Linked In where I saw the following question today:
What is the long term life expectancy of the print Yellow Pages. Please state your opinion in years and facts that promted you to come up with that conclusion.
So I felt compelled to respond:

Two thoughts for the group:

1. I use Twitter (http://twitter.com/marc_lyne) and Tweet Beep (http://tweetbeep.com/) to hear all the comments that are made about Yellow Pages. I would say that 95% of the comments are about the wastage they feel they are creating by taking the 4 thick directories that they have dropped on their door step each year and putting them straight in the bin. Irrespective of the fact the directory may be printed on recycled paper, they want to opt out and not receive them at all. The caveat on this comment being that Twitter users are heavily internet savvy, unlike other parts of the population. The ‘take out’ however is that this group is growing and they want choice.

2. When does advertising become information? And then at what point are people prepared to pay for advertising because it is information they want. This is a subtle twist in the new world we are living in. The old ways are no longer good enough, we all expect not to be sold to on a mass basis, we expect to seek, easily find, choose and then engage. Or alternatively to be targeted with products and services that meet our current requirements exactly eg the right brand, the right price, the right time, the right personal referral…

In conclusion what I am sure of is that Yellow Pages as they currently stand have no future unless they radically re-invent themselves. I am positive that there is still a place for a printed product, distributed to certain people promoting certain types of businesses in certain areas – almost on a personalized basis and possibly including additional types of information.

And regarding on-line, well I have to confess an interest here as I am one of the founders of www.brownbook.net, where we have turned the current ‘centrally produced, centrally sold’ YP model upside down – we encourage everyone to instantly edit our data, just like Wikipedia, and now we are rewarding people who contribute to Brownbook with 20% of the life time value of our customers. All our customers self-service and pay via Paypal. We have the benefit of no legacy cost model, no shareholders that are demanding a return to the halcyon days, no debt, and no highly profitable cash cow. We are pioneering a new way with really interactive, engaging and innovative products for businesses on a very low or no cost basis. This is where we see the future…

Extinction Threatens Yellow-Pages Publishers
By Emily Steel
November 17, 2008

The yellow-pages industry is running out of lifelines.

In recent years, as its customers migrated to the Web — flocking to sites like Google — the telephone-directory business followed, hoping the Internet would be its salvation.

But that strategy hasn’t panned out. Now, the economic downturn is sending the already ailing business into a tailspin.

The audience for online yellow pages remains relatively small, and traffic growth is slowing. So many directory services are vying for the ad dollars of local businesses that no single site has an authoritative roster.

Meanwhile, ad dollars are drying up as small businesses — the industry’s bread and butter — find it harder to pay bills or have cut their spending sharply.

Print and online ad spending on yellow pages will plummet 6.3% next year, more than double the rate of decline expected for broadcast TV, according to forecasts by Wachovia analyst John Janedis. Within the next four years, ad spending will fall 39% in print directories alone — the steepest projected decline across all local-media categories, according to media-research firm Borrell Associates.

“It’s pretty darn hard out there for everybody, and those that have less staying power, it just looks like it’s going to be a difficult environment to be able to hang on in the long term,” said Dave Swanson, chief executive of R.H. Donnelley, a Cary, N.C., yellow-pages publisher, during a conference call on the company’s third-quarter earnings.

Facing the real prospect of extinction, the publishers, many of which have considerable debt, have been slashing jobs, scrapping dividends and exiting unprofitable markets. Shares of two of the biggest publishers, R.H. Donnelley and Idearc, have plummeted 99% in the past year.

“The main pure-play companies do not have capital structures that would enable them to endure perpetual high-single-digit or double-digit declines in cash flow and remain viable entities or solvent entities over time,” says Mike Simonton, an analyst with Fitch Ratings.

Yellow-pages publishers have spent the past several years attempting to reinvent themselves, launching a slew of digital offerings for advertisers, and retraining their sales forces to sell digital ads alongside print ads.

But Internet revenues remain anemic. At less than 10%, online-ad dollars make up only a modest portion of total revenues and aren’t growing fast enough to offset steep declines on the print side, says Mr. Simonton.

Analysts say yellow-pages sales teams face an inherent conflict. While they are pressured to sell both print and online ads, Internet ads are often a third of the price of the print product. The top priority for the sales teams often is to sell the print book first, then sell the digital products.

Even if online revenues were growing at a faster clip, analysts are cautious about the prospects of online-only directories. Yellow-pages ads are the only form of advertising many small businesses buy, and the online ads are typically sold in conjunction with print listings, Mr. Simonton says. That means that if businesses aren’t buying the print ad, then the online ad disappears too.

In a last-ditch attempt to succeed online, some publishers have struck ad-sale partnerships with Internet companies like Google. White Directory Publishers, which publishes directories in 90 small to medium-size markets, says it is often more effective for small businesses to have a presence on Google than on a directory Web site. But many small- to medium-size businesses don’t have the expertise or time to create effective Web sites or buy and track search ads, so White Directory is offering to do it for them.

“They all believe they have the URL and the Web site that’s going to win,” Jeff Folckemer, chief operating officer and chief executive-designate of White Directory, part of Hearst Corp., says of the directory companies. “Our philosophy immediately was to go right to the big guys.”

Mr. Simonton cautions, however, that even if publishers survive, any growth they achieved since the last downtown, in 2001, will be short-lived. “That extra growth coming from new businesses are the first to fold in a downturn. You basically give back in one downturn what took seven years to grow.”

Link to the article here.

When we first designed Brownbook.net we set out to challenge all the established rules of how local business directories ’should’ work (coming from a big directory background as we do this was not always easy, but an exercise we def wanted to do).

#Evolution of tag-style searches in other web behaviors:
The use of tags to replace traditional ‘more scientific’ methods (tags versus hierarchical taxonomies/classification structures, and geo tags versus radiating search) is becoming more prevalent on the web and an accepted behavior that allows consumers and publishers (businesses in the case of business listings) to naturally reach a equilibrium of self regulation.  What I mean by this is that instead of maintaining a complex (and by definition rigid) taxonomy you use tags to allow that taxonomy to evolve naturally over time (some people may be familiar with the term folksonomy).  We see the same rules that apply to a hierarchical category taxonomy applying to a radiating geo search.

It’s not a short answer, but as with all simple concepts the wiring under the board is often more complex than you’d imagine.  But in short geo tags let users and busineses define what works best for them, without the arbitrary rules that the traditional directories had to enforce.

Link to article here.

Quote from Tracy Coenen; “The creators and marketers of the yellow pages boast that their publication is still relevant. The Yellow Pages Association suggests that 49% of American adults refer to the yellow pages every week. I’m not convinced that this is true”

“And neither is The Kelsey Group, an advertising research firm in New Jersey. They say that in recent years, the use of printed newspapers and yellow pages has been falling at a rate of 2% to 3% per year. But in 2008, the drop in usage may be closer to 10%”

As the comments show, there is usage today for both online and print directories. What I find amazing about the comments is the reluctance to realize the inevitable. Whilst there may be a place for a printed directory of sorts certainly for the next few years and potentially for a few more years for emergency type businesses, there are some overwhelming factors:

1. Technology is advancing, will our mobile devices be the main internet device of the future, its certainly starting to look that way? One thing is for sure there will be more devices in more places and it will get faster… it aint stopping.
2. The tech savvy generations are growing up ie, they are becoming the majority.

Add to this the additional information of today; reviews, photos, videos… then the inevitable will happen, the question is how quickly, and that depends on how fast the majority of advertisers and consumers move. It’s the directory ‘chicken and egg’ start-up in reverse, the less advertisers, the less users, the less users the less advertisers.

In the UK Yell Group owns the trademark and they guard it fiercely, indeed The Brownbook received several letters when we started out cautioning us, in no uncertain terms, about the use of the term.

I can’t help but wonder how long the term will remain an enforcable trademark?  How long before it becomes genericised?

Let me ask you this – and before you answer just spend a few minutes with Google News – do today’s up-coming consumer generations assign the same meaning to the term “yellow pages”?  Are Yell’s actions likely to stop people using the term in a generic context?

Well, for companies like us, yes.  One of the common complaints from trademark owners is that of ‘passing off’ – that the alledged infringer will somehow be confused with the TM owner and all us dumb consumers will somehow thing that the upstart is the TM owner.  Well, Brownbook.net is proud NOT to be associated with ‘Yellow Pages’ or the owner of that trademark, maybe I need to make that even clearer, just in case you missed that .

We’re moving ahead, creating a new path, clearing out the old and welcoming the new, why would we want to be associated with the stalwarts :).  Come the revolution…

But why can’t executives at the company face up to reality: their business is no longer the same as it was 10 years ago, times are changing. CFO John Davis said the company is experiencing a tough economic environment – no shit Sherlock!!! But more revealing is that he chooses to blame the falls on factors that are generally outside of their control, i.e. the ‘economic environment’. Their suggestion is that because of the tough climate their advertisers are tightening their belts and that causes them to spend less on advertising, but that doesn’t match up with the typical directory sales person’s take, which is when times are tough you should be spending more on advertising – come on guys, you can’t have it both ways.

No, I’ll tell you what it is, and the evidence is clear for everyone to see: FEWER consumers are using the Yellow Pages and directories like it, and businesses are spending LESS because they have more places to spend their money online and offline. Now, since Yell gets only 11% of its revenues from online, I’d say they have SERIOUSLY underestimated the significance of online and new consumer AND advertiser behaviours.

It reminds me of a story told to me in my childhood, the story of King Canute who tried to defy the incoming tide and drowned as a result. Nope, fat-cat highly paid corporate executives versus agile smart startups rarely makes for a fair fight. QED.