It seems the Wall Street Journal - the bastion for business news - has seen the future of the Yellow Pages. And it is not good.
Of course we've been talking about the shift from traditional media, particularly the Yellow Pages, to online media, such as search engine marketing (SEM) for quite some time.
Now mainstream press is pointing out that the current economic downturn just might be fast forwarding this shift a bit.
Just how quickly are things expected to change? Very quickly:
"Print and online ad spending on yellow pages will plummet 6.3% next year, more than double the rate of decline expected for broadcast TV, according to forecasts by Wachovia analyst John Janedis. Within the next four years, ad spending will fall 39% in print directories alone -- the steepest projected decline across all local-media categories, according to media-research firm Borrell Associates.
"It's pretty darn hard out there for everybody, and those that have less staying power, it just looks like it's going to be a difficult environment to be able to hang on in the long term," said Dave Swanson, chief executive of R.H. Donnelley, a Cary, N.C., yellow-pages publisher, during a conference call on the company's third-quarter earnings.
Facing the real prospect of extinction, the publishers, many of which have considerable debt, have been slashing jobs, scrapping dividends and exiting unprofitable markets. Shares of two of the biggest publishers, R.H. Donnelley and Idearc, have plummeted 99% in the past year."
That's right, those are some pretty scary numbers for Yellow Pages publishers. The business is dropping quickly, the companies have massive debt and their stock is in danger of moving over to junk bonds in the span of a year.
This certainly shouldn't engender comfort for potential advertisers, either. And the attempt by publishers to move online has been less than successful, according to both our numbers and the Wall Street Journal.
It seems that the next step for the small and medium-sized businesses that have been working primarily with those publishers to find new advertising sources. Luckily, the web is there, ready to jump into headfirst. And, of course, we're happy to help.