Kelsey Report Program Director Charles Laughlin and BIA/Kelsey President Neal Polachek kicked off the Directional Media Strategies 2009 conference with a view of where the directory industry is currently and where it is going. Laughlin provided a variety of statistics from BIA/Kelsey’s Global Yellow Pages 2009-10 report showing how the global directory industry is evolving. For instance, EBITDA margins at global directory publishers, collectively, are gradually declining from 45 percent just five years ago to 43.5 percent in 2008. Further, online revenues at global directory publishers are continually making up a larger percentage of total directory industry revenues. For instance, in Europe, in 2008 25 percent of total directory revenues were the result of online product sales, up from just 17.5 percent in 2006.
Laughlin spoke to some of the changes that are under way in the directory industry, including a changing business model that is blending traditional and performance-based advertising. The business model includes the emergence of transactional services, reputation management and presence management. Moreover, we’ll see a changing sales force marked by a shift in recruitment and training; technology playing a larger role; and a greater focus on outsourcing. Lastly, Laughlin discussed the changing core product which will increasingly be more localized, have a greater vertical focus, be smaller, and have fewer categories and overall fewer titles.
Polachek expanded on Laughlin’s points, further discussing BIA/Kelsey’s view of the future through a three “P’s: view: Presence, Performance and Permanence. The idea behind presence, Polachek explained, is to put the advertiser’s message in the market in the appropriate place, regardless of the platform or medium. The placement could include standard fee-based options that range from print YP and digital out of home to door hangers and mobile. However, the idea is to move beyond presence into a performance model driven by calls, clicks and so on. Lastly, the Permanence piece is about retaining the advertiser through offering things like online bookings, ratings and reviews, reputation management and retention strategies for the advertisers to use with their own customers. Polachek said, “the next decade is about directional marketing services” and noted that we should look beyond the typical labels of print and online.