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This afternoon at SMB Digital Marketing, Simon Greenman, CEO, Home Advisor Europe, talked about how he is shaping a key European home services vertical, and also reflected a bit on an industry he has a long association with — the Yellow Pages.

Home Advisor is tailoring its model for different markets, categories and customers throughout Europe. The company has generally followed a leads based model, but it recently acquired Werkspot, a home services vertical in the Netherlands that follows a subscription membership model, in which merchants pay a monthly fee for leads, and get other membership benefits, including marketing training.

“At the end of the day they [trade professionals) want simplicity,” Greenman said. “This gives them a predictable cost, which is attractive as a result.

One challenge in a subscription model is yield management — giving a fair number of leads for the subscription. Challenge is matching the marketplace, where lead volume is sufficient to satisfy the trades professionals.

In certain segments lead generation works well. In other categories more comfortable with subscription. The gaps probably correlates most with the marketing sophistication of service professional.

Greenman, with past stints at Dex One and European Directories, was asked about the future of Yellow Pages.

“The publishers are shifting from print to a marketing services model,” Greenman said. “There is a valid role to help SMB through complexity. The challenge is one of margin.”

Noting that Yellow Pages companies are used to EBITDA margins around 50%, Greenman said, “For marketing services, 5% to 15% margins are more likely.”

Further, publishers risk cannibalized by specialized vertical marketing services companies as they pivot in this direction, Greenman said.

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