You know local search is
going mainstream when the
major print Yellow Pages
publishers gather with the
major online search
providers to discuss this
formative new industry, as
happened at this conference.
Yellow Pages publishers are
concerned that web search is
going to make inroads into
the $25 billion Yellow Pages
market. The improvements in
local search threaten
publishers' IYP offerings
and they foretell a credible
threat to the printed
directory business.
The Yellow Pages Integrated
Media Association
commissioned a study finding
that the printed Yellow
Pages have seen usage
decline from 2.0 average
weekly lookups per person in
the mid 1990s to 1.4 average
weekly lookups in 2003. The
same study found that IYPs
had .33 average weekly
lookups and local web search
had .33 average weekly
lookups.
Logically, you might think
that the big Yellow Pages
publishers might work with
the web search firms to sell
the paid search to local
businesses. Unfortunately,
there are some inherent
problems for search
companies and Yellow Pages
publishers in monetizing
interactive advertising.
Online local traffic is
still far too low to justify
prices high enough to
compensate a field sales
force.
Online ad products are far
too complex for the average
advertising sales
representative to sell.
Online directories & search
companies are not prepared
to build outside sales
forces necessary to reach
the 10 million small to
medium enterprises in the
US. In comparison, there are
approximately 39,000 outside
sales people selling print
Yellow Pages.
The economics of publishing
printed Yellow Pages remain
incredibly strong, so even
with decreasing usage; the
books continue to deliver
leads at an acceptable rate
to advertisers. Renewal
rates of print advertisers
has held steady at 75-80%.
Using a traditional print
Yellow Pages sales force to
sell interactive products
takes sales resources away
from the highly profitable
print business.
Search Engines On Local
Search
The most eye-opening panel
at the conference had
Yahoo!, AOL, LookSmart,
Terra Lycos and Muller
Medien discussing their
strategies for monetizing
local search. The audience
of 300 attendees from 130
companies included every
major Yellow Pages (YP)
publisher and dozens of
Internet Yellow Pages (IYP)
publishers. I understand
that Google declined to
participate on the panel.
