Yellow Pages in Red-Hot Battle for Ads, Readers
The outpouring of yellow pages directories during the past few years has bedeviled consumers.
Where do you simply put all the phone books being left on the doorstep? And which is best for what you want to find?
“I’m not sure the readers are pleased that they now have 10 different directories,” said Sylvia M. Siegel, a San Francisco consumer advocate.
Advertisers have had to consider other perplexing questions, too: Which directories provide the biggest bang for the buck? Are the ads worth the going rates?
Recently, however, some of the frustrations have eased as the yellow pages industry shows signs of growing up. Fly-by-night independent publishers have been driven out, curbing the avalanche of directories but not their diversity; among the survivors are directories for people who own boats or speak Spanish, Chinese or Vietnamese.
Meanwhile, the big regional phone companies have shaken their lethargy and joined ad-hungry independent publishers in the scramble for yellow pages advertising dollars. As the competition heats up, they are putting out books that are better organized, easier to use and serve smaller parts of town.
Advertisers are getting help, too. In perhaps the clearest sign of the industry’s new-found maturity, sophisticated marketing research has begun. Three firms have started tracking the way consumers use yellow pages directories, mimicking the techniques of the likes of television’s A. C. Nielsen, to determine how well the advertising works.
The upheaval in yellow pages publishing dates back to the 1984 breakup of the Bell System, though some competition has existed for years in certain markets, including Southern California. The break up encouraged entrepreneurs to enter what generally had been a lucrative but stodgy business, and at first the newcomers came in droves.
Last year, however, the number of publishers dropped for the first time in at least a decade, falling to 174 from 184 in 1986. The number of directories published declined to 6,116 from 6,357, according to the National Yellow Pages Service Assn. Even so, advertising revenue continued to grow at a healthy rate, topping $8 billion for the first time, the trade group said.
Industry experts say the directories have gotten more useful while the business has become healthier. Local phone companies such as Pacific Bell and GTE California have broken up their traditional metropolitan directories into smaller volumes based on community shopping patterns and consumer needs and redesigned them to make it easier to find particular businesses.
For local advertisers, who account for about 90% of all yellow pages ad revenue, the smaller books help pinpoint the markets they want to reach, said Herbert Gordon, who directs yellow pages placement for Ketchum Advertising in Pittsburgh.
“While it has been confusing, competition has brought improvement in quality,” he said. Moreover, competition has held down ad rates, which used to increase every year by double-digit percentages. Last year’s increases averaged less than 5%, according to Communications Trends, a consultant that follows the industry.
The trick for advertisers has been to choose the right books for their ads. They have come to realize that some consumers, vexed by the duplication in their directories, discard many of the books, said Mary MacDonald, who directs yellow pages advertising for D’Arcy Masius Benton & Bowles.
She learned that firsthand. When she moved to Chicago last year from Los Angeles, MacDonald said she found several independently produced directories left behind in her new home, but none from Ameritech, the area’s phone company.
“The person who was there before evidently had taken the Ameritech book as the one that mattered,” she said.
Some of the surviving independent publishers are prospering. In San Francisco, for example, Direct Languages Inc. produces 13 directories in “second languages.” These generated about $5 million in revenue last year, said Jim Stein, president of the private firm, which he described as both growing and profitable.
“We consider ourselves as only focusing on the segment of the population that is really not using the Pacific Bell directory,” Stein said, adding that more than 70% of the advertisers are non-Asians “who want to do business with Asians.”
In Southern California, United Publishers has been profitable since its first directory, a slender volume that covered Hawthorne and Lawndale, appeared in 1972, said President Dave Edwards. The company now publishes 45 yellow-covered books, each about an inch thick, and claims a combined circulation of 4.5 million. That success attracted the attention of Nynex, the parent of New York Telephone and New England Telephone, which acquired the Beverly Hills company in 1986.
From the outset, Edwards said, United Publishers based its books on its own market research. The aim, he said, was to respond to consumer needs not adequately met by traditional phone books, which had changed little in style for a century.
Competition Heated
Since 1984, the so-called Baby Bell phone companies have come to realize that their already profitable directory-publishing businesses could do much more business. So they now are competing with gusto--in some markets challenging one another.
Nynex, for example, next month plans to distribute a new directory of marina-related businesses to California boat owners. It expects the venture to repeat the success of similar editions in New England.
Nynex faces competition on its home turf from St. Louis-based Southwestern Bell, which last month rolled out the second edition of its directory serving Manhattan. Southwestern also competes in 110 markets across the country with a “Silver Pages” directory, which features goods and services intended to appeal to older consumers.
On the other hand, San Francisco-based Pacific Bell Directory plans to stay in its own territory, which it considers “the single most attractive market in the world for directories” because of its affluence and diversity, said President John R. Gaulding. Last year it began distributing community directories as supplements to its main directories.
The smaller books, known as “Smart” directories, not only list community attractions, hospitals, airports, freeways and parks, they also offer “subject-search pages” that group advertisers under such broad topics as “Automotive,” “Health & Well Being” and “Just for Kids.”
Gaulding acknowledged, however, that the supplementary books have added to phone book clutter in sought-after advertising markets such as the Southland. Indeed, residents of many parts of Los Angeles and Orange counties receive half a dozen directories or more.
Each August, for example, most Los Angeles residents receive three books from Pacific Bell--volumes of white pages and yellow pages covering Greater Los Angeles, plus one of six new Smart directories. In addition, independent publishers drop off competing books.
For instance, there is Donnelley Information Publishers of Garden Grove, which claims to be the nation’s largest independent publisher of directories. (The virtues of the Donnelley directories are being touted in TV commercials featuring Wile E. Coyote and the elusive Road Runner.) Others providing yellow pages directories in the Southland are Luskey Bros. of Anaheim, along with United Publishers, Southwestern Bell (the Silver Pages) and Thousand Oaks-based GTE California.
The profusion of directories has translated into stiffer competition for ad sales.
“It used to be that a (phone company) yellow pages salesman would call once a year and sell you one ad, and that was that,” said Edward G. Blackman, director of the American Assn. of Yellow Pages Publishers. “Now you can hear from a salesman a day. But just because there are 50 or 60 or 70 radio stations in L.A., you don’t expect an advertiser to buy ads at every station just because it’s there.”
The publishers, prodded by advertisers, are belatedly realizing that they have a stake in making advertisers’ choices easier, said Gaulding of Pacific Bell Directory, who also heads the National Yellow Pages Service Assn.
As a result, industry trade associations are studying ways to gauge how extensively yellow pages directories are used. In addition, Gaulding’s company has hired a San Francisco research firm to enlist consumers in eight California markets to keep monthly diaries chronicling their use of directories. Preliminary results will be available this summer.
Two East Coast marketing research firms are conducting telephone surveys.
“The confusion in the marketplace is our fault,” Gaulding said. “We intend to eliminate all that confusion and demonstrate the effectiveness of yellow pages ads.”
The results can’t come soon enough for advertisers, said Mary MacDonald, the Chicago advertising executive. “It’s long overdue.”
EVOLUTION OF YELLOW PAGES PUBLISHING
Total National ads ad revenue* Year Publishers Books (millions $) (billions $) 1977 74 5,171 $208.3 $2.1 1978 96 5,216 242.4 2.4 1979 108 5,267 281.8 2.8 1980 120 5,495 330.4 3.3 1981 134 5,593 379.9 3.8 1982 154 5,652 432.7 4.3 1983 166 5,829 488.7 4.9 1984 174 5,876 580.3 5.8 1985 183 6,068 695.5 7.0 1986 184 6,357 758.8 7.6 1987 174 6,116 829.0** 8.3**
* Estimated by NYPSA at 10% of national advertising revenues.
** Estimate
Source: National Yellow Pages Service Assn.
