Yellow Pages 2015 a MEDIACENTER Special Report

YellowA MEDIACENTER Special Pages Report 2015

represented the height of directory use Media analysts, including many Headed for the Time Capsule and younger generation’s almost total affiliated with the Yellow Pages or reliance on the Web for information, other printed directories, agree that For decades, few household and and via mobile devices, specifically. older Americans and those living in business resources were as necessary, Even many Baby Boomers, who rural communities with limited Internet dependable and ubiquitous as the turned first to the printed version of the and/or cellphone service are the only Yellow Pages directory. No home or Yellow Pages throughout much of their remaining viable consumer audiences business was complete without one lives, have fully adapted to computers, for the printed Yellow Pages. or more copies. Many businesses mobile devices and online searches ordered stacks of them, so every for local business information. That being said, the Yellow Pages executive, manager, salesperson and brand is still alive and competing in many employees could have their own No one can predict with any accuracy the digital world of information, in the copy and conveniently store it in a when the last Yellow Pages directory form of YP.com. This special report bottom drawer or a nearby shelf. will be printed, but a tipping point will be from THE MEDIACENTER examines reached when it is simply uneconomical both the last days of the printed Two trends have had the most to to produce and print the small number Yellow Pages and the future days of do with the steady decline of the of books for a limited market. the online version and their impact on print Yellow Pages: the aging and local businesses. passing of the older generations that

www.mediacenteronline.com Yellow Pages 2015 A MEDIACENTER Special Report

Not Dead Yet Home and Trade Services SMBs’ Top 5 Ad Media Used, Q3 Although this data shows that print A 2013 report, “ADP Ad Effectiveness 2014 media is still an important advertising Study,” from the Association of channel for Home and Trade Services Directory Publishers (ADP) found that Media Percent SMBs, Facebook was second in ads printed in independent Yellow Newspapers 50.4% use and Website was just behind Pages directories generated 28 Facebook page 43.1% direct mail. Despite this snapshot percent more calls to businesses from of Q3 2014, BIA/Kelsey expects Print Yellow Pages 36.2% 2010 to 2013. The average number the percentages for the print media of calls was 197, which the study Direct Mail 32.5% channels to decrease as the Web and calculated to $15.50 per call. It also Website 30.2% social media channels increase. stated that an average advertiser’s BIA/Kelsey, Local Commerce Monitor™, investment of $3,280 for an ad or ads in Q3 2014 Additional data from BIA/Kelsey independent Yellow Pages directories reinforced this trend, as the average resulted in $81,700 in revenues, or an annual advertising expenditure for ROI of $24 to $1. Home and Trade Services SMBs decreased from $19,238 according to It’s important to note that although Q3 2013 data to $12,573, based on ADP has a vested interest in the the Q3 2014 research. Businesses health of independent printed Yellow in this sector also said they would Pages directories, the Advertising not be increasing their ad budgets for Research Foundation did review 2015. Even more telling is that 27.7 and endorse its methodology for percent of these SMBs were planning calculating the ROI above. to increase their digital ad spending for 2015, compared to 24.7 percent An expert in the printed directory during 2014. sector concluded that this ROI was A Contrast: Two Business achieved because “80 percent of Sectors’ Use of the Yellow Pages By contrast, readers of Boating the top print directory headings Industry Magazine, according to a are service-related and high-value Through its in-depth study and January 2015 survey, ranked the purchases.” He then said that retail analysis of small and medium Yellow Pages last on a list of the 11 and entertainment-related purchases business (SMBs) during Q3 2014, most-successful marketing tactics are more likely to be made online and BIA/Kelsey found that the General for 2014. Only 1 percent of surveyed via a mobile device. This analysis Services sector, and the Home and readers considered it successful, begs the question: If businesses in Trade Services, specifically, still compared to the top 5: company two enormous commercial sectors heavily relied on traditional media. Website, 27 percent; boat shows, 21 – retail and entertainment – have These services include trades, percent; Web advertising, 12 percent; “abandoned” independent printed lawn care/landscaping, property email marketing 12 percent; and Yellow Pages, then how much longer management/HOA, construction Facebook, 8 percent. will these directories deliver this 2013 and contractors, which are the most ROI for service-related businesses? businesses in this sector.

www.mediacenteronline.com Yellow Pages 2015 A MEDIACENTER Special Report

According to eMarketer data, total At the bottom of the list of US The Yellow Pages’ Fading media ad spending in the US will total media ad spending are print reach $189.38 billion, with advertising directories, with just a 3.1-percent Financial Future spending in the mobile channel share for 2015, or $5.87 billion. Print increasing 43 percent, from 9.8 directories’ share has been declining BIA/Kelsey forecast that local ad percent of the 2014 total, or $17.65 since 2012, and is forecast to continue revenues from the printed Yellow billion, to 14.0 percent of the 2015 to decline through 2018. Pages will continue to decline at a total, or $26.51 billion. During 2014, CAGR (compounded annual growth mobile ad spending jumped ahead rate) of -4.1 percent from 2012 of newspapers, magazines and radio through 2017, which is not as steep as for the first time and behind just TV the 10.1-percent decrease from 2008 and overall digital. For 2015, the gap through 2013. BIA/Kelsey attributes between mobile and newspapers, this slowing of the segment’s decline magazines and radio will increase to the transition to a digital/Internet even more. model, which will generate moderate revenue growth through 2017.

Local Ad Spending, 2012–2017 Media 2012 2013 2014 2015 2016 2017 Segment Printed Yellow $5.5 B $4.4 B $3.7 B $3.1 B $2.6 B $2.2 B Pages Internet Yellow $2.2 B $2.4 B $2.6 B $2.9 B $3.1 B $3.3 B Pages All other $124.8 B $125.9 B $130.2 B $133.5 B $139.5 B $143.2 B media BIA/Kelsey, 2013 The Canadian Conversion Financial results for 2014 from Canada’s Yellow Pages Limited also reveals a decrease in print directories’ US Total Media Ad Spending Share by Media, 2012–2018 revenues and an increase in its digital platform revenues. Print revenues decreased 23.1 percent to $434.7 Media 2012 2013 2014 2015 2016 2017 2018 million. The company said it has TV 39.1% 38.8% 38.1% 37.3% 36.9% 36.2% 35.7% stabilized print revenues by offering Digital 22.3% 25.2% 28.2% 30.9% 32.2% 35.3% 37.3% customers in rural and urban markets Mobile 2.6% 5.7% 9.8% 14.0% 18.7% 22.6% 26.4% larger size ads at little or no increased rate and fewer ad-size options. Print 20.7% 19.0% 17.7% 16.5% 15.5% 14.7% 14.0% Newspapers 11.5% 10.2% 9.3% 8.6% 8.0% 7.5% 7.1% Yellow Pages Limited’s digital Magazines 9.2% 8.8% 8.4% 7.9% 7.5% 7.2% 6.9% revenues increased 9 percent, to $442.8 million, primarily because Radio 9.3% 8.9% 8.6% 8.2% 7.8% 7.5% 7.1% more customers are migrating from Outdoor 4.0% 4.1% 4.0% 3.9% 3.8% 3.7% 3.6% print directories to the digital platform Directories 4.5% 4.0% 3.5% 3.1% 2.8% 2.5% 2.3% and the majority of new customers are eMarketer, July 2014 only requesting digital ads.

www.mediacenteronline.com Yellow Pages 2015 A MEDIACENTER Special Report

YP: From the Printed Page to Net US Mobile Ad Revenue Share, by Company, 2013–2016 Company 2013 2014 2015 2016 the Mobile Screen Google 37.7% 37.2% 35.2% 33.2% Facebook 14.4% 17.6% 16.7% 14.6% When AT&T saw the handwriting on the wall about the future of its printed Twitter 3.0% 3.6% 3.7% 3.8% Yellow Pages during 2012, it sold Yahoo --- 3.2% 3.7% 4.2% 53 percent of its AT&T Advertising Pandora 3.5% 3.0% 2.6% 2.2% Solutions and AT&T Interactive YP 3.5% 2.7% 2.2% 1.9% to an affiliate of Cerberus Capital Management, resulting in the founding Apple (iAd) 2.4% 2.6% 2.8% 2.9% of YP Holdings LLC. Yelp 0.5% 0.7% 0.9% 1.0% Amazon 0.1% 0.5% 0.6% 0.7% Today, it operates YP.com and the YP app for mobile users, making it Millennia Media 0.7% 0.4% 0.3% 0.3% the largest local ad platform in the LinkedIn 0.1% 0.3% 0.4% 0.4% US. During 2013, its total digital ad Other 34.1% 28.4% 31.0% 34.9% revenues were just short of $1 billion Total (billions) $10.7 B $19.0 B $28.5 B $40.2 B and its mobile search revenue was almost $400 million, which placed it a eMarketer, December 2014 distant third behind Google and Twitter in net mobile ad revenue share. YP.com Mobile Scores with Older May 2014 comScore research also revealed that YP.com users had much YP’s peak year may have been 2013, Millennials higher percentages of ad exposure as it doesn’t even appear on a list of characteristics than all mobile phone the top 8 companies by net US digital Only time will tell if YP will actually users: Exposure to ads, 60 percent ad revenue share 2012 through 2016. experience a decline in its share of and 24 percent; ever clicked on mobile The forecast for net US mobile ad net mobile ad revenues; however, ad, 28 percent and 7 percent; scanned revenue share by company shows its according to May 2014 comScore data, a coupon or offer via QR/barcode, 20 #3 position during 2013 will decline to it is where small businesses should be percent and 4 percent; and purchased #7 by 2016. if they want to reach Millennials, 18– a product via mobile phone, 52 percent 34, and younger Gen Xers, and with and 18 percent, respectively. incomes of $75,000 or more. Index of YP.com Mobile Users Average Monthly On-Phone By Age, May 2014 Spending, May 2014 All Age Group Index* Spending YP.com Mobile 13–17 72 Range User Phone 18–24 107 Users 25–34 166 $21–$50 5% 2% 35–44 134 $51–$100 7% 3% 45–54 87 $101–$200 7% 3% 55–64 61 $200–$500 16% 5% 65+ 42 More than $500 15% 3% comScore, May 2014 * with 100 neutral comScore, May 2014

www.mediacenteronline.com Yellow Pages 2015 A MEDIACENTER Special Report

Searching for an Audience Net US Mobile Ad Revenue Share, by Company, 2013–2016 Seek Discover Consider Ultimately, the test for search engines, Newspaper/Magazine Internet YellowPages Ratings/Review Sites Store Circular/Email Promotion/Coupon Print YellowPages

YP.com and similar apps is how Company Website Search Engines consumers use them to search for Social Network local business information. Daily Deals Category A 2014 report from comScore, the 2014 Local Business Search Study, found that 66 percent of consumers searched Internet Yellow Page sites for local information about independent businesses, compared to 56 percent Restaurants 17% 16% 66% 23% 16% 14% 21% 11% 30% for portal sites and 62 percent for local sites. When searching for information Supermarkets 9% 8% 37% 54% 6% 30% 3% 7% 26% about a branded business/franchise, Physicians 38% 21% 45% 3% 0% 4% 7% 4% 9% however, portal sites received the Beauty salons 29% 21% 51% 20% 14% 15% 18% 16% 15% highest percentage of consumer Pizza 23% 17% 50% 34% 7% 10% 12% 7% 19% searches, at 44 percent, followed by local sites, 38 percent, and Internet Auto repair 41% 21% 47% 20% 9% 14% 11% 6% 21% Yellow Pages sites, at 34 percent. Pharmacies 21% 12% 42% 28% 3% 13% 2% 7% 28% Clothing 10% 12% 65% 37% 14% 29% 10% 14% 50% Burke’s Local Media Tracking Study Auto parts 44% 19% 49% 13% 6% 13% 10% 4% 19% for 2012 and 2013 provides detailed insights as to the combination of local Food products 17% 16% 57% 39% 17% 29% 17% 21% 28% media that consumers access for Auto dealers 22% 18% 68% 13% 6% 32% 9% 9% 51% different business categories during Banks 17% 15% 61% 3% 1% 3% 4% 4% 36% the “Seek,” “Discover” and “Consider” steps of the buying process. Plumbers 46% 24% 40% 11% 3% 15% 13% 5% 30% Dentists 42% 26% 51% 5% 1% 4% 13% 4% 31% The trends are clear: the printed Yellow Hardware 29% 14% 48% 23% 5% 17% 4% 4% 21% Pages directories are on borrowed Theaters 12% 14% 78% 5% 8% 23% 9% 11% 28% time, since printing, publishing and distributing the books to a limited and Florists 35% 21% 59% 15% 13% 11% 28% 21% 9% decreasing number of older-adult Insurance 32% 16% 63% 8% 0% 8% 4% 7% 34% and rural households will eventually Landscaping 36% 22% 40% 22% 13% 26% 13% 10% 6% cross a threshold that will make it Attorneys 52% 21% 53% 3% 0% 7% 9% 11% 0% uneconomical. Local businesses in specific categories will find it beneficial Appliance Repair 52% 22% 42% 6% 0% 15% 6% 7% 27% to be listed and to place ads on YP’s Local Search Insider (Burke), August 2014 digital and mobile platforms. Google, Sources: BIA/Kelsey Website, 4/15; Yahoo and other search engines as Rochester Institute of Technology well as social media sites, such as Website, 4/15; Boating Industry Magazine Facebook and Twitter; and apps, such Website, 4/15; eMarketer Website, as Yelp, have a significant advantage 4/15; MarketWatch Website, 4/15; AT&T over YP in shares of users and Website, 4/15; YP Website, 4/15; Thrive revenue. Local businesses must pay Analytics Website, 4/15; Convergent close attention to this competition to Mobile Website, 4/15; Local Search be sure they are not spending future Insider Website, 4/15. ad dollars ineffectively. Updated: April 2015