#DMS2011: The Future of Yellow Pages

BIA/Kelsey’s Neal Polachek and Charles Laughlin hosted an interesting panel on the future opportunities and challenges facing traditional Yellow Pages providers, and how these companies need to continue to transform their business models to embrace the fast-growing digital market.

David Sharman, senior vice president and chief strategy officer, Dex One, made clear that Dex One no longer sees itself as a Yellow Pages company, but a marketing solutions company providing commercially-oriented local search offerings to local businesses. Sharman said the good news about this transformation is that Dex One is positioned as a player in one of the hottest spaces in the investment market today. The bad news, he said, is that is one of the most competitive as well.

Scott Pomeroy, CEO, Yellow Pages Group, New Zealand, said his company has had debates about where the business is going and how they should embrace it. So far, he said, there is no concrete example of a business model that has been completely successful. Pomeroy said the industry needs to do a better job implementing a sustainable model. He said Yellow Pages Group is looking specifically at share of wallet – how quickly small businesses are shifting from print to digital – and working to provide the right product set to make the company credible in the marketplace.

Our own Neg Norton stressed that in today’s increasingly digital world, print Yellow Pages still provide valuable lookups. He noted that he believes that industry’s real struggle has been with sales execution.

Sharman agreed that print still has a lot more life in it and remains attractive – and that his company continues to explore creative ways to extend the medium. He said that local businesses are simply interested in ways to drive leads – so whether that comes from print or digital isn’t an issue to them. He said his company’s salespeople today help determine the combination of print and digital that makes sense for each of their customers.

The panel also spent time talking about the best business strategy for traditional Yellow Pages companies in today’s world – and the pros and cons of creating standalone digital businesses as opposed to today’s integrated print-digital businesses. Sharman said that the capital structure and cultures of the traditional Yellow Pages providers makes it difficult to build out digital offerings and attract the right workforce. Pomeroy built on that by noting that the Yellow Pages company culture was a major constraint to growth – and that publishers felt entitlement given decades of high margins and low competition. He said the industry needs to adopt a more customer-centric and fluid culture in order to be successful.

The remainder of the panel focused on other segments like mobile, and the importance of traditional Yellow Pages driving digital growth through partnerships with more specialized companies with distinct offerings as opposed to creating their own from scratch.

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