Seems every year is a year of transformation in the global Yellow Pages industry. This year is no different, with more leadership changes, financial turmoil, and a much more aggressive push into new strategies and new products. There is a growing sense that some directory publishers are turning in a direction where a return to growth is possible. Still we expect it will likely to take a few more years of solid execution to get there.
As a team, BIA/Kelsey’s analysts are in the midst of developing 2012 picks and predicitons for our respective practice areas. It’s a nice year-end exercise and it helps us sharpen our mental swords as we head to ILM West next week in San Francisco.
When change is in the air, as it is in the global Yellow Pages industry, it’s difficult to be too bold in one’s predictions, so here it goes with my top five predictions for global Yellow Pages in 2012.
1. They’re back. Private equity that is. We would expect to see some significant combinations of large publishers, particularly in the United States. And a group of investors will need to make it happen. In fairness, we basically ripped this one off of former Yellowbook CEO Joe Walsh, who made this prediction at our DMS ’11 show in Denver. We also expect to see some activity elsewhere in the world, with multinational publishers divesting assets in order to focus on core markets. One candidate is Yell, which could generate some cash by selling its Latin American operation.
2. Hang up the phone. We would not be surprised if the year 2012 ended with zero publishers of any significant size under telecom ownership.
3. There’s comfort in numbers. The largest IYPs in the U.S. will decide it makes sense to operate on a single platform. The most likely candidate is AT&T’s yp.com.
4. Speaking of IYPs. Don’t expect them to grow very much, and in fact, we might see IYP revenues shrink in some cases. The lion’s share of digital revenue growth next year will come from non-IYP product extensions — SEM, SEO, websites, video, social, ad networks, mobile and so on. In many cases, digital revenues from non-IYP sources will exceed those from IYP.
5. Stop calling me Yellow. Heck, we’re almost there already. When the Yellow Pages Association changes its name to the Local Search Association, you could see the writing on the wall. By the end of 2012, the term “Yellow Pages” will be all but expunged from the vocabularies of the major global directory organizations.
Here is a counterintuitive bonus prediction: Print will make a comeback. No, it won’t start growing again. Our forecast calls for print declines to continue indefinitely. It will make a mini-comeback in terms of its importance to publishers. As many of them move to more explicitly performance-oriented models, print will remain critical since it drives so many leads. This will mean print gains some renewed attention and focus, if not investment.