Six Trends (A Decade Later)

Ten years ago, The Kelsey Group was asked to make a general session presentation at the Yellow Pages Publishers Association annual convention. Although titled “Six Trends That Will Shape the Industry in the Year 2010,” we chose instead to make six predictions about what the Yellow Pages industry would be like 13 years from then. These were designed to be thought provoking and to encourage the ongoing evaluation of every element of a publisher’s business. With the close of this year’s YPA today, this seems like an appropriate time to revisit our thoughts about where the industry might be.

The predictions were built on a number of assumptions about the world in general, and the Yellow Pages industry in particular. For each one of these, we went into the issue driving the trend, the product/service transformation, the adoption cycle and the issue for the industry to consider.

1. Yellow Pages publishers will have a 3% share of the U.S. advertising market.
2. There will be little more than listings in five top headings within print directories.
3. There will be more revenue from transactions than from print advertising.
4. Mobile directory usage will exceed print directory references.
5. With consolidation, there will be two major Yellow Pages companies.
6. Directory providers will create interactive products in vertical markets.

A large number of people requested a copy of our presentation, and our accompanying letter said the following:

“We did not make these predications in order to cast a dark cloud over the industry, but rather to highlight the opportunities available to those of you who face up to change and learn how to capitalize on it. And, by extension, the consequences to those who do not.

“The Kelsey Group has long believed that the print Yellow Pages industry will continue to be profitable for many years to come, but we are concerned that the directory business will be increasingly seen as a cash cow for the utilities. After growing at 4%-6% for the next few years, technological change and the speed of consumer acceptance of those new technologies will put pressure on the print product. The industry is also going to be challenged by rapid demographic change, as well as such external competitors as category killers, the Internet and al of the other local media fighting for the same advertising dollar.

“In our judgment, customer intimacy through the sales force will be seen as the most critical core competency of a directory publisher. However, to survive in a rapidly evolving market, R&D expenditures must be increased and partnerships will be a requirement rather than an option.

“Again, you may not be enamored with our predictions, but unless we all accept and encourage change, the industry is in serious danger of losing its position as a major medium. That is essentially the same message being delivered by the leadership of the Yellow Pages Publishers Association that the Yellow Pages industry must improve its operational efficiency, target new markets with new products, aggressively promote the medium and invest in new technologies. This is a unique time in the history of the print media, and the Yellow Pages industry has the potential to be a big winner.”

While we could never anticipate all of the changes, in particular we underestimated the growth of independent publishers, we were not too far off the mark. Importantly, The Kelsey Group continues to believe that our industry will be a big winner.