The scope of information services has broadened so much that established directories have been forced to add value so they can hold on to their position in the market. At the same time, public information services are moving into areas originally dominated by business-to-business directories. The result, in both cases, is a renewed focus on the demands of both advertisers and consumers.
Miranda Cleverdon is head of corporate communications for Free-pages Group. Its three-year-old Scoot interactive service has been giving public directories a run for their money.
“Any vaguely directory-type service would be classed as one of our competitors,” says Cleverdon. “That includes those which offer business-to-business information or entertainment information. This is not the case with published directories.”
Scoot intends to be “the interactive information service connecting buyers with sellers through mult-iple distribution channels”.
Does this mean that it will encroach on existing business-to- business services?
“It does insofar as we have a classified business directory service,” says Cleverdon. “We’re offering business-to-business information over the telephone, mobile phone, CD-Rom and the Internet.”
Certainly Scoot provides stiff competition for major public directories’ interactive sites.
“We split the country into 985 sales hot spots. We make the service very localised so that when you phone you can be pretty sure that you’re getting a local service if that’s what you require.
“Our proprietary search engine starts its search from a central point and works outwards. This is more useful for the consumer – if you live in Birmingham and your nearest dealer is in Bristol, the system would be able to give you that information because it doesn’t search by restrictive postcode matrices,” says Cleverdon.
Search patterns online are different to those on the telephone. “Our research has shown that people who use the telephone are usually in a hurry, and they don’t have time to browse through a directory. They will, statistically, stay on the phone for 2.1 pieces of information. They know what they want and expect us to do all the searching on their behalf.”
This includes items such as cinema listings on the telephone and Web. A Vodafone link which offers free information (including text messages to users’ phones) to account holders, is another competitive advantage.
There is also a home shopping facility. Freepages recently reached a partnership agreement with US shopping network Cendant.
“We’re actually moving our service well beyond the restrictive parameters of the directory market,” says Cleverdon.
Advertising has held steady in directories over the past few years. According to statistics in the 1998 Directory Publishers Association membership directory, directories are ranked sixth among all advertising media in the UK and attracted nearly six per cent of all advertising revenue in 1996. More money was spent advertising in directories than consumer magazines, outdoor and transport, radio or cinema.
Directories accounted for about ten per cent of press advertising spend during that year. Since 1992, more has been spent on advertising in directories than consumer magazines.
Paul Fry, strategic development director for Yellow Pages, says that directories have always had to withstand competition from various media.
“There have always been an enormous number of routes to our marketplace. Directories are not the only way that companies get to their customers. We compete for attention with local newspapers, local radio and specialist magazines.
“They’re all in the same environment, trying to get sales leads to advertisers. The fact that there are new directories in the market hasn’t made it more competitive than it was. The role of directories is to put buyers in touch with sellers, and that’s a function fulfilled by many other media. We see these new services simply as additional levels of competition,” says Fry.
Yellow Pages’ introduction of Talking Pages and the Yell Internet service are simply extensions of this, according to Fry.
“Although they’re very different delivery mechanisms from our printed directory, the same sort of value strategy underpins our approach to them,” he says.
Thomson Directories is concentrating on extending the value added for advertisers by increasing the accuracy of localised targeting.
Kendall Gordon, senior marketing manager for Thomson, says: “We have 164 directories, covering more than 80 per cent of UK homes and businesses. With printed directories, we have tried to provide differentiation in a couple of key areas. One is the more localised scope of the product than other products on the market. The majority of goods and services that people would source are within their local community, within ten to 15 miles of where they live or work.”
Coverage of smaller areas allows for a more portable directory. “Firstly, it’s physically easier to handle than directories that cover a much bigger area. Secondly, we’ve put other features in over the years. We relaunched our service at the beginning of last year and we’ve got a format size which is smaller than A4 for the majority of our directories and we have about 17 A5 directories,” says Gordon.
One of Thomson’s variations on the classified theme, launched in 1991, is to have an A-Z of businesses at the front of the directory. This means that searchers can circumvent the classified section if they already have a business name. In contrast, the Thomson Internet version is all 164 editions rolled into one.
“Effectively, the Internet site is doing both the A-Z and the classified job. Like its print counterpart, it is free to users.”
Thomson takes on specialist bus-iness-to-business publishers with its CD-Rom, which users pay for. The company recently launched an upgraded version of the CD-Rom called Business Search Professional.
“In addition to the address and telephone number information, you’ve got a list of employees and a fax number. You can search by company name, location and postcode. People can export data direct to their own database or use it as mailing labels,” explains Gordon.
When it comes to increasing competition in the market, Gordon does not believe that one particular directory publishing medium is better than another.
“I think there’s room for all of them. We certainly don’t believe there’s any downturn in the growth of the advertising revenue for print. If you look at our own performance, over the past few years we’ve added over ten per cent of revenue every year and continue to grow at that sort of level in print media. So I don’t think telephonic, CD-Rom or electronic services are putting a brake on that.”
Rosemary Pettit, secretary of the Directory Publishers Association, does not believe competition in the industry is a threat to the traditional directory producers either: “Directory publishers produce their own electronic versions, so the extra revenue stays within the same company.
“You could have one directory in print, the same directory available online in some form, and also a CD-Rom. Online directories are a significant part of business, but have not overtaken or replaced print publishing,” she says.
The threat from new media has not altered the fact that the DPA awards earlier this year featured an overwhelming number of print entrants.
“The print directory section is increasing, while the Internet section is only increasing slightly and CD-Rom is pegging level. Year-on- year, we have more print directories entered into the awards.”
One of the DPA finalists was the Profile Group (UK) which produces various media guides. Managing director Robert Barclay says the business sector has not taken to CD-Rom directories, and his company does not use this format.
“We did do the Foresight directory in a disk format, but we found that it didn’t really give people the opportunity to update it often enough. We switched to online services and we find it gives people greater flexibility because we update them all on a daily basis,” says Barclay.
He points out that Internet services are still heavily complemented by their print versions.
“A fair proportion of our clients don’t have Internet access on their desks even though there may be access somewhere in the office. So we find that a lot of people like having a hard copy too.”
The Profile Group plans to make its products more competitive with online services that allow for one-off searches. “Instead of having to buy the whole product you can just check for one tiny piece of information. At the moment we’re registered with the top seven search engines, but we’re aiming to get a much bigger presence.”
Yellow Pages’ Fry does not believe that the proliferation of new media channels and routes to market is cause for alarm.
“Our strategy is always to try to deliver the best value to our advertisers. Advertisers measure us on value for money, by how many sales leads we deliver to them and how many of those leads they convert into actual sales. Our strategy is to keep on delivering the maximum number of sales leads with a very high conversion ratio.”