is within driving distance of us.

Of course, half of the conversations I have with those local businesses start with them telling me that print is obsolete.  I nod my head and smile, but then ask that if that is true, how is Coleman Plumbing able to get OVER 100 calls a month from the call tracking number in their ad??  Or that local dentist, who has a very specialized practice bringing in 30-40 calls a month on his RCF??  Keep in mind anyone that gets in his chair is going to be spending over $1,500.  I then ask them to explain what I should make of the 6-10 calls we get a week from consumers asking for another copy of the book.  Note this isn’t New York city – there are only 25,000 households in the area.  If that isn’t enough, we run a contest which appears on the last page of the book where consumers can send us a list of businesses they found and use from the book, and we’ll enter them into a contest for a new TV.  The pile of responses is several inches thick.

When the VCR was invented, they predicted the end of movie theatres.   After that, the higher quality DVD will definitely kill those theatres now.  Well then along came Blue Ray which is so advanced, and we all have 100” big screen TV’s, so surely now we never go to those “obsolete” movie theaters do we?  I guess those $10.8 BILLION in ticket sales didn’t really happen then (source)?

We all have many choices and sources available to us when we are ready to make a buying decision.  Print and online yellow pages are just one of them.  I have had enough of apologizing for the industry, for the printing of millions of books each year (on recycled materials), for investing big bucks into online products that aren’t Google.  We provide a valuable service to local small businesses.  If you don’t believe me, come ride with me on a sales call where a frazzled small business owner looks you in the eye and admits they don’t have a clue on how to market their small business within the limited budget they have and can afford.  It takes a lot of courage for them to admit that.

For those that insist it has to be all digital, I sat fine.  But if I can’t help that local business define what they are about in the size of half page or quarter page print ad, how on earth are they going to know what/how to say in whatever digital format you think “everyone” uses?

At end of day, it’s not print OR digital.  It’s all about defining the key value message that business offers, no matter the platform, and then getting that message out.

So what does this acquisition mean for YP Talk?  For one thing after over nine years of writing this newsletter, this will be the last email I will push your way.  It’s not that I don’t think there are a lot of important topics related to this business to discuss – exactly the opposite.  It’s just that there aren’t enough hours in the day/week when you are the sales department, production, finance, marketing, and senior management.

I will continue to post my thoughts on this YP Talk blog from time to time. But mostly this message was just to tell all of you, thank you.  Thank you for your support.  Thank you for your comments both pro and con.  Thank you for the feedback on how you used the information we provided here.  There was nothing more gratifying then to bump into someone who mentioned they used an article to kick off a sales meeting, or sent another article to the marketing group asking how come we don’t have this.

Thank you to the suppliers that help make this industry what it is.  Their advertising support for this newsletter was key to so I could do this, and I really enjoyed hearing about all the new things they brought to the table.  It forced me to be current.

And lastly a big thank you to friends and family who also tolerated many years of me having to go run off and create a newsletter when I probably should have been spending more time with them.  Now I just bore them to death with my efforts as a local Yellow Page publisher.

And for those worried about the future – don’t be.  You will find as I have, that about every 5 years or so you will be reinventing yourself as the marketplace changes, as companies change, as technology changes, even as you change.  But do count your blessings as you are now working in the most exciting industry out there, one that is changing for sure, but still brings huge value to every community and business it touches.  How many industries can say that?

Peace be with you.

The Facts Are The Facts, And They Are Not in Dispute

I borrowed this title from actor Kevin Bacon’s statement in the “Few Good Men” movie, but it applies in this case.  I’m sure you see them all the time too.  I get 4 or 5 of these types of incoming comments each week.  Most are bogus or just pure spam.  But these two made me laugh since they are contrary to what the call tracking data is telling us about print Yellow Page usage:

“Yellow Pages are obsolete”

The following comment was posted on the YP Talk comment area:

I was googling “why do yellow pages still exist” and I was delighted to find this hilarious article desperately defending them instead. It’s like reading someone trying to defend the slide rule. Sorry buddy, but technology has made yellow pages obsolete. They provide no value, but they do kill a lot of trees. Mobile phones with internet access are now dirt cheap and ubiquitous, providing the same information to people. Even my grandmother has a cell phone. Nobody in their right mind would use the yellow pages, other than as kindling or paper weight.

My response, while trying to be somewhat diplomatic was as follows:

 Thank you for your commentary. It’s comments like this that show exactly why the print yellow pages still work as you clearly had already decided on the answer you wanted to hear before you even did your Google search.

I can only assume you missed the article which showed that 76% of all adults do still use the printed YP each year. Or the one about how 85% of those people who do use a book make a purchase once they pick it up. Or that advertisers are seeing AT LEAST a $10 to $1 return for their advertising investments. Perhaps you also missed the article about how call tracking results for print ads have shown INCREASES in the number of calls over the last two years. But even if you had seen that, I doubt you would believe it.

So maybe the better approach with someone like you who appears to only believe what they see at the end of the arm, how do you think all that mobile stuff got there, especially the parts from local businesses??  Answer: yellow page reps working with those businesses that get them listed where ever their clients might be. Print, online, mobile — that’s the definition of “Yellow Pages” these days…

I had really wanted to be much wittier in my response, but the facts are the facts….

How shallow can I be:

This other one came across my radar screen and it sounds like it was a man on the street type interview from an Aussie city.  They are easy to do – let’s find a cross section of people who don’t fit the demographics of a typical small business in the print or online Yellow Pages, who probably aren’t experiencing the life events that drive usage, and then ask them leading questions:

Do People Use Yellowpages Anymore? – YouTube Do People Still Use The Yellow Pages?  http://www.youtube.com/watch?v=_psVGi-pEQc

Note how many of these people commented that page 1 of a Google results page is the extent they will go when looking for local businesses.  I don’t know about you, but if I’m spending $15,000+ on a new roof, need an experienced dental surgeon, a local limousine service for a special night out, or have to have my air conditioning system repaired, I don’t think I’m going to limit myself to the just the results Google choses to give me on the first page of a search.   That seems a bit shallow to me.  What about you??

Looks like a perfect opportunity for one of or two industry associations to develop a similar video which shows the exact opposite, with real people who spend real money for real products and services – that’s the real power of yellow……

 

 

How can the industry collaborate?

Just got back from the Local Search Association annual conference, and once again I heard a lot suggesting/pleading/begging from various speakers that the industry really needs to think differently, act differently, and most importantly collaborate better.

In the 25+ years I have been in the industry, the one thing you can be guaranteed to hear at an industry conference is that the industry needs to work together.  Conceptually, everyone agrees that all boats will rise if the overall industry can grow.  But usually within 10 minutes of arriving back in the home office, the issues of the moment take over and that whole collaboration thing gets filed away for another year.  Perhaps now more so than in the past, we can’t let that happen.

I don’t think anyone would disagree that today the industry faces massive change both internally and from forces external to the industry.  It wasn’t very long ago that there were usually three, four, five or more print directories in a market and that was it.  Then about ten or so years ago, this “digital” thing started, and toss in a prolonged business slowdown (some would even call it a recession), and small business owners/marketers have had to change their attitudes and philosophies about promoting their businesses to often just keep their lights on, and maybe even pray they could grow a little.

Industry collaborations are possible, and can be very successful.  got milk 1For example, remember the got milk” campaign?  Often hailed as one of the most successful ad campaigns in marketing history, got milk? was launched in 1993 when fluid milk processors in California agreed to allocate $.03 of each gallon sold to fund an overall promotion effort. The campaign was licensed nationally in 1995 for use in print ads featuring celebrities with “milk mustaches.”got milk 2

The program still continues to this day with an interactive website promoting various health benefits.  The campaign is managed by the National Fluid Milk Processor Promotion Board, which has an approximate annual budget of $110 million.

Another example is the “Pork: The Other White Meat” effort from pork other white meatthe National Pork Board.  This original campaign, which is often cited as one of the most memorable campaigns of all time, was intended to promoted pork as a healthy meat option.  Realistically, as the National Pork Board acknowledged it was really an effort to stem the steady decline in pork sales.

The original $7 million budget in 1987 contrasted to the $30 million spent primarily on network   television ads for the “Beef. It’s What’s for Dinner” campaign from the National Cattlemen’s Beef Association, and the $112 million spent on ads for branded chickens.  Using this program promoting pork as a lean meat to more health-conscious consumers, pork sales in the United States rose 20%, reaching $30 billion annually by 1991

This year the Pork Board is launching its new $11 million Pork: Be Inspired campaign, which aims to increase sales by targeting customers who already eat pork.

So there are examples where industry players, competitors in effect, have banded together to promote their overall value, and as a result everyone in the industry saw higher sales.

Which brings us back to our beloved Yellow Pages industry, and to you the readers of this newsletter.  The topic for discussion is simply:

  1. How can the industry work together?  Now, not a year from now, but right now, to show the outstanding value we bring to advertisers??
  2.  What steps are needed?? 
  3.  Who needs to get together in a room to start to make this happen??

We want you views and suggestions, and if you’re worried about your company not being pleased to see your name (or the company’s) in the comments, we’ll block them out and change names.  But the clock is ticking…

Send me your thoughts at ken@yptalk.com..

 

 

Mom and Pop Still Not Advertising Online

As reported on AllThingsD.com those small business/mom-and-pop shops still aren’t flocking to the Web with their advertising.  According to a new survey conducted last fall by the Boston Consulting Group only 3 percent of small-business ad dollars are going online.

The numbers come from a survey of 550 small companies, and shouldn’t come as a complete surprise to anyone who has watched the struggle many US based publishers have had trying to break into the digital ad market for many, many years.

As the article author Peter Kafka notes:

“..With the notable exception of Groupon and other daily deal companies, most of the Internet guys like to advertise their advertising on the Internet. And their platonic ideal for a transaction is the self-serve model, where humans never have to talk to each other. Meanwhile lots of traditional business still gets done in analog form, via phone calls and feet on the street”

and even those “no-one-uses-them-anymore”print Yellow Pages which continue to see increased call tracking volume year over year.

Granted that when small businesses do spend their money, Google is drawing the majority of it (according to BCG), with the popularity of other sites ranked this way:

  • “Other” search engines,
  • Yelp,
  • Facebook,
  • Yahoo! Local,
  • YP.com (formerly yellowpages.com),
  • Twitter,
  • LinkedIn, and
  • Superpages.com

Does this mean that many Yellow Page publishers are chasing a digital mirage, or is it a tsunami just waiting to happen????

My take: 

  1. Print is still faster (do a test to find an emergency plumber in your town who provides free estimates on weekends, has been in business at least 10 years, and has a Better Business Bureau rating),
  2. Easier (no Internet or mobile connection needed)
  3. Print ads provide greater context especially for products/services you buy infrequently (e.g. a replacement roof) – you find out a lot more from a full page ad than an in-column ad.  It sends a message to the consumer

Don’t get me wrong – love the Internet and mobile.  They are great for research.  But when it comes to a real local buying decision — print does more, and better.  Over time, things may change.  But first Mom and Pop need to see that more business is coming from digital before they will make the leap.

Yellow Pages = print, online, and mobile

Natural disasters and Print Yellow Pages

No one ever uses the print yellow pages.  Everything is available online so print is a waste.  I haven’t looked at a print directory in years.

Do these comments sound familiar?  They are the kinds of comments you will see from print naysayers all across the internet.  Those of us who work in the industry and see the incredible results it brings for SMB’s day in, day out, know these comments aren’t true.  So how can we prove the negative Nellie’s wrong?  It only takes one of those life events, better known as a natural disaster.

Below we are posting the entire blog from Amy Rybczynski of the DAC Group.  She goes through several recent natural disasters including the most recent event known to us as Hurricane Sandy, a storm so powerful that many people are still struggling with its aftermath months later.

What did Ann uncover?  Calls to tracked ads jumped dramatically after one of these weather events occur as people scramble to rebuild, replace, and reestablish their lives, businesses, and communities.  As is the case in many storms like Sandy, cell towers were wiped out, power was lost, and the internet is just a memory from the past.  The bold lettering in the article has been added to draw your attention to the power of Yellow Pages in tough times like these.  Good job Amy.

***************************************************************

Superstorm Sandy Drove Yellow Pages Usage
Amy Rybczynski – Wednesday, January 9, 2013

Back in August I blogged about how our testing program for a waterproofing client gave us a clear view of the effectiveness of print Yellow Pages after Hurricane Irene and Tropical Storm Lee hit the East Coast and mid-Atlantic region late in the summer of 2011.

Calls to the advertiser’s tracked lines went through the roof in the months that followed the storms, registering in 220% more calls in September 2011 than in the previous September, despite the fact that we were tracking 25% less lines. Call counts stayed higher than usual for the months that followed, gradually coming back to average levels early in 2012. Undoubtedly there was a lot of residual cleanup to do after the storms passed through, lasting months after the initial impact, and our call data reflects that. And while we don’t have any proof of this, it’s not a stretch to assume that some of the later callers were among those that had suffered losses and recovered, then decided to take preventative action on their newly restored properties.

In late October 2012, many of the same areas were hit with another major storm, this time Superstorm Sandy. I was interested to see how our testing would look this time around, given that the worst damage was once again within our client’s main market area. At first glance, the results weren’t nearly as obvious as they were after Irene, but the damage this time around was concentrated more in New York, New Jersey, and Maryland, rather than being widespread across the advertiser’s entire market area.

However, when I dug down into regional data, it was apparent that the storm had an impact on call volumes to the advertiser’s test lines in the most affected areas. The rise began in late October, even before the storm hit, which could indicate that the advance warning of the storm provided by weather experts may have led to preventative maintenance calls. In fact, looking at data across all markets, calls started to rise on October 25th, four days before the storm hit, and remained high through November 8th.

In looking at individual regions, we can see that calls increased dramatically. In Maryland, there were twice as many calls per active test line in October than in September. The rate remained nearly steady for November as well. Calls for each month were just about double normal levels. New Jersey saw a similar jump, with double the calls and over 40% more calls per test line. Interestingly, New York didn’t see a rise until November, at which point they saw a 47% jump in calls and a 77% jump in calls per test line. The delay may be attributable to numerous power outages in the area and that it took a while for a lot of people to return to their homes. Based on what we saw in the aftermath of Irene, we can certainly assume that this jump in activity may continue well into December and beyond, as well.

The phone lines used in these tests were unique to print Yellow Pages directories, so we know that these calls were all the direct result of a print Yellow Pages reference. While we’re all well aware that our society is becoming increasingly reliant on technology, this call data shows that the print Yellow Pages are still very much in use, particularly when life events (or major superstorms) strike.

Amy Rybczynski, Marketing Research Analyst

 

2013 Predictions for Small and Midsize Businesses

Instead of a list of my predictions for 2013, most of which will be quickly forgotten, let’s instead look at the business environment facing small and midsize businesses, the lifeblood of print, online, and mobile Yellow Pages in this New Year.

Because there are many components needed to properly analyzing this issue, we are going to do this is a two-part review. In this part one, we will look at some of the macroeconomic drivers impacting the economy and by definition, the advertising decisions of SMB’s.  In part two, we will project some of the likely changes that SMB’s will make in the face of this economic forecast.

Several articles were used in this assessment:  recent reports/articles from the ADP Research Institute (Top Concerns of Business Leaders in the Post 2008 Economy), the WSJ/Vistage Small Business CEO Survey, and other news articles, which we will source as used.

Part one- The Big Picture

So what promise does 2013 hold for SMB’s?  The headlines from many of the sources we looked at have not been overly optimistic.

  • Small businesses: “It’s likely to be a year of painful decision-making for small-business owners…”      <WSJ/Vistage>
  • Midsize businesses: “..the near meltdown of the US economy in 2008, followed by years of high unemployment and ongoing global unease, continues to affect businesses of all sizes today.  Any notion of a sustainable “recovery” is mixed at best.…” <ADP>
  • Overall economy:  “The Federal Reserve predicts the economy to grow at a rate somewhere between 2.1 and 3 percent in 2013. That’s better than the GDP growth rate we experienced in the first half of 2012, but not what we need to turn the economy around….”  <Fox Business Network>

However, once you dig beneath the headlines you can find some optimism amongst SMB’s as we start 2013. For example, the ADP report notes that 52% of business owners and executives perceive the economy has improved within the last four years.   An additional indication of midsize business owner optimism was shown in hiring, were 43% indicated they would be increasing headcount in the next year.

Let’s keep dig down a little deeper to see what these business owners are saying, starting first with small-business owners.

Small Businesses:

The WSJ/Vistage study covered the heads of 926 small firms in a range of industries, all of them with less than $20 million in annual revenue.  The three major challenges facing small business owners today are:

  1. increased taxation,
  2. the challenge the new healthcare law will bring,
  3. and financing.

On taxes, despite all of the discussion about the fiscal cliff and its recent resolution, the reality is many of small business owners claim business profits under their personal income taxes and will be greatly affected by higher tax rates in 2013. In the compromise passed by Congress, for those earning over $400,000 year the tax rate will rise from 39.6% from 35% on personal income.  What that means is that while corporations like Walmart will be paying 35% rates, small business owners could be taxed at the higher 39.6% rate.

In a 2011 study, the Treasury Department found that raising taxes on incomes over half a million will impact roughly 750,000 small businesses organized as “S” corps, partnerships, and other small entities. “S” corporations are businesses in which shareholders report profits and losses on the individual owners income tax returns, so while the owner may not actually be taking home that half a million, the income line will reflect the company results and project them into the higher bracket.  Given that many S corps have by definition multiple owners, it would be fair to take that 750,000 small business number and multiple it by a factor of at least 3 to 4 to come up with the exact number of people affected by these changes.

And how are small businesses expected to react to these tax increases?  About 29% of the small business leaders plan to hire fewer workers.  32% expect that they will have lower investment spending with fewer purchases on things such as vehicles, property, and equipment.   Strategies that other larger businesses might use such as moving their business to the Cayman Islands or other tax havens are not feasible as the legal fees would be too steep.  In addition, some of these businesses might want to think about a change in structure, but would face other tax challenges under a different corporate structure according to accountants.

Regarding the healthcare challenge, small-business owners with more than 50 employees now have just 12 months to prepare for new rules that will be implemented in 2014, or potentially pay a penalty. Most experts believe that businesses that employ just under 50 workers will think long and hard about adding new staff.  For those who must comply with the law, national and state “health exchanges” will be established. Through them, small business owners will figure out their rates insurance plans and pricing.

A tremendous amount of uncertainty still remains on the application of this healthcare law.   For example, for a small business owner which has just under 50 employees, are independent contractors counted in the employee count or not? Owners are also waiting for guidance on the types of plans and need offer to meet the lost minimum requirements.  Only 14% of the business owners said they had a clear understanding of the health-care law, according to The Wall Street Journal /Vistage Small Business CEO survey in December.  With all the confusion, most business owners have discussed freezing hiring and or expansion plans until the requirements are clear.

One of the brighter spots for small business is that it appears that banks are loosening requirements for commercial and industrial loans. According to the monthly Biz2Credit Small Business Lending Index, big banks (defined as having $10 billion+ in assets) are approving a little more than 10% of small business loan requests. That’s much better than the worst days of the 2008-09 recession, but still far below better times.  Reports show smaller banks are granting about half of the requests for capital that they receive and are increasing the number of SBA-backed loans they make.  Credit unions are doing better, approving slightly more than that.

The still leaves plenty of business owners on the sidelines waiting for capital to be able to make a move. With much-needed capital, businesses could expand their business operations and hence, would be expected to consider increasing their advertising expenditures to ramp up sales.

While advertising is not specifically addressed in any of these articles, one has to believe that the budget for advertising for small businesses will have limited potential for upward adjustment, and more likely will be maintained at current levels at best.

Midsize businesses:

While the concerns and needs of midsize businesses are not dramatically different from smaller businesses, here are the top three concerns of midsize business owners identified in the ADP study:

  1. rising cost of healthcare coverage/benefits,
  2. slow economic growth,
  3. and the volume/level of government regulations that they face.

Of note is that smaller midsized organizations (those with 5 -50 employees) are more than twice as likely to expect improvement over the next 12 months than these larger midsized counterparts (those with 151 to 999 employees), 17% versus 8%. While midsize businesses reported much less improvement within their industries over the past four years (37%) than in the economy as a whole (52%), they are much more optimistic about the outlook for the industry over the next 12 months, with nearly 47% expecting improvement.

A more positive note for the Yellow Pages industry is that when these companies were asked about their own businesses, a similar number (48%) expect their budgets or revenues to increase over the next 12 months.

Despite their concerns regarding the near future of the US economy, another positive note was more than 43% anticipate increasing the number of employees within the coming year. Across all different levels of midsize companies the average number of new hires was about 18.

Within their specific industries, 54% of respondents indicated that there has been an increase in the level of competition within their industry in the last 12 months, especially in the larger midsized companies (those with 151 to 999 employees) according to 61% of respondents.

Conclusions – Part 1:

While there are still a great number of uncertainties ahead for both small and midsize businesses as we begin 2013, what is clear is that these SMB companies will need to actively look for ways to increase their sales, despite such uncertain times. The hope for the industry is that they understand that a comprehensive advertising program in both print, online, and mobile Yellow Pages can be part of those solutions in the coming year.

Look for part two of this article in the next version of YP Talk.