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MIHMORANDUM
No. 122
September 15th, 2008


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The Value of the Yellow Pages for Small Businesses Today

I wish people would stop thinking that I somehow ‘have it in’ for the Yellow Pages. Certain Sphinn commenters and a few responses to previous posts I’ve written on this blog seem to imply that I am starting from a “gut reaction” when I criticize their value. This is just not the case. I’m going on hard data from my own clients, and analysis of their business models in comparison to their online competitors’.

One long-term client recently had me conduct an analysis of his marketing budget to-date in 2008. His ROI on Print Yellow Pages spend was about 3.5. While ROI on Google Adwords was comparable to the Internet Yellow Pages, his ROI on organic search spend was 18.6.

Let me repeat that–Print YP ROI: 3.5. Organic Search ROI: 18.6.

With that kind of dramatic gap, it’s hard for me not to advise SMB’s to put the vast majority of their marketing budget into organic search, or at the very least, paid search. In fact, that kind of data makes it hard for me to understand how the Print Yellow Pages have ANY real value for small businesses anymore. It stands in stark contrast to the data being presented by the Yellow Pages Association (found this graph on Andrew Shotland’s Local SEO Guide):

I’m wondering what the industries are which were used for this survey–certainly in something like plumbing it would not surprise me to see that sales ROI from print YellowPages would be as high as stated. But for higher-value industries like auto sales, accounting, law, etc., the internet figures seem to be far too close to those from both IYP and PYP.

Chris Silver Smith wrote this excellent Search Engine Land piece on Yellow Pages usage data which became the subject of a rather heated discussion on Sphinn. Stephanie Hobbs, a rep from the Yellow Pages Association wrote her first and only Sphinn comment on the thread, asserting that “we strongly disagree with the notion that people who’ve switched from land lines to cell phones won’t use the Yellow Pages.” Chris argued that people who ONLY have cell phones, and not landlines AT ALL, were left out of the most recent YPA-sponsored data collection. Among the 18-24 demographic, this is an astounding 32.3%, and by my way of thinking, that age group is increasingly likely to use things like, um, THEIR PHONES, or at the very least desktop search, to look up local business information.

Lo and behold Stephanie is a contributor on Search Engine Land. I found her most recent article particularly self-serving — here are her three sub-headlines in the piece, and my responses:

  • “The message is the convenience (not the medium)” Apparently the YP’s value proposition is that they provide people with what they want, in exactly the format they want it. Guess what? So does Google, so does Yahoo, so do any number of Local portals. The question for small businesses should be–which one is going to send me the most relevant traffic, at the lowest cost? Right now, advertising in the YellowPages, either offline or online doesn’t meet either criterion in most cases.
  • “Innovate where it matters” — YellowPages.com has dramatically improved its SEO in the last year or so, as far as I can tell. But it still lags FAR behind Superpages.com and InsiderPages.com, which Local Search gurus Chris Silver Smith and Andrew Shotland are largely responsible for. To date, YP.com has been so far behind in “innovating” it’s laughable. And just this week, Mapquest, which hasn’t been a competitor to date, took another giant leap into an online space that the YellowPages should really be owning, or at the very least trying to own.
  • “Relationships are gold” — My good buddy Will Scott is also big on an on-the-ground sales force, but this is one area where I happen to disagree with him (and Stephanie). Salesmen and women are expensive and inefficient. The truly successful web companies, like Google, like Facebook, like LinkedIn got to where they are today with ZERO sales force. Let’s face it, web advertising is a commodity and shouldn’t require any relationships beyond a good customer service department to answer questions with sign-up. Despite a huge and hugely incentivized sales force, the YellowPages don’t have a monopoly on the most comprehensive data OR the best user experience OR the most relevant traffic, anymore.

The real value of Yellow Pages sites isn’t the Yellow Pages themselves.

Larry Sullivan of LocalBizBits recently authored a post asking about what defines an Internet Yellow Pages website. For those too lazy to click the link 🙂 I will repeat my comment here, which is that the distinction is becoming less and less relevant, but is based on what a site’s primary source of data is.

I’ve said in numerous places on this blog and elsewhere that it is imperative for small business owners to verify their data with infoUSA, the Yellow Pages themselves, and all kinds of IYP-style sites all over the web. From a marketing standpoint, these sites still hold some value in direct traffic, but more importantly hold a TON of value as citations which help businesses rank in the Local search algorithms at Google and Yahoo.

Small businesses should play in as many portals as they have the time and the money to play in.

The point of this post is simply to urge small business owners to take a detailed look at the advertising they’re doing they’re doing with Yellow Pages companies, both offline and online, and figure out whether those sources are providing them relevant traffic at a cost that makes sense. Keep reading Mihmorandum later this week for a terrific example where advertising, and not just getting listed, on a major IYP portal makes a HUGE difference for a real business. To reiterate, while I contend that the Print Yellow Pages are truly dead, advertising in the Internet YellowPages CAN have tremendous value.

In the meantime, it would be nice to see more objective coverage of both the offline and online Yellow Pages, like Chris Smith’s, on major portals like Search Engine Land and less self-serving marketing pieces written by biased sources.