How Converged Sales Help YellowBook.com

Yellow Page directories don't sell advertising, they sell business leads.

That's the philosophy that drives YellowBook, said  Patrick Marshall, the company's chief new media officer, at Monday's Borrell Associates Local Advertising Conference in New York City.

“At the end of the day ... customers are buying leads from us,” Marshall said, “and they don't care where the leads come from as long as they're at a reasonable price.”

YellowBook is part of British-based Yell Group, the second biggest directory publisher in the world, and the largest independent directory publisher in the U.S. (fourth overall in the U.S.). Yellow Pages publishers have been quick to convert their massive print sales forces to online sellers. Borrell rankings show the fastest-growing is Yellowbook.com, which is on track to nearly double its online sales in 2009, to almost $400 million.

With operations in every state except Alaska and Maine, YellowBook has 3,600 salespeople selling print, mobile, SEM and marketing services. And while that size means lots of legacy customer base and a well-trained professional sales force, YellowBook  relies heavily on sales-force automation.

“As the product mix becomes more complicated, it becomes necessary to allow the computer do all the thinking and let the sales force concentrate on the relationship they have with the merchant,” said Marshall.

That online-offline mix is a key advantage. “We have a product mix that allows us to act differently than pure plays like Yelp. We can mix high- and low-margin products. For example, SEM has razor-thin margins. But by being able to mix that business with higher margin print services, we can raise that margin to acceptable levels.”

There is another way to look at that, Marshall acknowledged in response to a question. “The reason we make money is that most of the sales cost is subsidized by the print product. We're able to leverage the sales costs. “

Marshall spoke up for the industry as a whole. “Yellow Pages is hardly dead, and I think we are making great strides from being a single media company to a multiple media company.”

He shared a local search share study that showed Yellow Page publishers combined reaching a larger audience than Google maps or Yahoo maps.  And while Google search generates the most local search results, “many of those clicks go to interactive yellow pages.”

“Yellow page companies in general have a new life. We're taking the data they've gathered over all these years, and can reformat it for new media. For example, by the end of this year, we will have 50,000 merchant videos online. That's a great example of using a new medium, but we can also reformat those videos to distribute through cable, which is something we're experimenting with.”

When asked who his competition was: “The largest direct competitor is AT&T. In the context of the media space, I'd have to say Google. They're also the second-largest referrer of traffic to YellowBook.com. The largest referrer is now Facebook, which I think is very telling."

And when asked about something considered part of his company's “secret sauce” formula, he said only: “It used to be that yellow pages called on customers once a year. We're moving away from annual calls only. Some products sold are sold in a bundle, and some are sold later.”