The Praized Blog

A few weeks ago, with the release of the latest revenue numbers from the Newspaper Association of America, we were treated with very Chicken Little-esque headlines including “Decline Of US Newspapers Accelerating“, “NAA Reveals Biggest Ad Revenue Plunge in More Than 50 Years “ and ”NAA to newspapers: advertise this“. 

Highlights of these articles included:

• “Total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006″
• “Signs that online growth rate is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006.”
• “But an even more important reason why paper ads are declining is that their cost-to-value ratio is way out of whack with what advertisers can get elsewhere, particularly the Internet.”

One reader in Techcrunch (a former journalist) had an especially enlightening comment:

Across the board, three dynamics are pretty consistently hammering nails into the dailies’ collective coffin faster than might be occur otherwise:

* Despite talk about fundamental disruption in the business, there’s still an attitude that this is a storm to be ridden out rather than a complete sea change. Even when the folks at the top (owners, publishers) get it, there are many, many layers of upper and middle managers who don’t — and who are afraid of losing head count because that somehow diminishes their authority.

* Sales has been given increasing control of the organization. Mind you, sales are crucial — but it’s hard to find a group of folks less strategic than salespeople on commission.

* Too many lifers. When you get into key operational areas (marketing, product development, news management) you find a lot of people who’ve been in the daily news business their whole careers, which isn’t necessarily bad, but nor is it a hotbed of innovation. What’s more shocking is the number of people you run across who’ve been at the same paper for 15, 20 or 25 years.

Chris Anderson, Wired’s Editor-in-Chief, had a different take on things, one that I definitely agree with:

The truth is that the newspaper business is still a huge industry and will be around in one form or another for the rest of my life. That is not to dismiss the declines, but only to note that there’s still a lot of money there and what is required is strategic change, not giving up the ghost.

Growth industries are different from sunset industries, but in many cases the second category is larger (one example: the Yellow Pages is still a $16 billion business).  Managing companies on the way up takes a different set of skills than milking them for cash on the way down (and often different people, witness the buyout guys), but fortunes are just as often made the second way.

What people forget is that industries peak at the top. Which is to say, at the very time that the first and second derivative people are writing off a business, those who can stand back and see the value still left in it can make a mint. Laugh at newspapers if you will, but I’ll bet some private equity firm out there is looking at the chart above and licking their chops.

With all this doom and gloom, I was pleasantly surprised when the Canadian Newspaper Association released their numbers last week.  Highlights from the Financial post and The Windsor Star:

• “Revenue at Canadian newspapers fell about one per cent last year”
• “The healthier financial picture in Canada reflects newspapers that are doing a better job maintaining their readership numbers”
• “a 30 per cent rise in online advertising revenue offsetting a two per cent drop on the print side.”
• “The ongoing challenge for newspaper companies (…) is to figure out how to use print content in digital form across various platforms such as home computers or mobile devices.”
• “The narrative about newspapers in the U.S. has been consistently negative in recent years, and that negativity has unduly influenced perceptions of the health of the newspaper industry in Canada”

What it means: as I don’t know the intricacies of both regions in the newspaper industry, it’s very difficult for me to comment on the why of those major differences.  But it’s something we also see in the directory industry, where Canada (or by proxy Yellow Pages Group) usually experiences better financial results than its US peers.  From a newspaper usage perspective, I do have one recent ”focus group of one” anecdote though.  Ever since I got my HTC Touch with a cheap unlimited data plan from Bell Mobility, I find myself reaching for the phone much more often than the printed newspaper when I have a few minutes during the day.  Radio-Canada (the French CBC) has become my default source for mobile news as they refresh their feed very often, have tons of original content and have a mobile-specific version.  If I (a self-proclaimed newspaper junkie) am reaching for the phone instead of the paper, it’s a sure sign that mobile will be next opportunity/challenge facing the newspaper industry and I think it will be the same in the directory business.

Was reading this morning a great analysis by Mathew Ingram about a New York Times article describing the way “young people” get/read their political news. It’s clearly more and more about word of mouth and your social graph.

As Mathew says: “It’s not that there is anything earth-shatteringly new in the piece, mind you. But I think it does a great job of describing how digital “word of mouth” — in other words, social networking of all kinds including Twitter, IM, Facebook and so on — has become a dominant means of news delivery for young people in a way that I’m not sure old geezers like myself quite grasp, no matter how often people describe it”

The Times sums it up: “In essence, they are replacing the professional filter — reading The Washington Post, clicking on CNN.com — with a social one. (…) In one sense, this social filter is simply a technological version of the oldest tool in politics: word of mouth.”

What it means: I remember when I joined Yellow Pages Group in 1999 (called Bell ActiMedia at the time), old-timers used to tell me that the biggest “competitor” to directory publishers wasn’t other directory publishers (or Google or other online directories), it was word of mouth. People have always asked their friends for recommendations and it has always represented a large volume of local search “queries”.

Admittedly, news and local search are not totally the same. Local search information is usually more of a pull (i.e. someone looking for a product/service) than a push (i.e. someone broadcasting information about a new merchant they found). It’s also more “evergreen” than news, i.e. unless you’re a total local merchant junkie, you don’t need to learn in a timely fashion about a new restaurant opening in your neighborhood. But there’s the seed out there of future consumer behavior which could create a great disruption effect on local search. Who knows? It might become valuable to broadcast information about your favorite local merchants. As I estimated in this blog post, there’s potentially 7 more times online local conversations than online directories searches currently. Anyone who successfully harness these conversations will create very valuable local search inventory.

My network of contacts has been pinging me recently about all sorts of job opportunities. I’m obviously not available currently (Praized Media stealth start-up anyone?) but I figure I would give some exposure to a couple of those opportunities.

In Montreal:

• Yellow Pages Group, Senior Manager - Lead Generation

Description: the Senior Manager – Lead Generation is the national prime on Lead Generation programs/initiatives from a marketing standpoint. Responsible for the design, implementation and execution of the end-to-end, cross-functional lead generation framework, from lead sourcing to lead processing. Responsible for developing and delivering the annual lead generation plan and budget with measurable targets of new, qualified sales leads. Lead cross-functional teams to support program/product launches with Lead Generation initiatives. (Yellow Pages Group has 50 other jobs listed on their web site currently.)

• Canoe, Senior Product Manager, Espace Canoe

Description: in French here

• CakeMail, Marketing Manager

Description: amongst other things, work with Sales, and Product Development groups to drive projects, define and implement a customer communications and lead generation strategy and contribute to the product improvement process.

I was also pinged by headhunters for a business development job at Askmen.com and a Vice-President position at Edelman, both in Montreal also. I don’t have a description for them.

In Seattle:

• Marchex, Director of Business Development

Description: The Director of Business Development will be responsible for driving the reseller business development strategy and execution across the portfolio of Marchex businesses reporting directly to the VP of Business Development.

In San Francisco:

Solstice Beverages, Inc., CEO / GM

Description: We are seeking a CEO / GM that can lead our efforts. If you are, or know of, an experienced, entrepreneurial and passionate consumer brand builder and general manager who yearns to have the autonomy to build and manage exciting brands & products.

Heard of any other interesting job opportunities? Send me a line!

Yesterday morning, I had the opportunity to moderate a social media panel at the Infopresse conference on social networking. Sitting on my panel was Guillaume Bouchard from NVI, a Montreal-based SEO/SMO firm. He explained to the crowd of more than 280 people how, by using social media tools, he manages to generate brand awareness and increase the online street cred of Canpages, a Canadian directory company competing against Yellow Pages Group in Canada.

It starts with the creation of original and quirky content in the Canpages blog. His team then seeds that content in the various social news sites like Digg and Reddit. Working with a large network of friends and contacts, he’s able to catch the eye of online influencers who might (or might not) promote that piece of original content.

His best success so far with Canpages has been this blog post about “Weird Canadian Restaurants”. It was submitted to Digg and generated 676 diggs and 101 comments. It was promoted to the first page of the site and generated good traffic (he did not disclose how much) for the Canpages blog. It was also favorited by people in StumbleUpon, another social tool that has the reputation of driving a lot of traffic. The post was well enough crafted to be picked up by Dan Mitchell from the New York Times, which generated some more traffic to the Canpages blog.

What it means: a great use (and a great understanding) of social media tools and sites to build a new directory brand and make it more exciting for “cool kids”. This is also a great strategy to build new incoming links to your domain, thereby increasing your page rank in Google. You’ve got to wonder though if there are long-lasting positive effects from both a brand equity and online directory site usage but I don’t think it hurts given the runner-up position they occupy in the market.

According to this eMarketer article, “Nearly two-thirds of small businesses surveyed by Western Wats in an AT&T-commissioned study said they advertised in a printed yellow pages directory.“

I might be wrong as I’m not as familiar with the US market, but that number seems high based on my Canadian directory business experience. Up here, Yellow Pages Group has 395,000 customers (2006 annual report) which gives them, depending on who you talk to, between 20% and 40% penetration of the Canadian SME market. The US market is much more competitive though (some cities have 5+ competitive printed directories) and that might be why more SMEs are claiming they advertise in printed business directories.

(from their press release, .pdf format)

With the launch of AgendiZeMe at DEMOfall 07, small- to medium sized businesses (SMBs) and entrepreneurs will now have easy, self-service access to the patented AgendiZe Call-to-Action Platform for click-to-call and click-to-save & share services that let customers effortlessly and instantly move information from Web sites, blogs, ads and emails onto more than 50 different applications and personal devices.

What it means: one of the 2007 trends I had predicted last December is atomization. After signing large-scale wholesale deals with directory publishers worldwide to power an important social element of their local search sites (the Save & Share function), Agendize atomizes its tool and tries to tap into the long tail for new business opportunities. Any web site can now embed the save & share tool. Understanding that self-service is not a realistic option for quick adoption, the company hopes to strikes distribution deals with directory publishers to bundle this new offer within their other advertising packages. I think this product add-on makes sense if directory publishers can find a way to integrate it seamlessly in their current offers. It would allow publishers to claim additional trackable advertising ROI. The Kelsey Group blog has a great write-up on this news. You can also see Agendize’s presentation at Demofall 07 here. Disclaimer: I piloted the partnership agreement between Yellow Pages Group and Agendize a few years ago.

A selection of some of the praized-worthy news in the last few days:

1) ContactAtOnce!, a provider of presence-aware solutions (click-to-call, IM, etc.) just announced that BargainNews.com, one of their customers, improved the conversion rate of its auto classified website by 77% after adding the ContactAtOnce! service (see screenshot below) to their enhanced advertising packages.

2) Bret Taylor and Jim Norris (both seen below), two of the masterminds behind Google Maps and several other Google products, have joined Benchmark Capital as “Entrepreneurs in Residence.” This gives them paid positions to hang out at Benchmark’s offices on Silicon Valley’s Sand Hill Road and think through starting a business. They have a specific idea in mind, but are secretive about it, telling VentureBeat only that it’s a “consumer Internet” company. I’ve had the chance to work closely with Bret when Google launched their Local site in Canada and it was great fun. I wish them both good luck! (via VentureBeat)

3) R.H. Donnelley officially launched DexKnows.com, their new local search web site powered by Local Matters (previously known as Dexonline.com). It now includes comparison shopping, a better mapping experience and some personalization tools.

4) Yellow Pages Group in Canada released their latest heading modifications. It’s always interesting as it gives us a perspective into changes in culture and society. Amongst others, Pilates, Organic Products, Geothermal Energy, Tapas, Brunch, Vegetarian & Vegan Foods are in. Telephone Booths, Shoulder Pads, Chewing Gum and Buttonhole Makers are out.

1) My friends at the Kelsey Group just released their 2007 Global Yellow Pages report. It’s always excellent information and worth the purchase.

Highlights:

• In 2006, worldwide, Yellow Pages generated estimated revenues of US$30.5 billion and estimated earnings before interest, taxes, depreciation and amortization (EBITDA) of US$13.6 billion,
• By applying a conservative multiple of 10 times EBITDA, the entire global Yellow Pages industry would have a market valuation of US$136 billion.
• The global Yellow Pages industry employed just over 74,000 people in 2006, more than 41,000 of whom worked in sales or sales management, up from 36,000 in 2004.
• Print Yellow Pages will stay level globally over the next five years.
• By 2011, almost 30 percent of global Yellow Pages revenues will be online, compared with 12.4 percent in 2006.
• Yellow Pages share of the total global advertising pie stands at 7.1 percent.

2) My friends at illumiCell just signed a distribution deal with Idearc that allows the Texas publisher to place its Superpages.com advertisers’ content on an instant messenging local search service provided by illumiCell. Under this agreement, Superpages.com’s performance-based advertisers will be featured over AOL’s Instant Messenger (AIM) network. The illumiCell local search service will launch on AIM in the United States in the third quarter of 2007. illumiCell already has a partnership with Yellow Pages Group in Canada.

VentureBeat has the news:

Citysearch, the division of IAC focuses on local reviews of restaurants and other services, has acquired the struggling local review start-up, Insider Pages.

The purchase (amount undisclosed) comes at a time of increasing competition in the race to deliver a compelling local search services. Citysearch’s parent, IAC, has already bolstered its local search offerings, namely with Ask City, a property that packages everything from local search to local maps, reviews, and ticket services.

However, more entrants have arrived to nip traffic away from Citysearch, an early player that has seen its traffic stagnate in recent months. There’s Yelp, Judysbook and Backfence, for starters. Earlier today, we mentioned new competitor Outside.in, another company going after the local community news and events area. (…)

Insider Pages has about 600,000 user reviews, and they’ll be integrated into the Citysearch’s offering, she said. It has 2.5 million monthly unique readers, she said, based on Comscore and internal tracking numbers.

She would not say whether the purchase price was more than $10 million invested in the company by Sequoia Capital, Softbank and Idealab. She said there were multiple bidders, but that Insider Pages preferred Citysearch because it is complementary. Insider Pages is popular among suburban parents and homeowners, she said, giving it strength in the home, garden, health and plumber review areas. Citysearch is stronger in bars, arts and entertainment. Citysearch will absorb Insider Page employees in its San Francisco office.

Rev2 says it was sold for “for an estimated sum of $13 million.”

What it means: I’m surprised it was not acquired by a directory company as it would have been a great jumpstart for any user review strategy (becoming more and more important in any local search site). From the article above, it sounds like the acquisition will be complimentary based on different content & users. I know the Citysearch demographics well (Yellow Pages Group used to be the Citysearch licensee in Canada) but I don’t know enough about InsiderPages’ users to really comment on the complementarity.

Yellow Pages Group (in Canada) has just released a new content feature in their main local search site YellowPages.ca. Buyers can now access Autotrader.ca dealer inventory content via merchant listings and merchant pages.

When searching for car dealers, users are able to view the inventories of thousands of auto dealers throughout Canada by clicking on the “Auto Inventory” in-listing link. See the following example:

• In-listings: Metro Motors in Port Coquitlam, BC
• Merchant page: Metro Motors

Yellow Pages Group acquired Trader Canada in June 2006.

What it means: it’s a powerful combo for both users and advertisers and it marries perfectly business directories content (long shelf-life) and classifieds content (short shelf-life). (Disclosure: I work part-time for YPG)