Small Business Marketing Sucks

I always find it interesting (and refreshing) when a search marketing company has something positive to say about the Yellow Pages. As someone who ran a web development business for over 5 years, I can certainly understand their bias. But it seems that the folks over at Search Engine People have decided to go with the facts rather than anecdotal evidence regarding the effectiveness of Yellow Page advertising.

Blogging on this topic, Tom Tsinas looked at one of his client’s year-to-date website analytics. Comparing the number of visits that came from Google to those that came from Internet Yellow Page (IYP) sites like Superpages, he found that, overwhelmingly, Google won for sheer volume of traffic: 5,504 to 1,261.

But digging deeper, he found something interesting about the quality of traffic that came from the Internet Yellow Page sites.

He found that the bounce rate (i.e., number of initial visitors who “bounce” away to a different site, rather than continue on to other pages within the site) was much higher with the Google visitors: 55.04 percent compared to 27.07 percent. He also found that the IYP visitors spent more time on the site, visited more pages, and that almost all of them were new visitors to the site. His conclusion?

Clearly Yellow Page visitors are more engaged than Google’s. They also 100% less likely to bounce, view 20% more pages, spend 12% more time on the site and, with almost 90% of the traffic being from people who’d never been to the site, reach a different audience!

Regarding the quality vs. quantity of traffic, Dick Larkin of WebListic, Inc., an Internet marketing firm, puts it like this:

...there are more searches on Google in a few days than there are in all the IYPs combined for a year. However, the QUALITY of users on IYPs is much higher than of general web search. I define quality as how close the searcher is to making a buying decision.

See, it’s easy to fire off a few hundred searches on Google before taking any action. However, on a typical Internet Yellow Pages, you have to enter multiple pieces of information (keywords, location, state, etc.) which is more time consuming, and also filters out searchers who aren’t really interested in finding a local business.

Someone searches an IYP when they’re serious about local information.

This makes sense. A large percentage of people using search engines like Google are likely to be in research mode rather than buying mode. But people who use Internet Yellow Pages have already decided to buy and are merely looking for a local merchant from whom to buy. In a joint study, TMP Directional Marketing and comScore found that IYP sites such as Superpages.com and Yellowpages.com account for 60 percent of local IYP business searches, while sites such as Google Maps, MapQuest, Yahoo! Local account for 40 percent of local IYP business searches.

This demonstrates that, when searching for local information, people tend to use IYP Yellow Pages more than search engines, making it a viable tool to reach consumers who have already made a buying decision. In a business climate where targeting the right consumer is mission critical, I ask: How much more targeted can you get than “ready to buy”?

Anyone who’s read a business book or gone to college should know ROI is a number derived from a simple mathematical formula.

Ian Sohn over at Flagged For Follow Up made that statement on a blog post about ROI. He’s absolutely right. Here’s a simple mathematical formula:

1. How much revenue do you want your advertising to generate each month?
    Pick a realistic number. In my hypothetical example, I’ll use...

      $5,000

2. What is your average sale?
    If you have multiple products, think about what your average customer spends.

      $1,000

3. [Now divide $1,000 into $5,000.] The number of sales you need is:

      5 sales

4. How many prospects must you speak with to make 1 sale?

      6 prospects

5. [Now multiply 5 sales x 6 prospects.] The number of calls you need is:

      35 calls

So to sum it up, 35 calls a month would result in 5 sales and bring in $5,000 a month.

This is an example of what a transmission shop could expect from Yellow Page advertising.

Remember in my previous post that I said you could get significant advertising in many independent directories for less than $3,000 a year? Spending $3,000 a year to get $5,000 a month x 12 (i.e., $60,000) is a 20:1 return on your investment.

And they say Yellow Page advertising doesn’t work...

I’ve been told by older reps how sweet it was to sell Yellow Page advertising “back in the day” (that being when phone companies had a monopoly on Yellow Pages). They tell me the typical sales pitch went something like this:

I’m here to sell you Yellow Page advertising. Oh, you’re not interested? Well, you will be. Here’s my card; call me when you change your mind. Oh... and the book’s closing in 2 weeks.

That’s how first half of their day was spent. The second half usually involved golf...

Those days are gone forever, mainly because the deregulation of the Telecom industry allowed for smaller, independent Yellow Page companies to publish directories of their own. Competition has forced rates to come down. As a result, companies like AT&T and Verizon can no longer charge the exorbitant prices they once did. And the independent publishers’ rates are even more affordable. (You could spend less than $3,000 and get display advertising in multiple headings for an entire year.)

Of course, any advertising is “too expensive” if it doesn’t work. And by “doesn’t work” I mean that you paid more money for your advertising than you got back in return.

So any discussion of advertising must include Return on Investment. And that’s the topic of my next post.

As the image above illustrates, consumer behavior towards any particular medium is what makes it a valuable advertising channel. For newspaper and magazines, it’s the number of people who have subscribed to the publication. For outdoor advertising, it’s the number of cars driving past a particular location each day. For television and radio, it’s their ratings. For a website, it’s the number of visits, or unique visits, each month.

Yellow Pages are no different. Yellow Page publishers create directories with useful content in order to get consumers to use it. The more people who use the directory, the better it is for its advertisers. Why advertise in a book that only 5 percent of shoppers use, verses one that 30, 50, or even 75 percent use?

Yet, there is one critical difference that distinguishes Yellow Pages from nearly all other forms of advertising.

Television, radio, direct mail, outdoor, newspaper ads, and banner ads all have one thing in common – they interrupt the consumer when they are doing something else:

• Television/radio interrupts you while you are watching or listening to the program
• Direct (i.e., junk) mail interrupts you while you are sorting through your mail for bills
• Outdoor interrupts you while you are driving
• Newspaper ads interrupt your while you’re reading the latest news.
• Banner ads interrupt you while you’re surfing the web

Here’s what sets Yellow Pages apart: when someone is looking in the phone book, they aren’t doing anything else. Yellow Pages ads get one hundred percent of the consumer’s attention. That’s because the consumer has become a buyer who’s now looking for a seller, instead of the other way around.

Most other types of advertising have a very low response rate because only a small percentage of people who see or hear your advertisement are ready to buy at that moment. Unlike Yellow Pages, you, the seller, are looking for a buyer. This type of advertising reaches the vast majority of consumers at the wrong time.

90 percent of those that pick up the Yellow Pages are planning to make a purchase. Yellow Pages are unique because its users are buyers who are seeking a seller, instead of the other way around.

Because Yellow Page shoppers are further along in the buying process, Yellow Page ads have a high response rate. More than 80 percent of its users will make contact after referencing the Yellow Pages.¹ Of these:

• 93 percent will make a phone call
• 31 percent will show up in person
• 10 percent will go online
• 1 percent will get in touch by mail

Yellow Pages shoppers also close higher. Over 40 percent will make a purchase after looking in the Yellow Pages.¹ And over 90 percent of those will buy from same merchant seen in the Yellow Pages.¹

That’s not to say other types of advertising are inferior or ineffective. Every type of advertising has its inherent strengths and weaknesses – and Yellow Pages is no exception. Its primary weaknesses is that it’s a passive medium – it does nothing to spur your customer to action. It only provides the means of finding you once he or she does decide to act.

But... Yellow Pages can make your other advertising even more effective, because it provides a place for consumers to go after they’ve seen or heard your advertisement. So, two weeks later, when they realize they need you, they go to the Yellow Pages to look you up…

…but it they can’t find you, then your advertising has led them straight to your competitors, hasn’t it?

You see, your other advertising is great for targeting consumers and creating need, but how much more targeted can you get than “ready to buy”?

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¹ Knowledge Network/Statistical Research Inc (KN/SRI). One of the top 25 media research firms in the U.S., with numerous Fortune 500 clients, including all of the major radio and television networks, Yellow Pages publishers and ad agencies.

It’s become an online hobby for many marketing “gurus” to diparage Yellow Pages as “antiquated” and “obsolete.” They say things like, “Who uses the Yellow Pages anymore, anyway?” or they criticize the research studies yet never provide any data of their own to prove their point.

In reality, all studies are done by independent media firms (much like the Nielsen ratings do with television). So in the interest of the truth, I present to you a joint study, conducted by two such firms, Burke and comScore, which found the following about Yellow Page usage:

• In total, consumers referenced print Yellow Pages 12 billion times in 2009. (The average consumer turns to the Yellow Pages about once per week.)
 
• When looking for local business information, 65 percent of consumers go to print and/or Internet Yellow Pages, while 58 percent use a search engine. (Flyers/coupons were 38 percent, newspapers were 33 percent, and magazines were 14 percent.)
• The study also found that consumers have a greater trust in Yellow Pages compared to other sources. More than two-thirds (67 percent) said that print or Internet Yellow Pages is the source they trust most for finding local business information, compared to 33 percent for search engines.

A separate study [pdf] revealed that, of the total leads generated by an average Yellow Pages print ad, 44 percent come from consumers visiting the advertiser’s website after seeing the ad; while 56 percent come from phone calls. This means that advertisers who decide to cancel their Yellow Pages because of “lack of phone calls” are actual losing more leads than they realize. The study went on to say:

The study, which revealed the extent to which Yellow Pages users visit a business’s web site after reviewing their print ad data, suggests that leads from traditional print media are being underestimated and that traditional print media remains a reasonably effective way to drive people online and convert them into leads.

In this new digital age of satellite radio, cable TV, mobile and Internet, advertising channels have become more and more fragmented, and there is no one “silver bullet” when it comes to maketing. When looking for ways to drive in additional revenue, the objective marketer will evaluate all the available options. Don’t be too quick to dismiss Yellow Page advertising as “old school.” The research proves otherwise.

I’m conducting sales training all week, and one of my students showed me this video:



The Jerk came out in 1979. Since then, however, people have become skeptical about how effective Yellow Page advertising really is:

...most of these books are a complete waste, likely only to be thrown out (if touched at all)

...local search is making Yellow Pages obsolete...

...phonebooks are obsolete. Seriously, when is the last time you used one?

Should you still include Yellow Pages as part of your advertsing mix? Or have they become fossil fuel? Stay tuned... I’m about to answer that question in a series of upcoming posts.