Physical Yellow Pages Molder While Online Yellow Pages Blossom

Last Updated Aug 1, 2008 1:38 PM EDT

yellow-pages.jpgPity the phone book. As more and more people turn to online search for finding local businesses, delivering the Yellow Pages to your doorstep may go the way of the milk bottle. Borrell Associates put out a report today forecasting that the yellow pages industry will lose 39 percent of its revenue over the next five years, losing more than $5 billion by 2013.

But while the hefty physical Yellow Pages may be a thing of the past, the report is unexpectedly optimistic about the future of the yellow pages industry (especially considering the title, "Say Goodbye to the Yellow Pages").

The reason? Via ClickZ, the yellow pages industry is better suited to shifting towards online than local newspapers. From the article:

"Yellow pages publishers have spent the past three years transforming their massive on-the-ground sales forces into marketing consultants who can meet their customers' demands both in print and online," reads the report. "Their combined print/online packages are simple, low-priced, one-stop solutions to small-business advertising needs."According to the report, local directory companies made about 9 percent of their gross revenues from online sales in 2007, whereas most other local media competitors hovered below five percent. Borrell estimates that directory companies will be earning one-fifth of their revenues from online sales by 2011.

Gordon Borrell, CEO of Borrell Associates, says the shift is due not just to the re-training of the directory sales forces, but to their structure.

The yellow page directories "are selling packages of ads in print at a much lower price point than the newspapers or broadcast TV or even radio guys, so they know how to sell smaller ad packages to smaller business," he said. "So they're able to make the transition [to online sales] a lot more quickly as opposed to paper guys, who are used to selling $50,000 or $100,000 packages. It's harder to get their attention on a $1,000 or $2,000 ad sale."