For years, directory publishers enjoyed the luxury of having few competitors in a lucrative market. The competition, when it came, could only have been predicted by the most farsighted individuals. Now they are up against an operator that is cheap, has limitless capacity and provides a flexibility that paper-based publishers will never be able to match: the Internet.
The way directory publishers have responded to the opportunities provided by the Net can be divided into two parts: consumer directories, such as Yellow Pages and Thomson Directories, and business-to-business titles – such as those published by Hollis, Miller Freeman, Dun & Bradstreet and EMAP.
This division could be seen clearly in the way publishers responded when contacted about this article. With one notable exception, business-to-business publishers responded with a loud silence. Yellow Pages and Thomson Directories, on the other hand, were difficult to get off the phone.
In the absence of any word from the business publishers, it is possible only to guess the reason for their lacklustre response. Consumer directories have embraced the Net with relish; business-to-business publishers have been cautious.
This caution could cost them dearly. Lisa Schwartz, operations director at publishing services company Milex Data, says: “The business-to-business market is moving very cautiously when it comes to putting information on the Web. This industry is not populated by big risk-takers. They are publishers which have invested a lot of money in collecting data – and they fear a loss of revenue and a dilution of content if they move onto the Net.
“But I fear they are being too cautious. If they wait too long, someone will step in and provide the information for them.”
It is already happening. Digital publishing consultant Hugh Look says a number of companies which have nothing to do with directory publishing are taking the initiative. “Look at metalsite.com. This is a site set up by three steel companies in the US and it provides a lot of business-to-business information – and they don’t have the cannibalisation of revenue to worry about.
“Another example is Vertical Net – a company set up as an instrument for people to create vertical portals for individual sites… All of these include a buyer’s guide, much like a directory.”
Look believes directory publishers are “leaving the door open for others to get in” and says it is their inclination to hold onto information rather than disseminate it that is part of the problem.
He cites Hemmington Scott, the UK financial information provider, as an example of how information should be distributed liberally. Through its site at www.hemscott.co.uk, the company provides free financial information which would otherwise be costly, intruding onto the territory of data providers which charge for similar information, such as Dun & Bradstreet.
Hemscott.Net chairman Peter Scott explains this largesse: “We wanted to increase traffic to the site.”
It has worked. After a slow start, there has been an eight-fold increase in traffic in the past two years.
Hemmington Scott has been a directory publisher for many years and still produces paper-based products, but Scott says the company relies on advertising rather than the cover price of its books.
He says it is directories that contain more time-sensitive information that are being posted on the Web. “It means our customer base is now hundreds of thousands rather than thousands, as is the case with some of our directories.”
One problem many business-to-business publishers face is the cannibalisation of paper-based directory information once it is online. Scott says his company has become aware of this, and the potential conflict of interest with publishers, and is demerging its Net activity from its publishing arm.
Look believes it is a combination of publishing’s corporate culture and the fact that directories are traditional cash cows which has prompted directory publishers to be cautious. “Directory publishing is a managerial culture rather than an entrepreneurial culture, which is why they aren’t seeing the opportunities.”
Embracing the Internet
He says Hollis Directories managing director Gary Zabel is more entrepreneurial, which is why he has embraced the Net and was the only business-to-business publisher to respond to Marketing Week.
Hollis publishes directories for the PR industry and has provided information on its Website for the past two years. It sells a combination package: if you take out a subscription to the book, access to the Website comes free. Zabel says: “As far as we are concerned, we are content providers and the print and Web formats are just different channels.”
Zabel says the Hollis site has had 20 million hits in the past year.
The Website Jobsinpr.com, which launched last month, provides recruitment advertising for the PR industry and attracted a dozen ads in the first week. Zabel says: “This job recruitment product is a major benefit for us as a directory publisher. We now have a potential daily publisher to run job ads.”
It is presumably the start of a potentially healthy revenue stream.
But, despite Zabel’s interest in the Net, he remains loyal to books: “There is a quote from Microsoft which says the Net is trying to achieve the same kind of flexibility and portability as a book. You can’t beat the book.”
On the consumer side, Yellow Pages and Thomson Directories have exploited the Net without fear. Both are launching major ad campaigns in December to promote their Net services.
They have taken the attitude that the ability to spread data far and wide is a good thing. Thomson Directories marketing director Kendall Gordon says: “The key thing about the Net is distribution. You are not bound by the physical limits of a print product or publishing cycles.”
Thomweb is linked to Infospace.com to develop and distribute co-branded content packages to international Websites.
In addition to accessing its Business Finder, which contains 2.2 million UK business listings, users can also find information on their local area, such as places to visit, local history, entertainment and helplines.
Gordon sees Thomweb and the paper directory as “highly complementary”.
“The Advertising Association forecast last year that directories, including print directories, would continue to grow in real terms in the next ten years. There will be increased use of the Net, but for the moment the print directory is still particularly handy in the home,” Gordon says.
Yellow Pages marketing communications controller Nigel Marson views the Net as a completely different market: “We don’t see it as taking an offline product online.”
The difference, according to Marson, lies in where people are looking for information: at home or work. This will dictate whether they go online or stick to the book.
Yell.com, which receives 1.6 million hits a week, provides complementary services in a number of areas, including travel, property and entertainment.
Marson says Yellow Pages, whose paper-based directory has just been redesigned, is acting increasingly as a consultancy for its customers. “For example, with Joe Bloggs Plumbing we would help it register a domain name. For a computer company, we would say set up a Website now.
“We wouldn’t say the same to plumbers. With a restaurant, we would say definitely go into the book, possibly also Talking Pages, and you should probably set up a URL.
“We are a new media company that also happens to produce the Yellow Pages directory.”
Thomson Directories and Yellow Pages have embraced the Web in a way that many business-to-business publishers have not.
Look says: “Business-to-business publishers think only about content and lack the service concept. They don’t have a clue how people use directories.”
He predicts that non-publishers which are providing directory information online “won’t take too long to discover that they would do well to provide a print version of that information” – providing directory publishers with more unwelcome competition.