Online research is replacing traditional yellow pages

The preferred method of small and medium-sized enterprises (SME) for reaching their clientele is Yellow Pages advertising. In the US, 46% of SME advertising investments are placed in the printed Yellow Pages Directory. This represents more than triple the investments made in newspaper advertising and far overreaches web site advertising, which represents only 11% of investments. [1] Yet, paradoxically, more and more people are turning away from printed Yellow Pages in favour of online research. In fact, 64% of Internet users who make purchases online prefer search engines to conventional Yellow Pages. [2] Along these same lines, The Kelsey Group found that the proportion of digital research (YellowPages.ca, local search engines, etc.) is expected to jump from 2.4% in 2002 to 24% in 2008 across the entire Yellow Pages market.

Faced with this trend, the leading search engines have invested much energy in constructing “local” versions of their search interfaces to allow visitors to specify the exact region applicable for the search at hand. Yellow Pages editors are also attempting to appeal to this new web-based clientele by offering better online tools. In this manner, more and more value-added functionalities are being offered to Internet users: maps, distance calculators, nearby commerce locators, etc. These recent developments are a foretaste of the intense battles that will be taking place to corner this rapidly evolving market. Recently, we have also witnessed alliances forming between web editors and search tool providers; the partnership created between Quebec and Canadian Yellow Pages (Yellow Pages Group Co.) and Google is a prime example.

For businesses, this situation represents a new opportunity to acquire the customers that competitors have overlooked. How can you attract this growing segment of customers who have changed their research habits?

To begin, you must evaluate your online presence and your capacity to reach this new clientele. Do you have a web site? Does it contain basic information about your company? How does it compare to the sites operated by your competitors? Is it accessible via the new online research tools? Had you placed an ad in a printed directory, you would have performed a similar comparative analysis by verifying the quality of your competitors’ ads. Next, you must evaluate your investments to ascertain whether they proportionally match the number of searches carried out online vs. offline. Any changes in the research processes of your customers should entail a change in your budget allocations. Doing so will enable most companies to determine if they are investing too little in online advertising compared to the returns that it could be bringing them.

Local searches also represent new online publicity opportunities. Previously, it was too costly for a telephone vendor from the small town of Joliette to buy the keyword “telephone,” since this word would have been applicable for the entire national market or associated with certain provincial tools. However, with local searches it is possible to buy a keyword applicable for a particular region only, so only someone searching for telephones in the Joliette area would come across the above vendor’s ad. Online publicity therefore becomes a very efficient way to reach a target clientele.

That said, note that the market is still quite young and that the offers of the various players involved have not yet been fully defined. They should, however, take form quickly and adapt to the SME market. Nevertheless, it is already possible to build a marketing strategy that takes these new possibilities into account and thereby reach the customers that many companies have overlooked.

[1] “Advertising Spending by SMEs in the US by media,” The Kelsey Group, Oct. 2003.

[2] “Online Buyers in the US who prefer Search Engine to printed Yellow Pages and Offline Sources,” The Kelsey Group and Bizrate.com, Feb. 2004.