Verizon Directories Snags SEM Firm

It’s no secret that Internet yellow pages firms are struggling to find ways to compete with search engines. More and more IYP companies are taking the “if you can’t beat ’em, join ’em” tack, including Verizon Directories Corp., which has purchased search marketing tech firm Inceptor for an undisclosed sum.

The acquisition is designed to enhance Verizon’s pay-per-call and pay-per-click (PPC) bid management system for its SuperPages.com product, and presumably, allows the firm to take advantage of Inceptor’s SEM consulting capabilities.

The deal, explained Inceptor Spokesperson Marcia Castracane, “now gives us the financial backing to grow the business and also be a bidding tool for Verizon.” The Massachusetts-based company’s core product is a PPC bid management platform called BidCenter. The product is sold to marketers and agencies for private use and also is used by Inceptor in managing search campaigns for its clients.

Castracane expects Inceptor to continue selling its services directly to its clients in addition to providing SEM services to Verizon clients.

Verizon declined to provide information regarding how the new technology acquisition would be incorporated into its current business. However, Verizon Spokesperson Dana Benton Russell commented, “At this time there are not going to be any changes in the way we operate.” Verizon is in a quiet period following its filing with the SEC to possibly unload its directories business.

The bid management system will be used to implement PPC and pay-per-call listings on Verizon’s SuperPages.com as well as for SEM campaigns on other sites Verizon handles for its clients. The company recently agreed to resell Google’s AdWords to its IYP clients, and has been placing campaigns for its local clients on Google and Yahoo.

The Kelsey Group reported yesterday that R.H. Donnelley, which publishes a variety of online yellow pages brands including Embarq Yellow Pages, Dex Yellow Pages and AT&T Yellow Pages products, has been working with Yahoo’s search marketing arm to resell Yahoo’s paid search and paid inclusion ads for about a month.

According to a comScore/Yellow Pages Association report from last year, search engines account for 58 percent of unique local searches, compared to 42 percent conducted through IYP sites.

Directories companies, “understand that offering space on their own product alone is not sufficient,” suggested Kelsey Group Analyst Charles Laughlin. “If you look around the directories industry, virtually all of them are trying to do something in the search engine marketing area,” he added.

Laughlin agreed that by offering SEM services, IYP firms could be training their advertiser clients to eventually cut out the middle man and go directly to search engines for their SEM campaigns. Still, the fact remains that directories companies have something that the search firms don’t: longstanding relationships with local advertisers, something appealing to search firms looking to tap into the local small business market.

Expecting search engines to reach out directly to local advertisers may be a stretch. “The question is, are they going to put hundreds and thousands of people out there?” wondered Laughlin.

Laughlin also doesn’t think the vast majority of small business advertisers will want to conduct their own SEM campaigns. Just how long this coopetition will last, however, remains to be seen.