Experts say Yellow Pages directories have not risen to the challenge of the Internet adequately yet. Charles Laughlin, Program Director at The Kelsey Group has been tracking the Yellow Pages marketplace for more than six years. MarketingSherpa contacted him to find out what he feels the top three challenges the Internet brings to the marketplace. In his own words:

”A general comment: printed Yellow Pages usage is in decline, though most of it can be attributed to systematic changes in many key categories within Yellow Pages--more superstores versus mainstreet businesses, etc. We believe the Internet has been a relatively minor factor to date, but it will become a major a factor going forward. I would broaden our definition to refer to directory information accessed through any variety of platform, including desktop, wireless, interactive voice, etc.

1. Next generation users.
The Internet--as well as voice, wireless and whatever comes next--is shaping how younger people gather information. As Generation Y and beyond grow into adults with disposable income, it seems doubtful that as many of them will turn to printed directories for information as previous generations. They will in all likelihood perform "directory-like" searches from portable devices, the Web, etc.

2. Business users
Yellow Pages usage is declining most rapidly among business users--anyone looking up for a business purpose. This appears to have more to do with the Internet, since the availability of desktop browsers is arguable more convenient than the print directory in the workplace. Changing procurement models, some of which are Internet related, are also having a major impact on business usage.

3. Relationship with local businesses
Yellow Pages publishers are facing growing competition in owning the relationship with local businesses. We are seeing more companies offering storefronts, free web sites, coupons, email marketing and other online sales and marketing tools to local businesses. Publishers must have a bundle of services to offer SMEs (small and medium size enterprises) that competes with the broader market. This has been an enormous challenge, in particular in adapting the print sales force to selling online services, which have lower price points, more competition and a longer sales cycle. Many reps have difficulty understanding online advertising and promotion as well as they understand printed Yellow Pages.

As far as success stories go...BellSouth, Qwest Dex and Verizon have had some success in training their sales reps to bundle online services along with their print program, and have managed to generate some online sales.

All of these organizations struggle with the right balance of print/online as well as with maintaining strong renewal rates. We are seeing more Yellow Pages organizations develop specialized sales channels to handle Internet, at least on some key accounts.

Overall, online Yellow Pages services do not appear to be the answer to declining print usage. The sites overall have poor usability and tend to lack the accuracy and depth even of the printed product. “

According to Lawrence Angove, President & CEO of the Association of Directory Publishers, a group representing independent phone directory publishers, “over the past 15-20 years all innovation has come from the independent side. We published books reflecting the way people moved and shopped -- not the way telephone lines ran. Value-added features like maps, government listings and audiotext, came from the independent side because we are more flexible and more entrepreneurial.” However this innovation doesn’t appear to be extending much to the Web. Angove notes, “Our people are more bottom-line. Many have taken a wait-and-see attitude on heavy Web investments. They don’t have the deep pockets the local exchanges do.”