It seems odd, but if you want a shining example of successful local media transformation, look to a yellow pages company.
One by one, the stodgy old directory companies are disappearing. Gone are AT&T Yellow Pages, White Directories, Yellowbook, Verizon Superpages, and Donnelly Directories. Replacing them are leaner, digitally focused companies renamed YP, LocalEdge, Hibu and Supermedia. While other local media companies struggle to get more than 10% of their local ad revenue from digital sales, these companies are above 30%. LocalEdge (formerly White Directories, owned by Hearst) is above 50%.
YP, formerly AT&T Yellow Pages, stands head and shoulders above the rest. In an age when fallout from the digital comet is suffocating the biggest media reptiles, YP has morphed into an alligator.
David Krantz
(CEO David Krantz will detail YP’s transformation at the 2013 Local Online Advertising Conference in NY March 4-5. Click to see Agenda.)
YP initially struggled with the Albatross of an old print-based business model and a profit margin to protect. It’s the same dilemma faced by newspapers, TV, radio and direct mail companies. When they are forced to protect profit margins and are lulled into thinking their existing business managers can manage both analog and digital ventures, they falter. They don’t morph. They mediocritize.
A year ago YP transformed from two separate companies – AT&T Interactive (the digital side, operating Yellowpages.com) and AT&T Advertising Solutions (the print side, operating hundreds of directories) – into one. Today, YP is one the largest local advertising companies in the U.S. with $3 billion in ad revenue – bigger than all of Gannett’s newspaper operations. Roughly $1 billion of it comes from digital products, making YP the second-largest locally based online advertising company, just behind Autotrader.com. (Read about Autotrader’s next disruptive plan here.)
- At the helm is David Krantz, perhaps the most digitally savvy CEO in the local media business. In 2012 he helped guide the newly formed company, owned by AT&T and a new investor, Cerberus, to a critical decision: Don’t focus on profits; focus on the longer term. “Our goal,” he told me recently, “was not to harvest out the cash. There are a lot of easier ways to earn a 15-20% return on your money. This is a transformation play.”
How is YP making the transformation from a print company, to print+digital, to an integrated company? One of the key ingredients is a new set of people who aren’t indoctrinated by the old business model. “We’ve been able to attract really great people,” David said, “because they’re excited about the transformation and the vision.”
Krantz said people want to believe they’re working toward something meaningful. Something noble. YP’s vision is simple and brilliant: “We want to help local businesses and communities grow,” Krantz said. So there you have it. YP is helping communities. They’re not intent on being the No. 1 news and information source, or the most-trusted source of news. They aim to help local SMBs and communities grow.
It’s a fascinating story – so fascinating that I’ve asked Krantz to outline that transformation, and how it’s folding out at YP, during our 2013 Local Online Advertising Conference in March. Click here to see the agenda. This year’s theme is “Meet Your Disruptors.” Had they followed a different path, the AT&T Yellow Pages folks would be sitting in the audience, learning how they’re being disrupted. Instead, they’ll be on stage as YP, the disruptor.
Tags: #LOAC2013, Borrell Associates, Conference, Digital Media, Directory, Gordon Borrell, local media, local online advertising, YP
Do they give their employees benefits yet? When I was there 90%+ of the workforce were categorized as “contractors” and therefore could not apply for health benefits.
What a well written press release!!!
Patrick – The company has really changed (for the better) all companies have pros and cons. The hope is that you position yourself in a comany that has more pros than cons (for your situation). I have been a Media Consultant for just over a year and can say that while I do not agree with everything (who does?) I agree the direction and committment (from YP Holdings) is a team I want to be part of. I know that sometimes people are in the wrong spot at the wrong time (for them) but if the benefits were the only thing you found distasteful you should try again.
Danielle Plunkett
For the mulifamily housing industry advertising Apartment Guide, a TPG – Primedia-Consumer Source company, are the disruptors. Digital offers so much more to the smart consumer today. Fascinating story.
Interesting article considering YP.com was the WORST company ever. The product line was based on fraudulent #s, the Management was a group of Philly morons who created a disastrous culture & the turnover was well over 400% per year. They have burned through more talent than any company deserves & now they struggle to replace them with unproven reps with no local connections.
And now YP wins WORST Company Ever. Oh I hear they are having a lot of issues with their foreign slave experiment, shifting all the publishing to India. Oh noes! Whatever will they do?! I hope they go broke and SOON.
The disruptor? When it comes to disrupting American jobs, yes. YP has outsourced the directory business to India putting many people in the U.S. out of work. They obviously care not for the customers or the quality of the product, just trying to run it into the ground and squeeze as much cash out as possible. I guess that’s the “savvy” thing to do these days.
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