The recent announcement that the Verizon yellow pages organization will become a Google AdWords reseller seems to me further proof that the big yellow pages publishers have lost their way. Yellow pages companies bear some superficial resemblance to publishers, but they are not. Their real business is saturation distribution of advertising messages to specific markets in a convenient format. This is evidenced by their approach to editorial content (free listings): "go buy a file somewhere", and their approach to circulation and audience development: "make sure everyone gets (at least) one copy whether they want it or not."
What makes their business work is that yellow pages companies know how to sell ads, lots of expensive ads, at prices that make most B2B publishers blush. I vividly recall a B2B directory publisher bragging to a yellow pages executive that he was getting $6,000 for a full-page ad. He asked the yellow pages executive how that compared to the rates he charged. The yellow pages executive blandly replied, "Oh, about the same ... per month."
So the core asset of any successful yellow pages organization is its sales force. And, thus, you grant outsiders access to your sales force at your own peril. You don't want to distract your salespeople by having them sell less profitable products you don't even own. And presumably, you would never want them selling competitive products.
Consider this hypothetical sales call:
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Verizon Rep: Hi Bill. I'm here to renew your Verizon yellow pages program. Great news, too. We're only raising rates 6% this year, and we’ve got some great advertising deals on our Verizon SuperPages site.
Bill the Advertiser: Sounds interesting. But I've been thinking maybe I should be spending some of my advertising dollars with Google.
Verizon Rep: That's an excellent idea, and we're now authorized Google resellers! You know, Google now gets over half of all searches done on the Web. Their advertising is totally based on relevance, so it's highly effective and waste-free, and best of all you only pay if somebody actually clicks through to you.
Bill the Advertiser: That eliminates all my risk! Great, let's cut my Verizon program by 50%, and put that money into Google for me.
Verizon Rep: I wouldn't recommend that. Our print yellow pages gives you total coverage for a fixed fee per year, and SuperPages is the place people go when they need to buy something locally.
Bill the Advertiser: I can't really track my print results, but I don't think my print ad is working as well as it used to with so many people online these days, and it's pretty darn expensive at that.
Verizon Rep: Well, that's why we have Verizon SuperPages. It gets unbelievable traffic, and it's the place people go online to find local businesses.
Bill the Advertiser: How does your traffic compare to Google?
Verizon Rep: Well, it's smaller, but, err..
Bill the Advertiser: Are you saying Google doesn't help people find local businesses?
Verizon Rep: Well, no, I can't say that. Actually, it's kind of complicated … but, ah ...
Bill the Advertiser: You know, let's just move my whole ad program to Google
Verizon Rep (to himself): Wow, our management team sure is bright. Without Google, we would have lost this account!