View articles are intended to be limited to interviews with the most senior leaders in the industry. This month we continue the series in a recent interview with Oscar Sousa Marques, the CEO of Directel Macau Ltd.
If you have the chance to visit Macau, you should jump at. The small island has a rich history dating back to the Qin Dynasty (221–206 BC). Portuguese traders first settled in Macau in the 16th century and subsequently administered the region until the handover on 20 December 1999 to China. Macau (Chinese: 澳門), is only 29.5 km(11.39 sq miles) in size and with a population density of 18,428 persons per square kilometer is the most densely populated region in the world. 95% of Macau’s population is Chinese; another 2% is of Portuguese and/or mixed Chinese/Portuguese descent. The country in addition to Hong Kong, is one of the two special administrative regions of the People’s Republic of China. Location wise, Macau is situated about 60 kilometers (37 mi) southwest of Hong Kong, or about an hour’s ride from Hong Kong on high-speed hydrofoils, which run about every 15 minutes each way during the day. The territory’s economy is heavily dependent on gambling and tourism, with the gambling industry generating over 40% of the GDP of Macau. Currently there are 30 casinos, several of which should be familiar to those of you that visit Las Vegas: Wynn Resorts, Las Vegas Sands, and a partnership with the MGM Mirage.
Directel Macau is the only true multi-platform yellow page publisher/media company in Macau. In less than a decade Oscar Sousa Marques has lead the company thru an evolution transforming them from a Yellow Pages print only focused company to a multi-product advertising consulting company connecting buyers and sellers. Its products include the official Macau Yellow Pages published under contract from CTM – Companhia de Telecomunicações de Macau, the local telecommunications company, which mostly serves the local population. Because of the increasing influx of visitors to Macau, the company has added a number of tourism-related products such as the Macau Tourist Guide, the Macau Tourist Map, the Macau City Map and the Macau Leisure Time (3D-Map). Its online strategy includes multiple websites, such as http://www.yp.mo (Yellow Pages website) and http://www.MacauMap.com (online tour guide). To support advertiser transition to these digital products, the company also provides web hosting, web-design and mailing lists services.
Oscar Marques started with Portugal Telecom in 1994. He has had assignments in Vienna, Portugal, and then launched a new Yellow Pages effort in Uganda. In late 1998, he was asked to go to Macau and has been there ever since. He is currently the President of ADPAI – the Asian Directories Publishers Association Inc. He has degree in Economics from the Universidade do Porto.
YPT: Give us some background on how the company is structured?
Marques: The company was originally owned by Portugal Telecom, the Portuguese telecom incumbent, until late 2007 when it was divested and acquired by some local investors that included the management team, myself and Filipe Santos who had been the Asian Director at that time. An investment group, Macau Ignite Media, then later acquired 49% of the new company, so we have a diverse but experienced management team and Board.
Currently Directel has a little over $2.5 million in revenues (US) from a committed and enthusiastic team of about than 30 people, who work in an environment that encourages responsibility, teamwork, innovation and success. Our sales team has a deep knowledge of the local business community and are thus ideally positioned to serve it efficiently.
YPT: Tell us about your current product mix and what new products are you working on?
Marques: When I first came here we had just the Yellow Pages so we have certainly broaden our portfolio. Print yellow page products still account for 50% of our revenue. We have an existing contract with a local telco which includes both white and yellow pages in English and Portuguese versions. We also publish an English and Portuguese print yellow pages with just business white page listings, as well as a Chinese version. We also still do a “fax” directory which actually has more emails and website addresses than anything thing else in it.
For the travel and tourism segments, we work closely with MGTO, the government agency that is involved in tourism. In print products for this segment, we have hotel versions of the yellow pages with a reduced heading set and in both a larger and small trim sizes (so they will fit in the bedside draws in the hotels). We use a high quality paper in the hotel products, which allows us to compete with local magazine advertising. We have several tourism map products in several languages.
Our digital product set includes several different websites, and services to help businesses that don’t have websites already built. We are currently developing online 3D mapping solutions as well as local mobile search technology that will deliver new and more versatile products and services in the very near future.
YPT: That’s a pretty robust number of products. What challenges does that present to your sales team?
Marques: Directel currently has 30 people about half of which are in sales achieving a little over $2.5 million in revenue (US). We have a natural monopoly here on print Yellow Pages. But we do have competitors on the map products so we have to be creative in how we bundle our products, both print and digital, to provide a true value for the advertisers. We have added several different languages to our tourism products including Korean and Japanese. We are considering another version in the Indian language.
Online we have multiple websites and languages and even social media products. Our online strategy is to be the overall portal that people come to for a range of products. We have begun integrating Groupon/coupon type features into the online products and expanded services such as allowing people to purchase tickets and other items. All of this allows us to help position any small business for all of their advertising needs, not just yellow pages.
One newer service we have been offering is website creation in coordination with a local government department who sponsors up to 70% of any costs involved in creating a website. From the website, we can help them evolve in Facebook, mobile and other features.
YPT: What is the biggest challenge you have with your sales team?
Marques: There are actually two. One is finding good talent. We are facing a large challenge in our recruiting efforts. We are actually lucky to have low turnover in our sales team but it is becoming more difficult to recruit top people as unemployment is at 2.3% here, mostly due to mostly to restrictions on amount of immigration to Macau. This policy has really hurt other small companies here even more. Originally it was designed I think to prevent the casinos from sucking away all of the local talent. But a lot of small businesses such as restaurants are telling us they are closing sections of their business because they can’t find enough wait staff, cooks, etc. This of course then impacts how much advertising they want to do. Of course, we are all competing with the casinos for staff, so we have to offer the full range of holidays, very competitive pay, and lots of benefits to keep our people.
The second challenge for sales is having the sales reps evolve to be solutions providers for smaller businesses, and not just be an order taker. The market has certainly evolved and our products have evolved to match those changes. The bigger product set results in a more complicated sale for reps. We have found that developing new products hasn’t been that difficult, but getting the sales reps to embrace it and sell it can be the biggest issue.
YPT: How have you had to change how your train and equip them to be successful in the market?
Marques: Our sales reps now all have laptops. This year we may move to Galaxy tablets. We have to use tablets with the Droid operating system since we still have a lot of clients that have Flash video in their websites. We would like the reps to average 4-5 visits a day but between the complexity of the product and getting around in the traffic here in Macau it isn’t easy.
On assignments, we do have reps follow themselves into sales they have made the prior year. The biggest change is that we are moving to a full year relationship with our clients and away from specific product campaigns. Instead the rep will visit their advertisers 2 or 3 times a year and just manager their overall spend over the course of the year, not by campaign, but more in groups of products that are closing. Relationships are culturally very important to business people here. It is a big part of the culture.
YPT: Has your business changed any since the changeover from the Portuguese to the Chinese?
Marques: In many ways, business has actually been better for us since the handover to the Chinese. Things have been more stable and reliable. We have an excellent relationship with the local government groups here, and that really did change since the handover.
YPT: Who was the biggest mentor in your career?
Marques: First and foremost, my parents who, with their very different career paths, showed me that if you work and persevere you will get what you want. In the Yellow Pages industry, I have to mention Rodrigo Teles da Silva and Mário Domingos from Directel Group in Portugal as well as José Saldanha from Kenya Postel Directories. All helped me a lot when I first took over Directel Uganda with very little experience in both management and the yellow pages.
YPT: Do you still believe there is a career path in the yellow pages industry, and if so, what does that look like?
Marques: The industry has definitely morphed into something that would have been difficult to recognize as Yellow Pages just 3 to 5 years ago but there are always opportunities when you are serving local SMBs. The traits that will guarantee you a successful career are now the ability to serve your client with whatever product or service you have, the willingness to embrace change and positive thinking. You have to listen to your market and adapt or come up with new products that really meet your clients’ needs and not be afraid of cannibalizing some of your existing ones. The fat EBITDA margin periods are gone but as long as there are SMBs, that we invest in our database and sales capacities we should be able to succeed.
YPT: How do you keep the company current on what is happening in the industry?
Marques: Directel Macau has been a longtime supporter of ADPAI – the Asian Directories Publishers Association (www.adpai.com). ADPAI is the non-profit association that comprises of companies that are involved in the directory business in Asia. It establishes a forum for members to meet on a regular basis to exchange knowledge, experiences, information and ideas, establish standards and practices for the industry in a spirit of mutual interest.
The association is now evolving to be more open to all publishers in the area, as well as online operators and other similar type providers. We have some members that don’t even have print Yellow Pages. And if you look at our product line we’ve been doing things like maps and tourist guides for many years now. We are morphing into media companies, not just Yellow pages publishers.
YPT: Where do you see the future of your business going?
Marques: We believe that publishers need to understand how important their database of information is. We have the best database in Macau. In the past two years we have been building that database going beyond just name, address, and phone number to including company information things such as hours of operation, whether the restaurant is open for lunch, easy to park, is the business is kid friendly, things like that. We’ve even been using temps to add to that database beyond what our sales people collect when they go visit the advertiser. That database is the real difference between what we can offer and others. We will also start adding geocoding information too. We have found that the Google info often isn’t as accurate as people think it is. With all of that information, we can syndicate it to others while keeping the relationship with the advertisers. I think this is a very important thing that publishers need to understand about their business to help shape their future.