Should You Advertise in the Yellow Pages?

Written by on December 16th, 2008

Hedge your bets and do online and Yellow Page advertising

It happens every fall!

Just as the birds fly south for the year, the salmon swim up river to spawn, there is a certain time of year when a new edition of the Yellow Pages are produced and handed out.

They are dropped in apartments, homes and delivered to mailboxes.  A few months ago, my wife came back from our rural post office and told me that Brian, (local postal employee) had to put out an extra bin to handle the Yellow Page books being thrown away by the PO Box holders.  The Yellow Pages for decades was a powerful, and in some cases the only affordable tool for small business owners to advertise their business. Getting in the Yellow Pages was the first thing a business owner did!

But the world is different today.   Consumers behavior is being changed by the Internet.  Because of broadband, their computers are always on and they are learning to search for what they want, when they want and read reviews their neighbors have made about the companies and products they are interested in.  

The investment industry has taken notice of these changes and as a result the shares of two of the industry leaders, R.H. Donnelley and Idearc, have fallen 99 percent in the last year.   Ouch!

And there are predictions that their revenue is going to drop.  According to an article by Emily Steel for the Wall Street Journal:

Print and online ad spending on yellow pages will plummet 6.3% next year, more than double the rate of decline expected for broadcast TV, according to forecasts by Wachovia analyst John Janedis.

So if the Investment community smells a fire, why are small business owners still paying for ads in a book that not only gets thrown away, has more competition than ever and is being replaced by consumers whose behavior is being changed by the convenience of online search engines, like Google and Yahoo.

The Yellow Page industry is reporting more value for your advertising dollar!

According to the industry, Yellow Page advertising still works.  Contrary to what most people think people still use the Yellow Pages and their online version.

As a way to bridge the decline, the Yellow Page industry is integrating their book and Internet strategies.  As a result the combination of print and online references rose to 17.21 billion in 2007, up 1 billion in one year.   According to a comScore 2007 study the Internet Yellow Pages industry is experiencing a double digit growth, while the print directory usage is remaining stable.   So a sales person calling on a small business can still argue, “We have you covered both ways”!

Should you advertise your business in the Yellow Page still?

Probably.  But, we think it’s time to hedge your bets.  A 2×2 ad in a major metropolitan area like Dallas could run you $5,000 a year.  If you are a pizza shop, you’ll need about 700 pizza orders to cover the cost of your online ad.  If your firm provides hot water tanks, you might need 20-30 orders to pay for your ad.  For most business owners, the thought of no longer advertising in the Yellow Pages is scary, particularly in difficult economic times.   “Where oh where will I get business!  How will they get the phones to ring?, if I don’t advertise in the Yellow Pages?”

Prior to General Motors CEO appeal to Washington to bail them out, GM made the strategic decision to put 50% of their 3 billion dollar  (YES BILLION) advertising budget toward Internet advertising initiatives.   In my book Internet Dough we show how a pizza shop owner, (Tony) diverts 30 percent of his traditional marketing budget to social media marketing.  In the book we show why:

  • Internet advertising is significantly less expensive
  • Internet advertising can be repeatable, it can be predictable and its definitely measurable
  • The Internet is where you can find customers 24/7/365 

In the book, we share how Tony developed his own social media marketing strategy.  Among the strategies Tony adopted were:

  • Email acquisition strategy so he could email his customers with specials on slow nights
  • Data gathering techniques to get birthdays and customer preferences to send coupons
  • Video to share content that talks about the quality of their pizza and build the brand
  • Webcams to get teens to his place on Friday night to mug their friends and text them to come to Tony’s and hang out
  • Customer testimonials to increase word of mouth

Other strategies – even a pizza shop can adopt, would be:

  • Searh Engine Optimization and Marketing
  • Radio advertising through Google Ads
  • Online advertising in Facebook and other social networks

We are living in a time, between times. 

In times when the old still works, but works to a lesser degree.  A time when a new magic potion is being uncovered and a time when customers behaviors have changed.

Like the radio, TV stations and newspapers, Yellow Page directories provide FAT margins. They are hugely profitable enterprises and you can expect them to be around for some time yet.  However in a time and era of changing behaviors, their profit margins will continue to shrink and their business model will have to change.  So will small business owners advertising techniques.

But for now, a business owner needs to have one foot in the Yellow Pages and the other foot into social media.

( QUICK FACT  – According to Collin Dunn ( the 500 million directories printed require 19 million trees to be harvested and 3.2 billion kilowatts of energy to be used!)

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