Is It Time to Abandon Your Yellow Pages Advertising?

yellow pages into dumpster Fundamental changes in buyer behavior suggests that, at a minimum, you should be reevaluating your print Yellow Pages advertising.

You may very well want to apply those marketing dollars to creating outstanding online content on your website or on a related blog.

I’ve been researching lately whether it makes sense today to invest marketing dollars in the Yellow Pages, particularly when you have a limited advertising budget.

This decision is critical because a strong Internet presence is fundamental to successful marketing strategies for even small businesses. If you have limited dollars, you must choose wisely by understanding some powerful trends that are rearranging the Yellow Pages landscape.

What’s happening to the print Yellow Pages?

To get a sense of usage and results trends, I started to dig into the state of the Yellow Pages, by looking at available online research. I also conducted an informal survey among some very active business colleagues, believing they are representative of the kinds of people who are supposed to be using the Yellow Pages.

When I poked around Yellow Pages related sites, the first thing that I noticed was that much of the research quoted was outdated. If this was 1998 rather than 2008, that might not make much difference. But buyer behavior is changing so quickly that outdated research designed to prove Yellow Pages’ effectiveness is suspect.

Outdated or not, it’s quite clear that usage of the print Yellow Pages is declining. For example, a 2002 article in the American demographics in 2002 suggested that users in 1996 referred to the Yellow Pages an average of 1.8 times per week. By 2000 that had declined to 1.4. That’s a drop of 22% in four years.

Industry biggie, R. H. Donnelly, cites a number of research studies on its website, most of them from CRM Associates, whose research is quoted frequently on the websites of different Yellow Pages vendors. Although this is a current website as of January 2008, none of the research is more recent than 2005–and two thirds of the references are from 2004 or earlier. In any case, they state that “Since 1985, 50% of the population uses Yellow Pages more than one time per week.”

Not only does this mean that half the population doesn’t use the Yellow Pages more than one time per week but it also suggests that researchers are averaging data over the past 20+ years to come up with a number that may well overstate usage levels.

In fact, I could not find current data for actual buyer behavior on any of the Yellow Pages online media kits. That is, although they may site industry studies, they are not telling us what their own directory users are doing. Therefore, I decided to do an e-mail poll of business colleagues to determine their usage of the Yellow Pages . Here are key data points from the informal study:

  • Average age of the respondents is 44; 84% are 50 years old or younger.
  • There is essentially no correlation between age of respondents and Yellow Pages usage.
  • not a single respondent is using the Yellow Pages more than one time per week.
  • 24% never use the Yellow Pages.
  • The average usage is 5.4 times per year–that is a far cry even from the 1.4 times per week cited above.
  • 71% of respondents use the Yellow Pages five times per year or less.
  • Only three respondents are using the Yellow Pages more than one time per month.

Of course, this is a small sample and is not statistically projectable. however, I am confident that it is representative of current buyer behavior. The data is clear: Yellow Pages usage among this set of active business people is way below the numbers being cited in older research data.

This tracks with recent articles talking about the threatened existence of the print Yellow Pages directory. Here’s what one industry expert had to say:

“For Yellow Pages, the key question is whether the print product will emerge as healthily as it has after previous downturns,” Charles Laughlin, senior vice president, the Kelsey Report (as quoted in Forbes.com).

He went on to suggest ominously:

“In the past, small and medium-sized businesses have protected their print Yellow Pages investment at the expense of other media. Given the structural changes in the local ad market, we believe the next downturn will favor media choices that are more flexible and provide a lower cost per lead than print directories, which would signal a profound shift.”

Where will all those Yellow Pages advertisers go?

In a December 20, 2007 Wall Street Journal blog about whether advertising and Yellow Pages still works for small businesses, they quoted a recent study which said, “About one in five (21%) of respondents cited it as the source that produces the most calls from potential customers. Word-of-mouth is a close second, cited by 19% of respondents, and company Web sites are next, cited by 12%.”

Here’s what I think is really interesting about these statistics: although the Yellow Pages came out number one, they were only slightly ahead of word-of-mouth–and company websites came in at a strong number three, not that far behind the Yellow Pages. When you consider that the respondents were all businesses with 25 or fewer employees, this statistic is even more meaningful. Why? Because the majority of small businesses don’t have websites. And even if they do, most of them probably are not very good. That makes his third-place finish astonishing.

Imagine if these same small businesses were devoting very Yellow Pages advertising dollars to creating great websites! Imagine, too, that they were driving traffic to those websites through the use of excellent content and intelligent search engine marketing! You can be certain that what is already a good source of leads would be a phenomenal source of leads. Moreover, once the website is up and running, the annual maintenance cost is a small fraction of what Yellow Pages advertising would be costing. This has dire implications for the traditional print Yellow Pages.

In a 2006 study by the CMR Associates as cited on the BellSouth directory site, they said, “The last advertising impression has the greatest impact on consumer decisions.”

There was a time when the Yellow Pages represented the “last advertising impression” but today company websites and blogs represent the last advertising impression. Even better, if you have a content rich website that’s easy to find, that website may be both the first and the last impression on your customers.

Should you abandon your print Yellow Pages advertising?

If you can trace profitable business that exceeds your annual cost of advertising in the Yellow Pages, you should probably continue.

But, if you’re advertising there simply because you’ve always done it or because you heard that you “have to be in the Yellow Pages,” it’s time to rethink how you invest limited funds. Your marketing dollars can generate a much better return when you focus on providing relevant and valuable content that turns your visitors into customers.

Stay tuned for a follow-up post on online Yellow Pages. You may be able to generate profitable results with the right approach by advertising in the online cousin of the venerable directory. Unfortunately for the Yellow Pages providers, they will have a tough time surviving in direct competition with Google and other well-established search engines.

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17 Comments

  1. Posted January 13, 2008 at 9:42 pm | Permalink

    Great research, Newt. Another consideration is that there are usually multiple yellow page directories in each community. For example, with one client of mine we deal with three separate directory companies and have to do four separate books for two markets.

  2. Posted January 14, 2008 at 8:11 am | Permalink

    Thanks for this. I was just wondering the other day as I passed by the stack of yellow page directories that I’ve relegated to the garage…is anybody really using those for business advertising. It used to be ‘de rigeur’ for any business or professional practice. But you still need to research a business online to see what they and/or other people are saying. Business blogs provide that opportunity to get to know something about a professional before you call them. I don’t think yellow page directories will disappear altogether but at least there will be a huge reduction in numbers and volumes. More than a few trees will be spared…

  3. Posted January 14, 2008 at 5:05 pm | Permalink

    Interesting piece on YP usage. One sure way to know if your calls are coming from the YP’s is to use different phone numbers in different media and then track the calls using a service like CallSource.com. Sorry about the plug but I’m using them with a couple of my clients and have had some interesting results. Some of the trends I’ve noticed are, older folks still use the YP’s, consumers in HH’s with less than $75k are still heavy users of YP’s and consumer in rural markets are still heavy users. If these aren’t your target markets then I would look at my YP spend very closely.

    Jim Hicks
    The Buntin Group

  4. Posted January 15, 2008 at 10:04 am | Permalink

    We are getting a lot of excitment around The Brownbook (http://www.brownbook.net) because its a free peer-produced yellow pages. Its free to add your business which makes it perfect for small and local businesses that want to get listed without all the hoops that you have to jump through with the big-company-owned yellow pages.
    J
    http://www.brownbook.net

  5. David Carranza
    Posted January 22, 2008 at 11:26 am | Permalink

    The Yellow Page book makes for a great child booster at the dinner table. So you could say we might use it more than one time per week……..Not a believer in the book!

  6. Newt Barrett
    Posted January 23, 2008 at 10:30 am | Permalink

    David,
    Thanks for the laugh. We actually have 3 different versions of the YP(that’s a whole different problem–too many versions) and they live in a pantry not next to my desk as they would have 10 years ago.

  7. Posted February 11, 2008 at 4:52 am | Permalink

    I have to agree that this overwhelming trend is evident all over the world – in Australia, where my company publishes niche online directories, we are constantly dealing with advertisers who place their yellow pages advertising dollars in online advertising – a direct swap, rather than a ‘a bit of this and a bit of that’. It is like they wake up one day and see how the world has changed, and then decide to stop spending their money that way in its entirety. It is fascinating really. Good article, thanks for that.

  8. Julie
    Posted March 27, 2008 at 1:43 pm | Permalink

    I have a small buisness in a metro area and I will have to say that I have had great results with my yellow page advertising. I have found that 80% of my new buisness comes from the book still. I have a call forwarding tracking number in my ad so I get a monthly report on how many calls come in from the book and I am averaging 200 a month. I have tried other types including direct mail like valpack and coupon saver and even radio commericials and none of them keep my phone ringing like my yellow page ads. I will advise though to be careful with some companies. I was using At&t for years and found out that I was overpaying by A LOT!!! I switched to a company called Yellow Book 3 years ago and have been very happy. The price is remarkably less and I get the same results. I highly recommend using one of the tracking numbers though because it is hard to track advertising when you just ask people how they found you. I have been in buisness for over 20 years and I can tell you that your customers are not invested in your buisness like you are so they are not going to be able to give you a detailed report on exactly how they chose you. Most just say referral evening if they were not really referred! I find it commical now. So there is my piece! I guess just remember just because you do not personally use the book it does not mean everyone is not.

  9. Newt Barrett
    Posted March 28, 2008 at 8:13 am | Permalink

    Julie,
    I’m glad that you are having great YP results. What kind of business do you run and where are you located? Do you have a website?
    One thing to note is that I based my comments on the reduced effectiveness of the YP on reported facts and on my own informal survey–because you are right. One cannot simply make a decision in a vacuum, based on your own experience.
    Newt

  10. Posted January 22, 2009 at 12:30 pm | Permalink

    Combine the downward trend of yp usage and the upward sales of smart phones and I suspect by 2012 we’ll be picking up our phone to surf for the listings we used to get from the yp.

  11. John
    Posted February 5, 2009 at 11:50 am | Permalink

    Here are two different (and recent) studies that discuss how consumers use both online and print media to search for local businesses.

    While the studies disagree as to whether consumers first turn to print Yellow Pages or search engines, it’s clear that both are being widely used; and it’s a more accurate gauge of how you should market, rather than any single individual’s “research.”

    CONSUMERS COMBINE INTERNET, MOBILE, PRINT IN SEARCHING FOR BUSINESS INFORMATION
    “Nearly half (48%) of consumers report print Yellow Pages as the resource they turn to most often for information on a business or service, and more than three-quarters (77%) use the print Yellow Pages overall. Search engines (49%) are the second most-turned-to source, followed by Internet Yellow Pages (36%), and free or fee-based 411 (30%).”

    Source: http://www.marketwatch.com/news/story/Consumers-Combine-Internet-Mobile-Print/story.aspx?guid=%7B267979EC-4048-4E52-B54E-D9FC031A1DE8%7D

    FOR LOCAL INFO, USERS TURN TO SEARCH ENGINES, YELLOW PAGES; MOBILE SEARCH UP
    “The first sources that Americans turn to for local business information are search engines (31%), print Yellow Pages or White Pages (30%), internet Yellow Pages (IYP) sites (19%) and local search sites (11%).

    “Those results differ from last year’s study, which ranked Print Yellow Pages first (33%), followed by Search Engines (30%).”

    Source: http://www.marketingcharts.com/print/search-engines-yellow-pages-used-to-find-local-info-mobile-searches-on-upswing-6459/

  12. Mike Peterson
    Posted July 12, 2009 at 2:05 pm | Permalink

    YP ads in urban areas are a complete waste of money. We had a 1/4 page ad in the Yellow Books that cost us $600/month. We also have a web site that costs us $5/month. For FY2006-2008 the breakdown of new business is as follows…
    Google: 90%
    Yahoo: 5%
    Newspaper: 5%
    Yellowpages: 0%

    That’s right. Not one darn customer from the YP.

    The people at the Yellow Book also boast “our web site is as popular as google”. Oh yea…zero clicks from the YB web site for the past 2 years.

  13. Dave
    Posted September 8, 2009 at 6:43 am | Permalink

    This is so UNTRUE! There are so many websites out there, who is to know which one to do your advertising? (not to mention, you have to pay per click.)Google? no. Advertising on Google is horrible. Your listing could be several pages down where no one goes. I know I dont. Also, google brings up so much needless info, it gets frustrating trying to find anything. The phone book hasn’t gone anywhere and wont be for many many years to come. Everyone returns to the yellow pages. That is a statistical fact. Internet advertising is something to consider more maybe 10 years from now and is definately not for small business.

  14. Dave
    Posted September 8, 2009 at 6:47 am | Permalink

    One more thing to ad…
    People that are ready to buy turn to the yellow pages. Imagine one hand on your wallet and the other on the book. They dont go to the yellow pages to read, they are there because the already know that they need and want and are ready to buy.

  15. David
    Posted September 8, 2009 at 6:51 am | Permalink

    Mike, where do you think that they got your phone number? Do you think that they will remember what website they saw it on? I guarantee you are not giving the credit to the phone book that is due. Chew on that

  16. Newt Barrett
    Posted September 8, 2009 at 7:05 am | Permalink

    Dave, thanks for your 3 related comments. Following David Meerman Scott’s example, I always ask attendees at talks I give how many have used the YP in the last 30 days to buy a product. Typical of the results was a talk I gave recently to SCORE, an audience of retired execs, almost all over 60. Only 10% raised their hands to say they had used the YP. Conversely, 90+% had used Google or another search engine.
    Of course, you do need to do something to stand out on the web; that’s what content marketing is all about–provide great content that gets great search engine results. For example, my site comes up at the top of Google search for ‘content marketing’ because I have provided lots of relevant content on the topic. I haven’t paid Google anything for that.
    Finally, if you talk to small business owners as I do all the time, you’ll find that they are moving $$ away from the YP because they just don’t work very well anymore and because an effective website does work very well.

  17. Posted January 7, 2010 at 9:19 am | Permalink

    I agree the phone book advertising is a waste of money for my company. 20 years sevice company in Washington DC Metro market. I cover 11 markets here and had 1/4 to whole page adds running. Spending 8000.00 per month. I’m getting 90% of my business from the web page I built which took me 2 years of studing to understand how to provide content and SEO. I have drop my ad’s to a bold line ad phone number and wwww adress, my monthly cost are now 300.00 for those 11 markets. I was spending more then I brought in, I cannot afford the business the phonebook was bringing in and just assume to lose it. In large urban markets with highspeed internet I’m guessing less then 10% of folks use the book. With it high cost I can’t image them being in business much longer. Yes it does make a nice child booster seat.

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