The role of directories in marketing is changing. Companies are increasingly recognising that directories frequently supply the stimulus to action after other advertising media have played their part in awakening interest. Traditional views of this essential link in the buying chain lag behind, however. Some directory publishers say that advertising agencies underestimate the value to advertisers of directory entries.
Directories overcome the time delay that often occurs between need recognition and response, says Kendall Gordon, senior marketing manager for Thomson Directories.
“We know from research both in the UK and overseas that about eight out of ten people who pick up a directory intend to make a purchase. People may be interested in an advertising proposition but they may not be ready to respond at that particular time. Even if the advertisers put their number up on the screen or in the press, people don’t keep that sort of stuff in front of them. The directory becomes the missing link, the direct medium that finally connects the potential purchaser with the seller.”
Lower advertising revenues are inextricably linked to the image of directory advertising, says Richard Price, product development manager for Reed Business Information.
“Directories are generally there to provide information for purchasing decisions. You go to them because you want to buy a product. Advertising agencies tend to bypass directories in their media plans. The biggest spend and the more creative campaigns will tend to be found in journal or in television advertising.”
Measurability is the key to convincing advertisers and agencies of the relative importance of directories, says John Helstrip, marketing manager for Scoot.
“Scoot answers that issue by having an 0800 Freephone line. If you are running a sales promotion in a newspaper, then you could put the Scoot telephone number at the bottom as the call to action and we would direct customers to the closest store. We can say exactly how many responses there are for a particular advertisement and it helps people capture data which can be used for database marketing and cross-selling in future.
“Scoot supports each stage after customer need recognition with its call directory service, Scoot Connect. We will provide the caller with details of three local suppliers and give them information to help them make a decision. From the advertiser’s perspective it’s beneficial because we reduce the competition.”
Directory advertising can create a favourable impression for companies that lack a prominent high street presence, says Nigel Martin, marketing communications controller for Yellow Pages.
“Companies spend huge amounts of money on television, press, and poster advertising to create a desire to purchase. However, many of these retailers are not highly visible on the street. Take the case of a fast food chain which runs a radio ad. If the chain is not in a directory, it’s got no mechanism for potential customers to find out how to act on their interest.
“That is the directory’s role in the brand-based marketing mix that many advertising agencies fail to understand. It’s not about repeating the same message; it’s about making those huge amounts of invested money work harder, turning desire into action.”
Advertising agencies tend to think very one-dimensionally, says Martin.
“They decide that they must tell people why their client is different and focus solely on that. They never take a step back and say: if we do everything right, how are we going to turn this into sales volume? That’s the part they miss out on.”
From the client perspective, local directories are often crucial in building niche markets, says Kate Armstrong, head of marketing for Admiral Insurance Services, which advertises in Thomson Local and Yellow Pages.
“Directories are fundamental to our business. We hold market research groups and every year the customers tell us that they use directories. Local directories are very important for us because our advertising might not be of interest to someone until they’re about to renew their insurance. It gives us a great opportunity to target segments of the population with different messages.”
Admiral audits directory responses in great detail, explains Armstrong.
“After a directory has been out for six months, we look at what response it has pulled. Then we do postcode analysis, assuming people live at the postcode they’re using (unless they’re calling from work). After that, we look at the average premium and how we can improve it.”
Thinking nationally while advertising locally makes business sense, says Mike Smith, marketing director of Practical Car & Van Rental, which advertises countrywide in the Yellow Pages.
“We draw up to 30 per cent of our business from advertising in local directories so it’s an essential part of the mix. With 200 outlets nationwide, that means we take ads in about 70 editions of Yellow Pages. It works well so we’ll also be experimenting with the white ‘knock-out’ ads they’re about to introduce.
“Over the 15 years we’ve been in the hire business, we’ve learnt that the proximity of customers to their nearest outlet is a key differentiator, so it makes sense for local activity to take a higher priority than national brand building.”
The potential of the Internet for directory publishers is enormous, according to Chris Loveys, director of Wise & Loveys.
“Directories have always been a valuable potential source of mailing lists for direct marketing, but the economics of selling the relatively small lists that often result from the search of a directory have sometimes meant that these highly targeted lists are difficult to obtain. This is starting to change as Internet searching and delivery of mailing lists removes much of the cost of the exercise.”
Wise & Loveys has provided the UK’s first fully automated mailing list site in http://www.mailing-labels.com. Both business-to-business and consumer mailing lists are instantly available to visitors, who can purchase the resulting lists for immediate download as ASCII files or in the form of labels.
The site is aimed at small- and medium- sized businesses and users pay only for the data which is downloaded. It is likely that many directory publishers will have to offer this sort of accessibility to clients which advertise in their online versions.
Rosemary Pettit, director of the Directory Publishers Association (DPA), notes that the Internet has given directories an edge over consumer magazines in terms of the advertising they attract.
“Increasingly, directories are being seen as a suitable medium for advertising on the Web. There’s also sometimes a crossover from advertising on CD-Rom and from book. Directory publishers are increasingly taking advertising on the Web into the wider business community. That’s a trend which is clearly going to continue and gather momentum.”
An important feature of the Internet is the capacity to feature offers online, says Yellow Pages’ Martin.
“This is the main difference between printed and telephone or online directories. It’s an immediate message and updating it is not a problem at all,” he says.
Price at Reed believes that directory advertising is beginning to move up the information chain.
“This is particularly true for Internet products. You’re not constrained by the storage issues that you have with a hard copy product. With the Internet you can have a database sitting behind the company’s entry, which gives a lot more detail. Customers can search for specific technical specifications and pull back just the company that they’re looking for.
“We’re finding that much of the advertising we are doing on the Internet is information. The advertising takes the buyer further down that information chain to the point where they will consummate the enquiry with an order.
“It remains to be seen whether that will move the advertising agency out of the equation, because it’s not really advertising in the traditional way that an agency involves itself with a client.
“Year on year, however, advertising spend in directories is increasing. Certainly that’s the experience we have at Reed.
“That’s accompanied by a value change, in that people are spending more but using their money differently: they are providing a buyer with information to make a purchasing decision.”
Statistics offered by the DPA’s chairman of statistics, Nicholas Service, show that directories are ranked sixth among all media in the UK, attracting more advertising money than consumer magazines, outdoor and transport, radio or cinema. Directories took 10.6 per cent of the share of the advertising spend in the press in 1997. Service indicated, however, that future trends might be less bullish.
The Yellow Pages perspective, says Martin, is that directory publishers should do more to convince advertisers and agencies of the benefits they offer in order to maintain growth in the market.
“Whether they choose to admit it or not, clients advertise to lift sales. Agencies need to focus more on whether they are doing the best with their clients’ money, rather than just running nice image ads. You’ve got to look at the total mix. The buying process goes from awareness and interest, right through to parting with cash.
“Advertisers have to look at the whole chain, making sure they’re hitting every part of it as effectively as possible.”