The once flourishing Yellow Pages industry was one of the many victims of the onslaught dealt at the hands of the digital revolution. These legacy directories were unprepared for the speed and force by which the digital economy was to take the reins in advertising, marketing, and most other industries.

When the rate of change on the outside exceeds the rate of change on the inside, the end is near.

Jack Welch

Former Chairman and CEO, GE

But, it’s not all doom and gloom for companies in the directory and yellow pages spaces. Mergers and consolidations have run rampant across the Western world, but the reality is that these are only a temporary fix. Clients and revenues are in decline. Transformation is a necessity. 

The directories that will still be standing in a decade will be those that have become full-service digital marketing and advertising providers. 

Yellow Pages: A Rich History

The first official Yellow Pages directory dates all the way back to 1886. This was a print directory that listed the telephone numbers of residents and businesses. From 1886 until the phased end of most print product earlier this year, “phonebooks” like these were distributed for free to residents around the world. Revenue was generated through sales of advertising slots in the phonebook. 

For a generation before the internet, the phonebook was a right of passage and a means of surviving the day-to-day. If your kid flushed another toy down the toilet and you didn’t know a plumber, then you better bet that you were turning to your phonebook.

houston yellow pages

The most recent piece of directory history was the advent of the “IYP”. This is essentially the name attached to all online business directories; or vertical specific directories. These directories are many and can be consumer or business facing. 

Some names you might recognize include: Yelp, Better Business Bureau, Foursquare, Angie’s List, and many more. Traditional Yellow Page companies have also morphed into digital directories, with the Yellow Pages directory ranking one of the top ten listing sources in the world, alongside many of the names mentioned above. 

The industry has evolved. The final Yellow Pages phone book was printed in 2019. Most remaining Yellow Page companies are in the process of becoming full-service digital marketing agencies, or else developing proprietary tech of their own to take to the local business market (ex. Thryv).

Some Yellow Page companies are weathering the storm, but many were washed away by the tides of change. Here’s where it went wrong.

Yellow Pages: Fatal Errors

Make no mistake, many directories are struggling. The industry is running rampant with mergers and acquisitions, but this is only a short-term fix to the long-term reality; digital reform or death. 

How did this happen?

1. Underestimating the Long-Run

Most directories and yellow page companies didn’t fully see digital coming. But backup. Most companies saw that the long term answer was in digital, but most of them underestimated the impact of short term changes on long term goals. In fact, that sounds a lot like Amara’s Law:

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

It looks something like this:

Amara's law for underestimating the long-run

Wikipedia—and everywhere else on the internet

2. The dot.com Confusion

One of the most confusing parts of the dot.com boom was the lack of impact on YP companies. In fact, as the digital market began to flourish in the late 90s, YP revenues also hit record highs. These were confusing signals for everyone.

This graph showcases Yellow Pages Ltd (Canada)’s stock trajectory over the past 15 years. The company actually achieved record share prices in 2006. But, do you know what else was happening in the neighborhood of 2006? LinkedIn launched in 03, Facebook in 04, YouTube in 05, Twitter in 06, and Google was approaching age 10. It would’ve been difficult for even the best analysts to predict the landslide that would ensue in the decade to come.

3. The Experience Equation

The strength in early digital alternatives compared to traditional tactics (like phonebooks), was not simply the fact that they were inherently digital and different. The strength rested in the way that digital transformed the user experience and the way consumers could interact with their advertising.

The core of digital solutions lies in the almost complete reduction of both user and customer toil. The digital evolution transformed expectations through automated behaviors, a service emphasis, and better performance reporting.

Directories and YP companies missed the memo in transforming their user experience as digital took the advertising economy by storm.

Yellow Pages Tomorrow

Yellow Page companies are in the midst of shifting to digital, but there’s still work to be done. Customer loss (churn) and the lingering impacts of “Yellow Pages” reputations are some of the greatest challenges facing YP and directory companies as they embrace the next decade. Mobilization of resources to deploy digital strategies and combat churn will be a key determiner of success and survival as we round the beginning of the next decade. 

Here are the real strategies that are working today for yellow page and directory companies.

1. Launching Sub-Brands or Rebranding Initiatives

In most Western markets, Yellow Page companies are intricately intertwined with their names. The once powerful Yellow Page name now acts primarily as a consumer signal of an extinct traditional media outlet. As a result, many of the brands that are “thryving” today (pun-intended), are those operating under new names or name extensions.

For example, DexYP (the American giant) recently rebranded their entire company under their proprietary small business software (Thryv). This is sure to be just the beginning of major rebrands to take place in the directory space.

2. Offering Digital Marketing Solutions

Legacy Yellow Page clients came to you for one simple reason: advertising. Yellow Pages used to be a near necessity in the marketing portfolio for most local businesses. But then consumers increasingly took their product searches to the internet. With that, social media, digital ads, search marketing and the rest of the internet ecosystem gradually eroded away the need for Yellow Page marketing. Clients’ needs have changed, and so too must YP solution sets. 

There are a few problems for YP companies going digital though...

Many YP companies  are in the middle of a slow digital transformation or stuck in a transformation holding power—it’s not easy overhauling a business model. The main roadblocks being: 

  1. Developing proprietary solutions in-house is laborious and costly
  2. Vendor integrations are complex, expensive, and detract from your brand value

But, there are other options. Many YP companies are moving to work with white-label companies like Vendasta as a means to skip the custom development process, while also maintaining brand recognition through the deployment of new technology. 

This is what a white label marketplace could look like for a Yellow Page company:

yellow page white-label marketplace

Local clients are looking for a marketing partner that can provide them with the most value in a single stop. In fact, a recent Vendasta churn study proved that selling a small to medium sized business (SMB) a single solution proved a retention rate of only 30% after two years. Selling that same SMB 4 products drove that retention rate up to 80%. That is the opportunity in digital marketplaces.

Companies like Yellow Pages Canada have realized this opportunity and are currently offering solutions to meet a breadth of business needs in the digital space.

Yellow Pages Canada digital offerings

3. Leveraging Automation to Lean-Up

Human capital is the most costly of all. The trouble with adding new digital offerings is that you then have to learn how to sell them, and create new marketing messages, sales tactics, scripts, and more.

The YPs and directories that are succeeding are those that have adopted powerful sales and marketing platforms that can help them automate the sales process, so they can minimize toil and maximize sales efficiencies. For example, the Snapshot Report is an automated prospecting tool that helps Yellow Page companies perform a comprehensive needs assessment on any potential business in their market.

4. Proving Performance

Another major problem that often accompanies vendor integrations is the fragmentation that occurs when different products may not communicate effectively. Worse yet, when they can communicate, it might be through various login portals and gateways, creating a dissatisfactory user experience. This is a challenge, but can also be a major point of differentiation for directories that are able to synthesize their reporting into a comprehensive dashboard.

In fact, according to the Vendasta Churn Study, SMBs who receive regular proof of performance reports have a 38% increased retention rate compared to SMBs who do not. 

Here’s what a comprehensive dashboard could look like in the hands of a business client.

business facing reporting dashboard

5. Offering Services to Get Stickier

You get it, SaaS products are an entry requirement to the modern advertising ecosystem. However, not every marketing and advertising provider in your competitive landscape is providing clients with services and fulfilment to compliment their product offerings. 

They’re missing out because services are the glue that binds in a B2B relationship. In fact, engaging with your clients weekly increases retention by 26% alone. If you can offer your clients all of the products they need and the services that can enable them to spend less time doing manual marketing work—then you’re going to be the partner that lasts. 

Final Thoughts

It’s not just the Yellow Page sector that’s amid turmoil; digital disruption has left virtually no industry unharmed. Recent news showed that TV ad spend fell 4% in 2019, representing the greatest drop since the 09 recession.

It’s simple. Digital is no longer a choice. The market has evolved and so must the Yellow Page and directory spaces. Fortunately, most remaining directories are already in the process of doing just that. 

This is the future for directories. Will it be yours?