Optimism and Professionalism

The message from the ADP Annual Convention last week and my colleagues Carlotta Mast and Charles Laughlin's Advisory this week is that independent publishers continue to be growing quite nicely, thank you.

The mood at ADP in Tampa was very positive as President Larry Angove and outgoing Chairman Jim Hail took on a much less adversarial role toward the incumbents than they have in the past. Their perspective this year was one of helping the independent publishers grow, rather than focusing on taking share away from the telco publishers. The conference had sessions on marketing, electronic Yellow Pages and execution.

Charles and Carlotta wrote that independents now hold an almost 20 percent share of the U.S. Yellow Pages market and their print revenues were up 9.3 percent in 2005. "The future looks bright for independents, but like all Yellow Pages companies these publishers are not without their challenges." The primary issue is, of course, the Internet.

Independent Yellow Pages publishers are like weekly newspaper publishers. Their focus is on promising local advertisers that they can deliver a higher return on investment by charging less money and having greater distribution. There are some advertisers that will never leave either the incumbent Yellow Pages or the daily newspaper. But for those on the bubble, the marginal utility is what really matters. Independent publishers find themselves in the middle: They are less expensive than utility publishers but more expensive than Internet publishers. That is why Internet publishing is taking on growing importance, especially in an environment where independents are starting to compete with one another.

According to a recently completed survey of 39 independent publishers by The Kelsey Group and the ADP, "many independents believe their focus must remain on the core product." Fifty-four percent said they believe "the Internet is important, but the opportunity is greater in print." That is an understandable position, but ignoring local search is not going to make it go away.

The ADP held an impressive conference that reflects the increasing sophistication of the independent business. It is enjoyable working in a business that is growing nicely. The challenge is to maintain that growth in a changing environment.