Firstly, the term ‘Yellow Pages’ is a globally recognized, meaning for a telephone directory of companies. In some countries the term is trademarked and the business is operated by the IP holder, however, in other countries like the USA, the name is not registered so many people can legally use the name with their business directory service.
Specifically, in the UK the brand is owned and operated by Yell Group and is listed on the London Stock Exchange. The company was originally owned by the GPO and later BT and set up the first directory in Brighton in 1966. During the subsequent 40 years the business grew from just the one directory area in the UK to over 100 at the peak of its performance. In the 2000’s the company invested heavily in foreign markets headed up by CEO John Condron at the time – this was a controversial decision given the inevitable decline of printed media due to the actual and forecast growth of the Internet and supporting technology.
In 2003 Yell decided to float on the LSE with an initial IPO of 276p – over the next 3 years the company enjoyed steady share price growth achieving 634p in Feb 2007. However, the party wasn’t to last as soon after the share price fell rapidly over the next 2 years to just 13p in March 2009, and has stayed low up until today at just 4p.
So why has the ‘Yellow Pages’ brand and confidence in its abilities fallen so much in recent years after such a long history of growth and expansion? Well the answer is quite clear today and really can’t be blamed on the benefits of hindsight. Just 13 years ago you didn’t have to be an Internet guru or strategist to realize that print media will inevitably decline at some point. If you think back, offices were already implementing paperless solutions, early adopters of the Internet were already looking for businesses online and expecting richer content, technology was developing at a rapid pace enabling the publication of data faster and more accurate than ever before, homes across the UK were buying more computers per year than television sets. However Yell kept doing what it’s always done and concentrated its core efforts on printed media (as it worked so well for them in the past) – they did dabble in Internet technology but really just published the Yellow Pages business directory on the net. In the UK Yell brought out a product called ‘YP Ad Online’ – as the name suggests, it was simply publishing printed media content online – not the most forward thinking publishing strategy you may think.
Simply put, Yell didn’t grow up with and embrace the Internet – in the early years it saw it as an auxiliary product to the printed directory media, and still invested most of its RAD, processes and money in the printed and 118 offerings. This resulted in Yell being on the back-foot, and 10 years too late to exploit its brand and the potential it once had to be a market leader of providing advertising services on the Internet, thus enabling it to migrate its offline / printed media customers to online solutions and products.
So what’s the future for Yellow Pages globally and specifically Yell Group in the UK / USA and Spain with nearly 3b worth of debt? Well it’s not too late for management to finally wake up and start developing relevant products people will actually want to buy without being sold to. Yell really need to stop blaming the ‘economic environment’ and navel-gazing by commissioning internal ‘in depth reviews’ as per its latest 2011 Q3 results – you don’t read about Google’s revenues in AdWords dropping or being impacted by GDP. They constantly out develop and out-perform the market though innovation and exploitation of new technologies, and produce advertising solutions that people want, understand and most importantly work.
Yellow Pages in the UK is still a respected and trusted brand, however, with each day that goes by this is eroding faster than a dictator’s grasp on a war torn country – so someone better act quickly. The brand is an institution that we have all grown up with, however, brands (no matter how super) are all fragile and bad management, strategies and products will almost certainly kill a company in today’s fickle, fast-paced, fast-growth technological world – you only have to look around at brands such as Woolworths to realize that.
So do people still use the good old Yellow Pages printed product? Well according to Yell and their published online Facts and Stats they do – in fact they claim over 80% of UK adults use the printed business directory. However, when you look at the small print this figure was actually generated in 2006 – that’s 5 years out-of-date and of course we’re living in a different world now. A more recent statistic published by Yell indicates the book is used over 600m times in 2009/2010. Whatever the current figure is I personally don’t know of a single person that uses the book anymore – except by boys wanting to stand on them at Christmas to reach up to kiss a girl under the mistletoe (perhaps their 1990’s TV campaign of that very situation was a subconscious prediction of their fate). Perhaps a cynical person may assume that the book only survives today due to the capabilities of an efficient and formidable 3,000 strong sales force.