Companions Migrate North to Canada

We noted with interest the recent move by Canada’s Yellow Pages Group to introduce a companion directory in the Calgary, Alberta, market along with this year’s core directory.

YPG’s decision to introduce a companion book may be related to a resurgent competitor in the Calgary market. Canpages, owned by the private equity HM Capital Partners, has invested in the Calgary product it acquired more than a year ago from the U.S. independent publisher Phone Directories Corp.

Calgary is YPG’s largest book based on distribution, with more than 663,000 copies distributed. YPG plans to distribute 415,000 companions along with the core books, amounting to a 60 percent boost in distribution. YPG will charge about a 15 percent premium for presence in the companion.

YPG seems to be taking a page from the U.S. incumbents that have used companions with some success as a way to drive up call volumes for their advertisers, and to lock up available SME ad budget in the hope of keeping it out of the hands of independent publishers.

The knock on companions (voiced by their competitors and some advertisers) is that the new books do not create real value, but simply charge advertisers a premium to receive what they used to get from the core book on its own. Whether this assertion is true or just sour grapes will be made clear by how well the companions retain advertisers over the next few publishing cycles. Advertisers will try new things, but they will not stick with them long term if they don’t work.