Surviving in a digital age

Online search engines have changed the way consumers access information about products and services, but directories can exploit and develop the new channels themselves. By Richard West

If JR Hartley, the star of one of Yellow Pages’ most memorable campaigns, were around today the internet would probably save him a lot of bother. For 12 years during the 1980s and 1990s he searched the land for a copy of his less than best-selling book, Fly-Fishing. Today a search on Google would take about 0.12 seconds.

Watching old advertisements often evokes a mild astonishment that we managed to get by relying on such antiquated products. Telephone directories, as endorsed by genial old buffers, might conceivably fall into that category.

Yet despite the advances that have taken place over the past ten years, the latest figures for advertising spend show that the directory sector is doing remarkably well, especially since paid-for searches on internet search engines like Google, Yahoo! and MSN, represent one of the fastest growing forms of media advertising.

Yell, for example, which owns Yellow Pages, Yell.com and Yellow Pages 118 247 in the UK, has grown its top-line sales by some 66% since 2001 and is forecasting double-figure profits for the next few years.

While other advertising channels are struggling under the onslaught of new digital formats, directories are showing few signs of fatigue. This is down to the way the owners have embraced the internet as a new channel to market, and some astute marketing. But with online advertising spend growing fast the UK directories will have to stay on their toes to maintain their current rate of growth.

“Directories have always been about providing information,” says Jacinta Tobin, head of sales and marketing at AP Information Services, a specialist provider of business contact information. “What has changed dramatically in recent years and will probably change again is the delivery of that information.”

Range of media

Yell chief marketing officer in the UK Ann Francke agrees that the ability to deliver over a range of media is key. She says: “We put buyers in touch with sellers across a range of media – the book, the Net, the phone. These separate channels are competing ones. That means it’s important to have a strong and effective presence in them, offering products to meet consumer and advertiser needs.”

Competition, in what is essentially a commodity market, means that the main players have to fight hard and constantly innovate in order to find a value proposition that differentiates them. But when it comes to understanding the psychology of online and offline directory users, the industry is still learning. True, progress is being made, but customer profiling requires more refinement.

“We can say that users go into two different modes,” explains Thomson Directories marketing manager Laura Pelling. “There are times when using an online directory is more convenient, perhaps in a work environment or when surfing the Net at home, and other times when it is more convenient to use a printed directory. There is no particular demographic that uses one or the other.”

Some companies, however, are beginning to shed light on the way users consume the different media formats. Direct media specialist Equi=Media has compared online and offline consumer behaviour in the financial services and travel sectors, and has identified patterns of behaviour that can help advertisers improve their returns.

Equi=Media planning and client services director Richard Davies says: “When it comes to researching suppliers, online is the dominant channel. However, the majority of consumers still prefer human contact when it comes to obtaining quotes or making a purchase. Interestingly, the channel that a consumer uses to get a quote is more likely to be the channel they use to make a purchase.”

However, some observers believe print is in decline. Account director at media planning and buying agency Zed, Diana Rowe, says: “The growth of online searches and people who have access to the internet means that fewer consumers are inclined to pick up a phone directory.”

A 2005 Kelsey Group report shows that digital revenues are growing by 43.6% a year – a figure that dwarfs the growth in print revenues of around 2%.

“There are some significant changes taking place in the way people access information,” says Rowe. “Directory owners need to gain a better understanding of the changing profile of offline and online users, and develop more targeted and relevant packages for their advertisers.”

Locally focused

Yet many are sceptical about the threat posed by internet search engines. Tobin says: “People are getting excited about the ‘new’ search engines but while the likes of Google attempt to index everything in the world, what is obvious is the more they index, the more difficult it is for the user to find what they are looking for.”

Others maintain that the flexibility of offering local information that is accessible over a range of different media formats is the way forward. Francke says: “We don’t mind which channel our advertisers choose as we have invested heavily to make each of our products effective within its own media context. Print will not disappear overnight but businesses will have to work hard to maintain relevance for users and cost-effectiveness for advertisers.”

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