The Praized Blog

Mike Boland over at The Kelsey Group’s blog posted highlights of the “The Change Imperative” panel in which I was a participant. I was joined by Geoff Avard, GM, Strategy, Sensis, Perry Evans, President, CEO, Local Matters and Ken Ray, CMO, AT&T Publishing & Advertising.  Every question asked by Charles Laughlin and Neal Polachek started with “In five years, …” and all statements were designed to get a reaction out of the panelists and the attendees.

Examples included:

• In five years, SEM bid pressure will rise to the point that advertisers will see more value in print advertising.
• In five years, small businesses will use self service online advertising like AdWords to a much greater degree.
• In five years, Like many of the rumors that continue to circulate, Google will have bought a yellow pages publisher to gain a direct local sales channel.
• In five years, no one under 30 will be using the yellow pages.
• In five years, more listings will be accessed by mobile than on the PC.
• In five years, what will follow the iPhone as the next big thing?
• In five years, where will you be?

You can see of our answers in the Kelsey Group blog including the one related to where I think I will be in five years…

On Tuesday, at the Kelsey Group conference, Sami Kassab, Analyst at Bnp Paribas, presented us the financial market’s point of view on directory publishers.  As most of the Praized blog readers know, stock markets have drastically punished directory publishers in the last 12 months. Kassab offered us his very relevant analysis on what investors want to see from the industry and what he thinks is the future of directory publishers.

What investors want to see?

• Repair balance sheets and avoid default through costs reduction programs like closing of locations and titles, headcount reduction and outsourcing and offshoring
• Asset disposal but he indicated few buyers and limited financing available.  He gave as example Truvo’s disposal of its Dutch business in July 08 and rumored disposals of Telegate/Thomson by Seat or Yell’s exit from Latin America.
• Improve revenue growth performance through
  • Defense of print revenues (via new product launches, long-term contracts and new pricing policy)
  • Increased online revenue growth (via higher usage, improved monetization and new products like classifieds or video)
  • Leverage sales force (via new SEO/SEM products and maybe outdoor advertising)

What he sees in his crystal ball?

• Usage and revenue decline of print likely to accelerate with further growth of broadband and mobile technologies and as witnessed for old legacy media products in other media industries
• Usage and revenues of online assets likely to accelerate
• EBITDA margins under pressure from changes in revenue mix and additional investments. Growth of 2-4% for best in class players, decline for other players.

Very interesting slide from Frank Jules’s presentation yesterday.  Jules is President and CEO, AT&T Advertising & Publishing.  In it, he details the high-level strategic imperatives of the AT&T Yellow Pages organization.

“A dollar of online revenue sold drives more shareholder value today than a dollar of print revenue”

Andrew Day, Chairman, Truvo quoted by the The Kelsey Groupanalysts in one of their presentation.

Continuing Charles Laughlin’s kick-off presentation at the Kelsey Group DMS ‘08 conference, he gave a state of the Yellow Pages nation.

Where are we today?

1. Print revenues are declining – in most places – with pace accelerating (US, most of Europe, exception: Australia, Canada, Yellow Book in the US)
2. Belief in product eroding in many areas – including among many within the industry
3. Economy is a factor – but long-term shift also at play
4. Many publishers are successfully making the single product – multi-product transition
5. Other publishers risk long term viability by not making the shift quickly enough.

What will the winners do?

1. Measure everything and embrace transparency
2. Invest in sales transformation
3. Leverage technology to enable transformation
4. Recognize and protect core assets
5. Ruthlessly shed the rest
6. Continue to invest and believe in print

Predictions (by 2013)

1. US print titles circulation will decline by 30%
2. Printed residential white pages reduced to minimal on-request print run
3. At least one global publisher divests its print Yellow Pages business
4. Professional services advertisers will have largely shifted from print to online
5. Print revenues in home services advertisers (ex: plumbers) will remain stable
6. Self-provisioning will account for 25% of directional media sales

More on the Kelsey Group blog.

Great presentation by Charles Laughlin today at the Kelsey Group conference.  He presented the various perception issues that are currently plaguing the directory publishing industry and exposed the reality based on various data points.

Perception 1: the Yellow Pages medium is already dead, the corpse just does not know it yet.  Reality: as Yellow Pages transitions from single to multi-product, some will survive, some will not.

Perception 2: today, only luddites use the printed Yellow Pages.  Reality: they do but other uses it too, but not as frequently as they once did.

Perception 3: Yellow Pages is way too expensive.  Reality: the ROI on Yellow Pages remains very high vs. other media.

Perception 4: advertisers are better off dropping all print Yellow Pages in favor of more online ads, SEM, SEO.  Reality: depending on heading, it would be difficult to replace print Yellow Pages leads with any one source.

Perception 5: Yellow Pages is the media equivalent of a smoke-belching coal fired power plant.  Reality: title inflation has fueled this perception but Yellow Pages’ landfill contribution is still smaller than newspapers, diapers and magazines.

Update: Perry Evans (CEO of Local Matters Inc) has a survey on his blog related to this topic.

I’m attending the Kelsey Group’s DMS ‘08 conference this week in Atlanta. It’s at the Hyatt Regency Atlanta.  Ping me at seb AT praized.com if you’d like to meet and chat.