BellSouth: Selling Up or Selling Out?


BellSouth Advertising and Publishing, the yellow pages arm of BellSouth, has announced that it has become an authorized agent for Google, and will market Google paid search programs through its vaunted 2,000 person strong sales force.

BellSouth and other yellow pages publishers such as Dex Media had previously created Web advertising bundles that they had been offering to their customers. These bundles consisted of various combinations of Web site hosting, Web site design, and entry-level paid search programs. However, this move by BellSouth greatly changes the playing field. It also appears to be an admission by BellSouth that paid search has become more than an optional add-on, and that search engine advertising is as compelling to advertisers as its own online yellow pages offering.

This deal also suggests some recognition by Google that to crack the potentially huge market for local advertising, it needs feet on the street, and that its self-service approach to sales and customer service fails to cut it with smaller and less sophisticated advertisers.

Can this marriage work? For BellSouth salespeople to successfully sell Google paid search programs in conjunction with print and online yellow pages, they're going to have deal with some sticky questions: Does Google replace the need for my online yellow pages advertising? How much of my yellow pages budget should I allocate now to Google? How come Google offers pay-for-performance pricing and you don't? One thing that is certain is that smaller advertisers are much more likely to re-allocate their existing ad budget to participate in Google than find new dollars to participate in Google. That means a real risk of revenue loss for BellSouth.

It's also important to remember that while corporate executives can make all the plans and sign all the deals they want, if the sales force doesn't buy in, they will not succeed. What kinds of things does yellow pages sale organization like? Simple, quick, easy, add-on sales that in no way jeopardize their existing revenue or commissions. The Google deal fails all these criteria.

My prediction: the BellSouth sales force will ultimately submarine this deal. Google will end up no worse for wear, and BellSouth will realize that repping their competition is not in their best interest. I'd also like to reiterate that what really may be making paid search so attractive is its pay-for-performance model. If so, BellSouth may want to take a look at Verizon's deal with FindWhat as perhaps a better path.

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