Crushed by a “perfect storm” of debt and declining revenues, TMP, once the dominant player in the Yellow Pages agency (CMR) space, will cease to exist within a few days. However, we have learned that several of the agency’s more valuable local offices and their associated clients have been sold off to rival agencies.
According to one source, Marquette, Ketchum Directory Advertising and Directory Concepts are among the rival CMRs taking over regional chunks of the TMP business.
In an April 1 letter to its clients posted on TMP’s website, agency CEO Mike Flanagan wrote that, “Unfortunately, an unforeseeable perfect storm of events has hit our company. Industrywide declines in print usage have significantly reduced our revenues. At the same time, we are contending with substantial debt obligations. Unfortunately, this combination has severely limited our ability to refinance — leaving us no responsible choice but to wind down operations.”
Flanagan’s description could apply to many global directory publishers. Of course, publishers’ ongoing ability to generate substantial amounts of cash is one clear difference. Still, this is an uncomfortable reminder that casualties are inevitable in a changing industry, and sometimes very prominent brands are among the casualties.
The fate of TMP’s digital arm, 15 Miles, remains unclear. While TMP’s traditional Yellow Pages business has suffered for some time, the 15 Miles operation has experienced strong growth. This suggests it might find a serious buyer or could even strike out as a stand alone agency.
TMP (founded as Telephone Marketing Programs) was formed in 1967 by Andy McKelvey, who also achieved wider fame as owner of Monster.com, which eventually became TMP’s parent company. TMP was the original Yellow Pages agency that was independent from the then telco-owned directory publishers. McKelvey essentially created what became the national Yellow Pages agency, or CMR, industry.
Monster sold off the TMP business in 2005 to the private equity firm Audax Group. At that time, TMP was in the midst of a long-term decline. A 2001 study from The Kelsey Report cited TMP financial data showing a steady year-over-year decline in publisher commission revenues. In 2008 TMP resigned its membership in the Association of Directory Marketing, a move that was soon followed by the ADM’s merger into the Yellow Pages Association.
So while the demise of TMP is stunning given the company’s iconic stature within the Yellow Pages industry, it is really the end product of a very long process of decline.