Printed Yellow Pages’ Audience Continues to Shrink Two trends have had the most to do with the steady decline of the print Yellow Pages: the aging and passing of the older generations that represented the height of directory use and younger generations’ almost total reliance on the Web for information, and via mobile devices, specifically. Older Americans and those living in rural communities with limited Internet and/or cellphone service are the only remaining viable consumer audiences for the printed Yellow Pages. That being said, the Yellow Pages brand is still alive and competing in the digital world of information, in the form of YP.com. This special report from THE MEDIACENTER examines both the last days of the printed Yellow Pages and the future days of the online version and their impact on local businesses.

Some Remaining ROI Value A 2013 report, “ADP Ad Effectiveness Study,” from the Association of Directory Publishers (ADP) found that ads printed in independent Yellow Pages directories generated 28% more calls to businesses from 2010 to 2013. The average number of calls was 197, which the study calculated to $15.50 per call. An average advertiser’s investment of $3,280 for an ad or ads in independent Yellow Pages directories resulted in $81,700 in revenues, or an ROI of $24 to $1.

How Soon Will This ROI RIP? An expert in the printed directory sector concluded that this ROI was achieved because “80 percent of the top print directory headings are service-related and high-value purchases.” He then said that retail and entertainment-related purchases are more likely to be made online and via a mobile device. If businesses in two enormous commercial sectors – retail and entertainment – have “abandoned” independent printed Yellow Pages, then how much longer will these directories deliver this 2013 ROI for service-related businesses?

Home and Trade Services Are Still in the Book Through its in-depth study and analysis of small and medium business (SMBs) during Q3 2014, BIA/Kelsey found that the General Services sector, and the Home and Trade Services, specifically, still heavily relied on traditional media.   According to the study, Home and Trade Services’ top 5 media used were newspapers, 50.4%; Facebook page, 43.1%; print Yellow Pages, 36.2%; direct mail, 32.5%; and Website, 30.2%. Additional data from BIA/Kelsey reinforced this future trend towards more digital advertising, as 27.7% of Home and Trade SMBs were planning to increase their digital ad spending for 2015, compared to 24.7% during 2014.

Boat Dealers Have Thrown the Yellow Pages Overboard By contrast, readers of Boating Industry Magazine, according to a January 2015 survey, ranked the Yellow Pages last on a list of the 11 most-successful marketing tactics for 2014.   Only 1% of surveyed readers considered the Yellow Pages a successful advertising medium. The top 5 were company Website, 27%; boat shows, 21%; Web advertising, 12%; email marketing 12%; and Facebook, 8%.

Anemic Ad Spending BIA/Kelsey forecast that local ad revenues from the printed Yellow Pages will continue to decline at a CAGR (compounded annual growth rate) of -4.1% from 2012 through 2017, which is not as steep as the 10.1% decrease from 2008 through 2013. BIA/Kelsey attributes this slowing of the segment’s decline to the transition to a digital/Internet model, which will generate moderate revenue growth through 2017. For 2015, the printed Yellow Pages will generate $3.1 billion in ad spending, declining to $2.2 billion by 2017. Internet Yellow Pages’ 2015 ad spending will total $2.9 billion and increase to $3.3 billion by 2017.

At the Bottom of the US Total Ad Spending Chart According to eMarketer data, total media ad spending in the US will reach $189.38 billion, with advertising spending in the mobile channel increasing 43%, from 9.8% of the 2014 total, or $17.65 billion, to 14.0% of the 2015 total, or $26.51 billion. During 2014, mobile ad spending jumped ahead of newspapers, magazines and radio for the first time and behind just TV and overall digital. For 2015, the gap between mobile and newspapers, magazines and radio will increase even more. At the bottom of the list of US total media ad spending are print directories, with just a 3.1% share for 2015, or $5.87 billion. Print directories’ share has been declining since 2012, and is forecast to continue to decline through 2018, to 2.3%.

Much the Same Story North of the Border Financial results for 2014 from Canada’s Yellow Pages Limited also reveals a decrease in print directories’ revenues and an increase in its digital platform revenues. Print revenues decreased 23.1% to $434.7 million. The company said it has stabilized print revenues by offering customers in rural and urban markets larger size ads at little or no increased rate and fewer ad-size options. Yellow Pages Limited’s digital revenues increased 9%, to $442.8 million, primarily because more customers are migrating from print directories to the digital platform and the majority of new customers are only requesting digital ads.

The YP Story When AT&T saw the handwriting on the wall about the future of its printed Yellow Pages during 2012, it sold 53% of its AT&T Advertising Solutions and AT&T Interactive to an affiliate of Cerberus Capital Management, resulting in the founding of YP Holdings LLC. Today, YP.com and the YP app for mobile users is the largest local ad platform in the US. During 2013, its total digital ad revenues were just short of $1 billion and its mobile search revenue was almost $400 million, which placed it a distant third behind Google and Twitter in net mobile ad revenue share. YP’s peak year may have been 2013, as it doesn’t even appear on a list of the top 8 companies by net US digital ad revenue share 2012 through 2016. The forecast for net US mobile ad revenue share by company shows its #3 position during 2013 will decline to #7 by 2016.

Young Adults Are YP Mobile App Users According to May 2014 comScore data, YP Mobile is where small businesses should be if they want to reach Millennials, 18–34, and younger Gen Xers, and with incomes of $75,000 or more. May 2014 comScore research also revealed that YP.com users had much higher percentages of ad exposure characteristics than all mobile phone users. Exposure to ads, 60% and 24%; ever clicked on mobile ad, 28% and 7%; scanned a coupon or offer via QR/barcode, 20% and 4%; and purchased a product via mobile phone, 52% and 18%, respectively.

Search Stats Facts Ultimately, the test for search engines, YP.com and similar apps is how consumers use them to search for local business information. A 2014 report from comScore, the 2014 Local Business Search Study, found that 66% of consumers searched Internet Yellow Page sites for local information about independent businesses, compared to 56% for portal sites and 62% for local sites. When searching for information about a branded business/franchise, however, portal sites received the highest percentage of consumer searches, at 44%, followed by local sites, 38%, and Internet Yellow Pages sites, at 34%.

Search Engines Are Consumers’ Primary Choice Burke’s Local Media Tracking Study for 2012 and 2013 provides detailed insights as to the combination of local media that consumers access for different business categories during the “Seek,” “Discover” and “Consider” steps of the buying process. More consumers used search engines than the printed or Internet Yellow Pages when seeking information for 19 of 21 local retail and service business sectors, including restaurants, beauty salons, auto repair, banks, dentists, hardware, florists and landscaping. Only plumbers, 46% and 40%, respectively, and appliance repair, 52% and 42%, respectively, had higher percentages of searches in the printed version of the Yellow Pages than search engines.

Yellow Is the Color for Caution The printed Yellow Pages directories are on borrowed time, since printing, publishing and distributing the books to a limited and decreasing number of older-adult and rural households will eventually cross a threshold that will make it uneconomical. Local businesses in specific categories will find it beneficial to be listed and to place ads on YP’s digital and mobile platforms; however, search engines, social media and apps, such as Yelp, have a significant advantage over YP in shares of users and revenue. Local businesses must pay close attention to this competition to be sure they are not spending future ad dollars ineffectively.