LSA|14: Going Full Digital: Transforming a Traditional YP

Nir Lembert, CEO of Zap Group, shared his experience in transforming a traditional Yellow Pages company into a fully digital publisher. 

In 2005, the company was Israel’s leading Yellow Pages publisher and print comprised of 85% of its revenue.  The transformation was started by launching sites through specific verticals including lawyers, doctors, and tourism.  But it was largely offering the same information that was available in print, online and the Lembert felt like this was not sufficient to make the transformation to digital.  The company needed to offer something else to be and stay relevant.

Information was not the problem – there’s plenty of information available on sites like Google.  But how do you help your consumers choose what is relevant for them?  Lembert and his team came up with a new vision:

  1. Empower consumers and enabling them to make smart purchase related decisions
  2. Become the main lead generation junction for their consumers.

The company took all the verticals and Yellow pages and merged them under one company umbrella sharing common services for efficiency, but dividing the business divisions into Experts (professionals); Retail and Products; Lifestyle (restaurants, entertainment); and Service Providers (the core of YP).

Each vertical had its own team with expertise in those divisions.  The company also rebranded at that time to become Zap.

Zap built its success on products would help consumers choose or decide or evaluate products and services that they are interested in purchasing as opposed to just providing a listing.  The information Zap provides to consumers to help those decisions include pricing information, reviews, and comparable products.  Zap also provides filters to narrow search results that give the consumer a customized search result based on their wants or needs that can bring a search result of thousands to a small handful of much more targeted results.  Reviews, consumer guides and other supporting information also help with the decision.

Zap launched its online targeted shopping sites in March 2012 with mobile sites released a year later.  The result has been astounding growth over the last two years to the tune of 80% growth in unique users, monthly visits and calls from paying customers.

In 2013 they made the decision to close their print product entirely based on that growth.  So, today they are a 100% digital company.

The decision to close print was not without controversy.  But it is successful.  In 2005 the company’s top line revenue was $210 million.  While there was some drop in revenue during the transition, last year, Zap’s revenue was $190 million and in a couple years they will be back above the 2005 revenue.

For many companies, print is still 50% or more.  Lembert says U.S. publishers, with print products that are still performing, have time and money to invest in the new world.  Zap did not have that luxury and thus went 100% digital.

So what’s next for Zap?  Zap wants to remain in the traditional arena of developing a relationship between the consumer and SMB.  But now they want to be part of the transaction itself.

Some of its new launches that are either live or will soon be launch include the following:

  • Products:  Include prices in product search and become the Israeli Amazon/eBay
  • Services: Launch a mobile payment app
  • Lifestyle and Professionals:  Provide online delivery/reservation/booking systems

One of the biggest changes is that Zap will move to a pay per acquisition or percentage of transaction business model across the board.

Zap is also looking to expand its role as a trusted partner for SMB’s in offering all media services including social media and Web (SEO/SEM), and ecommerce, not just in Israel, but globally.

Zap is knows mistakes it has made and things they’ve learned through this process are relevant for others looking to make a transformation and they would be happy to share their experiences and capabilities with others.

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