Dex Media, the newly minted company that was once SuperMedia and Dex One, is counting on a strategy of serving as the “outsourced marketing partner for small-businesses” as they wade into the complex and confusing world of digital media.

That was a key message from this mornings investor call to reveal the Q1 results of predecessor companies, as well as talk about what the future holds for the new company.

The company’s CFO also suggested that the wave of consolidation in the North American directories industry may not yet be over.

In response to a question about any additional consolidation on the horizon, CFO Dee Jones replied, “We have always been an advocate for consolidation….This is a little premature. Right now we are focused on getting this one integrated, but we are always looking at opportunities.”

This statement may fuel speculation that some further combination may eventually be in the offing. In addition to Dex Media, possible players in any future M&A wave might include YP Holdings (majority owned by Cerberus), Yellow Media (Canada), Yellowbook (Hibu’s U.S. operation) and possibly smaller players like Berry.

Dex Media CEO Peter McDonald acknowledged that Q1 results were “below expectations.” The company reported the two predecessor results individually, with ad sales dropping by 17 percent and 16 percent at Super Media and Dex One respectively.

Looking ahead, McDonald sees Dex Media taking advantage of marketplace confusion, where SMBs need help wading through the myriad local media choices they face. Complexity drives outsourcing, McDonald contends, summarizing Dex Media’s opportunity. He added that Dex Media is “agnostic about how we drive leads” which he believes gives the media company credibility with local advertisers.

McDonald emphasized the need for Dex Media to sell more new products to existing customers (retention is much higher among customers buying more than one product), and to do more to bring in new clients. On the latter point, McDonald described three programs aimed at attracting new customers. The first, which he called “Get Started,” involves a team dedicated to converting inbound leads into new business. McDonald also cited “Encore,” the company’s pay per call initiative and text marketing as key drivers of new customer acquisition.

McDonald said 70 percent of Dex Media’s text marketing clients are new customers, all of which are offered additional Dex Media products. The company is in the process of rolling out text marketing in stages.

“We get more from add on products than from text marketing itself,” McDonald said.

During questions and answers, McDonald refused to bite when asked if his print business would still be around in five years. He countered that research (presumably from the Local Search Association) shows print usage is still significant among those 45 and older, suggesting there is longevity remaining in the traditional product.  He also noted the financial incentive to support print.

“Print is still a strong cash-flow machine for us.”

The post Dex Media Banks on ‘Trusted Advisor’ Role appeared first on BIA/Kelsey - Local Media Watch.

SuperMedia and Dex One completed their merger today, creating Dex Media, a company with annual revenues of approximately $2.6 billion (based on combined 2012 revenues), with about $500 million in digital revenue. The combined company also has 2,700 sales reps and roughly 665,000 advertisers.

The combined company is the second largest directory publisher in the United States, following YP Holdings, which according to BIA/Kelsey estimates had roughly $2.8 billion in 2012 revenue.

The new company is being led by CEO Peter McDonald, who was CEO of SuperMedia and was previously president of Dex.

“We intend to seize the opportunity to create additional value for existing and new clients, employees and investors. I want to recognize the outstanding performance of Dex One and SuperMedia employees over the past few years to transform the companies and make the merger and creation of Dex Media possible,” McDonald said in a statement announcing the merger’s completion.

By joining forces, SuperMedia and Dex One will have more time to effect a successful business transformation than they would have as separate companies. The combined company will be stronger and better able to weather the storms on the changing local media landscape. The combined company will be both a tougher competitor and arguably more attractive strategic partner based on its expanded footprint and enhanced financial stability.

The merger’s approval coincides with the two companies’ emergence from pre-packaged Chapter 11 bankruptcies. A judge at the U.S. District Court in Delaware approved the two companies’ reorganization plans yesterday, paving the way to finalize the deal.

While the companies are formally merged, much work remains to combine the two organizations and realize the $150 million to $175 million in annual cost synergies the deal is expected to produce.

The post SuperMedia and Dex One Reborn as Dex Media appeared first on BIA/Kelsey - Local Media Watch.

Ads aren’t just valued for bringing in calls and walk ins. Local businesses increasingly place value on consumers looking up maps and directions, or participating in loyalty efforts, notes SuperMedia Director of Mobile Development Chris Folmer, who was speaking on a panel at The Local Search Association conference April 16 in Las Vegas. “There are lots of ways to drive true value,” he says.

Loyalty programs represent a real growth opportunity. Consumers are already engaged with the client. They need to maintain the relationship,” says Folmer. He notes that SuperMedia is rolling out a number of new loyalty programs. The programs are great acquisition tools. They are “really good to talk to new clients about. They really like it.”

The traditional backbone of loyalty programs have been text messaging, he adds. Texts really deliver results, and are “exploding” for SMBs. The key is to “get people to want to engage in content.” But they can also be tricky because they are so easy to unsubscribe from. “It only takes one bad offer for someone to opt out,” he notes.

Speaking on the same panel, Placecast SVP Blair Swedeen also emphasized strong results from text-based programs. Promotions sent out when consumers are near a store result in a 2.5 x boost in frequency, and a 22 percent purchase rate. There is also a 5 percent increase in average order value, he notes.

Increased smartphone penetration has greatly expanded the universe for smart offers, says Swedeen — smartphone users will also get push offers on their Apps and emails. “Most customers want delivery across all channels,” he says.

Edo Interactive VP Jeff Fagel says that texts in fact have already been surpassed by smartphone emails. Apps are also proving to be very effective. Merchants that have a promotion on a mobile app are seeing a 20 percent boost in their response rate.

Redemption rates are also soaring. A program that Edo ran with Subway, for instance, achieved a 15 percent redemption rate across the board. It drove the value of purchases up 30 percent. Moreover, 40 percent of those customers who redeemed offers came back at least once or twice in the next 90 days.

The key is driving “the right offer to the right customer,” and keeping it simple, adds Fagel. “There is nothing as impactful as ‘thumbs in faces,'” he says, noting that mobile offers will see 10-15x redemption rates of traditional coupons.

The post LSA 2013: Mobile Promotions Showing True Value appeared first on BIA/Kelsey - Local Media Watch.

Last week several of the leading listed directory companies saw sizable spikes in their stock prices following their Q3 earnings announcements, though the surge seems to have died off today.

For example, Dex One announced its earnings on Nov. 3. On the call, CEO Alfred Mockett revealed that Dex will not achieve its previously stated goal of returning to growth and reaching 30 percent of revenues from digital in 2012. Yet the company’s share price doubled on Nov. 3 to 1.29 per share, up from the previous day’s close of 0.64.

SuperMedia also got a boost that day, though a less dramatic one. Its share price rose to 2.47 from 1.85 at the Nov. 2 close. Also Canada’s Yellow Media, which has experienced a dramatic fall in its share price in recent weeks, got a nice bump last week after its earnings announcement, also on Nov. 3.

So why the gains? It may be that there is increasing confidence that publishers have a chance to turn the corner with new digital products. Even though Dex announced it would not meet targets it made quite a big deal of at its February investor day meeting in New York, it did make a case that it is making real progress on the digital side of its business. The company announced on the call that digital revenues grew by 15 percent in Q3 and now represent 16 percent of revenues. Dex noted its SEM business in particular has hit its stride and grew by 30 percent.

It appears to be just a coincidence that all three companies are also at times mentioned in ongoing speculation about consolidation of the North American directory industry. At BIA/Kelsey’s recent DMS ’11 event in Denver, Joe Walsh, then the CEO of Yellowbook, said quite directly that consolidation will and should occur within the next one to two years. It’s important to note that Walsh mentioned no company by name in his remarks.

The post What Was Behind Last Week’s YP Stock Spike? appeared first on BIA/Kelsey - Local Media Watch.

First-quarter 2011 earnings reports are trickling in across the global Yellow Pages industry, and while the results are still largely negative, there are some signs that the rate of revenue decline is leveling off. This is consistent with what BIA/Kelsey has forecast for the Yellow Pages industry — a leveling off of print declines leading to a return to very modest growth by 2013.

SuperMedia, for example, reported that its advertising sales for the first quarter were down 17.8 percent this year, compared with a 20.4 percent drop in Q1 last year. Operating revenues were also down 17.8 percent, compared with 20.9 percent in Q1 last year. These are not monumental improvements, but they suggest some progress in stemming the flow of red ink.

At Dex One, ad sales declined roughly 17 percent vs. 19 percent a year ago. CFO Steve Blondy noted that were it not for the impact of TMP’s failure to pay money owed the publisher (TMP is currently winding down its operations) the ad sales decline would have been 14.7 percent, a more substantial improvement over Q1 2010.

Similarly, SuperMedia’s CFO Samuel Jones said factoring out the TMP impact would have given the company a Q1 ad sales decline of 15.9 percent, which amounts to a 450 bps improvement over Q1 2010.

AT&T’s results were essentially the same, down 16.6 percent in Q1 vs. 16.7 percent a year earlier. However, online growth continued to slow down, to a 6.8 percent increase vs. 12.9 percent last year. This suggests the rate of decline in print has settled a bit, otherwise the overall revenue decline would have accelerated.

AT&T has been arguably the most aggressive U.S. publisher online, and has recently added a number of new digital products, including reputation management and, most recently, deals. The slowdown in digital growth is likely a combination of the economy and the law of large numbers, since AT&T has roughly a billion in digital revenues. However, the slowdown might also suggest that IYP is maturing and new products are taking on greater importance as sources of new growth.

Across the pond in France, PagesJaunes reports its group revenues declined by just 1 percent for the first quarter, while its print decline was 7.5 percent, an improvement over a 10.2 percent drop in Q1 2010.

Collectively, these results seem to point to stabilization, defined as a leveling off of the rate of decline. This is probably the result of improving economic conditions, which includes steady improvement in bad debt ratios. This is consistent with the view that the decline in print revenues was the result of a combination of economic and transformational factors. The degee to which growth rates improve this year may be a pretty good indication of which portion of the recent declines have been cyclical vs. secular.  

None of these Q1 numbers is going to lead to any champagne being uncorked, but they do suggest that after a couple of very rough years, the worst may be over, at least for now.

The post Q1 Results Show Some Hopeful Signs for YP appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey understands that the company’s largest debt holders have been conducting a thorough review of the business, and this action may be one of the outcomes of this effort. Klein’s departure was announced without the usual pleasantries that mark an amicable parting. The press release announcing the change did not thank Klein for his service or mention any of his accomplishments while CEO.

Klein, who joined SuperMedia in June 2008, is best known for leading the company through its bankruptcy and name change (Idearc exited bankruptcy at the end of 2009 and was then renamed SuperMedia), and for implementing the SuperGuarantee, a program that has helped raise the profile of the SuperMedia brand. However, Klein invested heavily in promoting the SuperGuarantee. Any significant investment in Yellow Pages in the current environment creates pressure for quick results.

Klein’s is another in a series of departures as directory boards worldwide are wasting little time changing leaders when results fail to materialize. Most recently Eniro CEO Jesper Karrbrink and European Directories CEO Cornel Riklin were removed. Karrbrink was removed expressly to bring in a CEO with more experience negotiating with banks. Eniro is pursuing a restructuring of its debt and needed more expertise than Karrbrink had in that area. The company has endorsed the content focused strategy that Karrbrink had put in place, and most of the team he assembled remains in place.

Little has been said publicly about Riklin’s departure. He was recently replaced on a European CEO panel at the European Association of Directory Publishers conference in Venice by company COO Ben Legg. European Directories recently completed a process in which its primary owner, Macquarie Capital, wrote off a majority of the company’s debt.

Closer to home, DexOne’s longtime CEO Dave Swanson retired earlier this year and was replaced by Alfred Mockett, a former British Telecom executive who once had responsibility for Yellow Pages before BT spun off what is now Yell in 2000. We spoke with executives who were familiar with BT during Mockett’s tenure, and they describe him as a consummate deal-maker. The question is, if that is so, what deal is he planning to make? One obvious possibility is the combination of DexOne and SuperMedia, assuming it creates enough synergy to make sense financially.

The post Klein Out at SuperMedia, McDonald In as Interim CEO appeared first on BIA/Kelsey - Local Media Watch.

Pretty big news from Dex One today. The company announced this morning that it has a deal with rival SuperMedia that allows advertisers from each site to have their business profiles appear on the other publisher’s online directory. The obvious benefit to advertisers is an immediate boost in their business’ exposure online.

Each company would continue to sell its own inventory as before, and the deal does not extend SuperGuarantee status to Dex advertisers.

This deal would appear to be a direct challenge to the two companies’ chief rivals in the local YP space, yp.com and Yellowbook.

From the press release:

“Our partnership with Superpages enhances our position as the single source provider of local marketing solutions to small and medium sized businesses,” said Sean Greene, senior vice president of interactive, Dex One. “This agreement improves DexKnows’ consumer experience by providing additional content to help them find the local businesses that provide the products and services they seek.”

“Clients think of our Superpages Network as their one stop shop for providing quality leads,” said Sandra Crawford Williamson, chief marketing officer, SuperMedia. “They benefit from our award-winning SuperGuarantee program and the increased reach their advertisements receive through our agreements with companies like Dex One.”

While advertisers now have the opportunity to be cross-distributed on both sites, SuperMedia and Dex One will each continue to sell their respective advertising products directly.  Dex One advertisers will not be covered under the SuperGuarantee program.

The post Dex One, SuperMedia in Cross-Distribution Deal appeared first on BIA/Kelsey - Local Media Watch.

In a briefing to review the new site, SuperMedia’s Robyn Rose told us the new design is all about keeping the site fresh and keeping with the trend requiring more and more rich local content.

SuperMedia’s move is part of a wider industry trends. AT&T recently launched its own IYP redesign, with Yellowbook and Yell, among others, recently releasing new versions with more robust local content, maps, coupons, review, vertical integrations and so on.

The new version does more to display relevant local content on the search result page, as well as social media elements. Each results page has a horizontal bar that displays the local businesses logo, plus consumer reviews, coupons and videos as available. Users can filter results to show only those businesses that offer coupons or feature a video, for example. By rolling over the horizontal bar, social tools pop up allowing the user to email the business, save the listings, share it or like it on Facebook. All results are plotted on a map, which can be minimized for less location focused searches, like plumbers.

The new launch shows that SuperMedia remains fully committed to its SuperGuarantee program, where the company guarantees the work of businesses that display the SuperGuarantee shield. The shield is a prominent feature of the new site, and search results can be sorted to display only SuperGuarantee companies. Being a SuperGuarantee business is one component of the SuperPages.com search algorithm, and SuperGuarantee membership is also a criteria for filtering search results.

The post SuperPages.com Reveals Its IYP Overhaul appeared first on BIA/Kelsey - Local Media Watch.

The company also highlighted a number of product innovations to underscore its confidence that improvements will continue. Chief among these was the introduction of QR codes on SuperMedia’s print directories and direct mail product. The codes direct consumers to SuperPages.com, where they can download the SuperPages mobile app and register for the SuperGuarantee program. The direct mail QR codes lead to a coupon page on SuperPages.com.

“We continue to be encouraged by what we are seeing in the business as reflected in second quarter results, despite the fact that the overall economic climate remains uncertain,” said SuperMedia CEO Scott Klein, in a prepared statement accompanying the release of the second-quarter and first-half results.

Operating revenues for the first half declined by 21.1 percent to US$1,045 million. SuperMedia no longer breaks out print vs. online sales. BIA/Kelsey estimates that in 2009, SuperMedia generated roughly 11 percent of total revenues from online.

Other items of note from the earnings call:

* SuperMedia has named a new chairman of the board. Doug Wheat has replaced Tom Rogers, who was interim chairman.
* The company has introduced some new print products and formats, including changes in font sizes to improve readability and new display ad formats.
* Calls per metered line grew by 11.6 percent in Q2, and calls per quarter column equivalent grew by 14.9 percent. By contrast, both measures showed declines in Q4 2009.

It’s first-half earnings season. We’re interested to see if other publishers show any sign that the nose is coming up on the rate of revenue decline.

The post SuperMedia Sees 2Q Improvement, Launches QR Codes appeared first on BIA/Kelsey - Local Media Watch.

SuperMedia has joined forces with Yext to offer a co-branded version of the new Yext Rep product to its small-business advertisers. The Yext reputation management dashboard enables small businesses to track their online reputation through a single, easy-to-follow interface. Read our own Mike Boland’s coverage of Yext’s reputation management announcement here.

According to SuperMedia’s Robyn Rose, SuperMedia is already included in the Yext reputation management feed, meaning users of the dashboard can see how they appear on SuperMedia, including tracking reviews and comments on their business. The reseller agreement has not yet been implemented, and Rose said more details on how reputation management will be brought to market will be available when SuperMedia launches the product.

Rose did say that its decision to go with Yext had a lot to do with the dashboard’s intuitive interface, which uses very clear design to make it easy for an SMB to evaluate its online reputation at a glance, as well as its view that Yext has a strong understanding of the SMB marketplaces.

Yext CEO Howard Lerman will keynote BIA/Kelsey’s Directional Media Strategies conference, which takes place Sept. 14-16 in Dallas, Texas. The conference will also feature a panel on Sept. 14 devoted to reputation management.

BIA/Kelsey expects reputation management to become a key battleground in the SMB space over the next year, as rep management vendors like Yext, Marchex, VendAsta and a host of others battle to line up relationships with the major resellers, notably Yellow Pages publishers.

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