The success of Overture and Google’s paid listing programs has many industry experts speculating about the survival of printed yellow page telephone directories.
How viable is the search engine threat? How are traditional directories responding? These questions and others were the focus of a provocative panel, “The State of Digital Yellow Pages,” at this year’s Directory Driven Commerce Conference, held last month in Denver, Colorado.
Panelists represented both the online and print worlds and had experience in both U.S. and European markets. Analysts presented controversial statements, in part derived from a recent white paper by conference sponsor The Kelsey Group, and invited panelists to respond.
The white paper, Searching For Profits: Yellow Pages and the Challenge of Pay-Per-Click, is a broad-ranging study of Internet yellow pages and emerging alternatives, such as online city guides and localized pay-per-click listings from search engines.
Below are some of the more interesting, often controversial statements from The Kelsey Group, with responses from the industry panelists.
Print publishers are not investing sufficiently in digital yellow pages because of the much greater profitability of their print books.
Dave Galvan, senior manager of business development, Yahoo Yellow Pages: “Publishers are not under-investing, but not over-investing, either. The partners that we have are taking it relatively slow. They’re definitely not putting their heads in the sand, because they know that if they do that, in two years they’ll be dust. But they’re taking it a little more slow.”
Peter Buxton, consultant, Buxton Independent Consulting: “The ultimate challenge is positioning. Some customers get a lot of value from the Internet versus others who get no value at all.” Buxton believes yellow pages publishers increasingly recognize Internet yellow pages are a new and parallel service to print. He sees growth in print and even more rapid growth in the Internet arena. But this is not happening at the expense of print yellow pages.
The term “yellow pages” has not caught on the digital world. Search is a much more powerful idea in the minds of Internet users.
Steve Yeich, general manager & VP of local search, Overture Services Inc.: “This is a U.S.-centric question. Search is where the traffic is. Ultimately, it’s all about finding ways to provide users with locally relevant information. So, we’re talking about partnerships and a distribution network that involve all of those — Yahoo, MSN — about distributing our local listings as search results (available in the next few quarters).”
Regarding the recent consolidation trends in the search engine world, Yeich said, “It’s not clear that we’ll see the same consolidation when it comes to local listings. That’s why we want to power any and all local traffic online that’s relevant. There’s an opportunity to make the user experience a lot more robust and user friendly.”
Valerie Shwartz, director of strategy, organization, and quality, Pages Jaunes (France): “We don’t think about yellow pages versus search. People looking for something go to where they think they’re going to find it.”
Shwartz cites the pictures of every street in Paris available in Pages Jaunes’ online directory. Rather than picking out a restaurant by type of food, you can use picture search to see what eateries look like before visiting. “Search isn’t something opposed to yellow pages,” she said. “We just need to be accurate in what we give as results.”
Local search is imminent and a direct threat to yellow pages.
Overture’s Yeich believes the company’s services are completely complementary with Yahoo search listings and Yahoo yellow pages. Furthermore, they’re also complementary with print and online offerings from both independents and incumbent traditional directory publishers. Speaking to audience representatives of these firms, he said, “Ultimately, we’d love to power distribution of local listings on your properties. Are you in business of printing books with yellow pages, or are you in the business of directional advertising?”
Yahoo’s Galvan notes all yellow pages are local search. “We have a strong, thriving business with a great brand, and we have no intention of integrating that into search in the immediate future. Local search and Internet yellow pages products have a purpose, but those products in and of themselves have challenges: scaling, distribution, selling. Selling is still the lifeblood of these products.”
Bottom line: Will search engines kill traditional directory services? Not any time soon, say the panel of experts. Paid listings offered by search engines are complementary now and are mostly effective for online merchants who can directly measure the return on investment (ROI) of their campaigns. Local yellow pages listings, by contrast, rely on an army of salespeople who can guide local, often non tech-savvy customers, a completely different model than the self-serve approach used by search engines.
For the foreseeable future, anyway, it looks like paid listings and traditional directories have a comfortable and growing coexistence.
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