Wednesday, April 19, 2006

Why Do Advertisers Hate the Yellow Pages?

After coming back from Casa lupe for lunch; a great little Mexican place where a few of our team members argued over release schedules, we came back to find the Los Altos fire department giving us an inspection. Lucky for us, they did not notice the Cray running in the closet.

When we got back a few of us found a newsletter forward from Dick Larkin who runs an interesting site called YP Commando. He leads work around internet yellow pages and understands what we mean when we talk about the Yellow Pages not delivering for small merchants. We believe in delivering the Local Internet to local merchants because it can deliver a 100 times improvement in the value people get from yellow pages ads. He has a great blog at but check out his newsletter as well.

Here is an interesting excerpt:


Tom Morgan*, an HVAC / plumbing contractor in Virginia called me looking for advice for his Yellow Pages advertising. (*name changed)

He was the seventh contractor who had contacted me in as many days.

Tom had cancelled his $127,000 annual Yellow Pages advertising spend. Apparently, Tom cancels every year. The sales manager begs, pleads, threatens and cajoles Tom into renewing for yet another year.

The annual dance was on again as the directory is preparing to go to press. Tom is threatening to bail, but he will probably renew.

Tom is afraid to losethe seniority position at the front of the section, but he knows that his ads are not as effective as they once were.

Sparking his outrage, his first position double-truck ad has been pushed back by a page of leader ads. It's been obscured by a tab, and the price has gone up consistently while usage drops.

His fear of lossis much stronger than his anticipated return on investment.

In this sense, the Yellow Pages model of "substantial penalty for early withdrawal" is amazingly powerful in keeping dissatisfied customers from leaving.

A few independent publishershave taken market share, and Tom has ads in them all, but he continues to put most of his investment in the major utility directory.

Tom's comment to me was, "I can't wait for the Internet to put these Yellow Pages guys out of business." What concerns me is that everywhere I turn, I hear similar comments from other business owners.

Why is this?It makes no sense for a $25 billion advertising medium to have legions of unhappy clients.

This is exactly what we are finding as we head towards over 5000 merchants from all over the country working with MerchantCircle to get the advertising opportunity from the Local Internet to work for them. They are seeing results from the Local Internet, because it is cost effective and that is where the Local Customer is. Places like Health Logic Wellness or the GPBCC are coming onto MerchantCircle every day looking for ways to capture the opportunity the local internet offers.



  1. Thnaks for your email Ben, I posted the two links to my blog.
    I appreciate the input.

  2. I knew print yellow pages is a dying breed. Hardly anyone uses it anymore. I fell for the pitch about online yellow pages, so I bought. Four months into I have the # 1 position in my industry. Still NO leads. NO calls. NOthing. Online yellow pages is a major waste. People go to Google, not yellow pages.