Is Yellow Gold for Asia?

The Asian Yellow Pages market.

One of the fallacies of most management team is to think tha t the markets for yellow pages market is similar through out the entire world. Well, if you see what the advertising guru said sometime ago is that we produce the same ad and just run the ads with some minor modifications as the message comprehension is similar. We are living in a global village! Certainly, I agree that there is some similarity with certain markets if the demographic profiles, geographical spread of population etc are there. However, there are dissimilar features as well especially so after the initial euphoria of growth tampers out. One such is the development of the Yellow Pages market. With 6,000 copies over Yellow Pages published worldwide, it is certainly one of the largest single brands that spread globally; the total revenue is about 6% of the total advertising spent.


What makes Yellow Pages market so attractive to investors? It’s hyped to have the ability to make so much recurring revenue and has a margin as high as 50%, thus EBITA should be around 30%. The last couple of years, we saw many Telcos releasing their prized asset to the banks and fund managers. The New Zealand Telecoms was the last to go under the hammer for a huge sum so much so that they so much cash on their hands to invest and return some as dividends to the shareholders.

My point is that Asian Yellow Pages vs the different blocs of Yellow Pages are quiet different in nature. I would like to compare them in trading blocs; US, South America, African, European, Eastern European and Russia, Australia and New Zealand, North Asia, S E Asia, Indian continent.

In terms of why Yellow Pages is popular and still is in the US, Europe, Australia, Canada and other larger countries is the per capita income and geographical distance between the shops and the residents. This makes it ideal for the residents and businesses to interact through the medium of Yellow Pages as this is the lowest costs for investment with a guaranteed circulation.

Just a note here is that Yellow Pages has benefits that no other media enjoys but also it also lacks certain appeal. The benefits points of Yellow Pages are clearly four points:
Price- in terms of the CPM and ROI factors, its money well spend (depending on the classifications and also size of investment)
Circulation- Because all telephone line subscribers receive a copy of the Yellow Pages at their homes or office so, its one of the better book that is kept throughout the year.
Repeat Usage – Ads can be seen all the time when there is a need for the product or service
Advertisers are genuine as they their phones are authentic; it’s not the fly by night type of operators. So, one can have the piece of mind using the information contain therein.

I think in recent years, we can see that the Yellow Pages in Singapore and as a matter of fact, Malaysia, Thailand, Philippines, Indonesia fell like ten pins was due to the financial meltdown effect. Many companies especially the SMEs were forced into liquidation. And when they do, advertising is gone. That eventual year, some companies saw as much as a fall of 50% of their top line revenue.

Depending on which countries you are in, some countries still have the concession fees for getting the rights to publish these directories, these fees range from 10% to 50%., according to the open bid being selected. That’s why some countries Yellow Pages came under tremendous pressures to return to its original sales revenue. Many of them still have a long way more to go.

This being the advertising landscape has changed, more competitors offering different bundles, internet yellow pages and trade pages and also with the convergence, we find that advertisers have more choices.

It is common knowledge that the Yellow Pages market is dependent on the Small Medium Enterprises to advertise. During the past twenty years, there has been a shift the industries type. Especially in Singapore, the government has shifted its labor intensive factories. These companies landed up opening factories in China or to a third world country to hedge on the low wages. This resulted in the shift in the revenues types.

A study into the types of companies advertising and also which market they are trying to reach concludes that most of them especially in the South East Asian market are trying to reach a B2B type, not really a B2C. If it were to be a B2C, then, it would be for the transient or an expatriate to use. Even they are now spoilt for choice of the information – coming from Credit card companies and a host of other specific industries magazines to serve the consumer market.

That’s why the Yellow Pages are never going to be where it was in its hay days when the revenue and popularity was synonymous with its finger walking icon. There was memobility in the air with great ads that brings people to use the book as it was top of their minds.

The greatest challenge facing the S. E Asian markets are two factors
1) The high advertising rates with relatively low ROI. This is especially exacerbated by the internet new terms of advertising, key words and pay per click etc.
2) The reliance of the B2B market to use the product rather than the B2C markets. With internet and a proliferation of other media, I think it is like climbing up a wall with your bare hands.

Concluding Remarks:
Advertising is revolving especially with new media coming on streams. One must know how to harness it early so that as a media house, we play a role of early adopter adapting the media to the information. After all, the users after all, are interested to get the information to fulfill their needs! If they do not find it in the YellowPages, they will use their fingers to search it online for the best results. At this present moment, it seemed to be Google winning the race with its sleuth of new waves of offers, everything is possible with Google- which is a very sup-up more than a yellow pages. It’s a total new experience. However, a saving grace here is that Yellow Pages is more local and Google more global. One can see that if you type restaurants, over 10,000 from all over the world will appear but Yellow Pages is specific to the country. Yellow Pages will become a niche player and therefore its time to look for alternative niche use instead of becoming a main media for everyday use. Anyway, Yellow Pages have always been used when there is a need. It will continue to be used on a needs basis.