0 Yellow Book USA Joe Walsh Chief Executive Officer.
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Transcript of 0 Yellow Book USA Joe Walsh Chief Executive Officer.
2
Disclaimer
During this presentation we will be discussing Yell’s business outlook and making certain forward-looking statements. Any statements that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially.
We urge you to read the Risk Factors and cautionary language in the annual report posted on our website.
We also draw your attention to our press releases which are posted on our website, for more information on the risks and uncertainties.
3
US market overview
The US market is the largest in the world at c.$15bn
Yellow Book is the #1 independent– 60+% of independents
Yellow Book Network is the fastest growing internet yellow pages*– #3 IYP site
– Yellow Book Network usage up 110% (on a rolling annual basis)
* Source: comScore June 2007, Q1 2006 – Q1 2007
4
Market outlook
Share shift from incumbents to independents continues
Yellow Book is benefiting from shake out in independents
Brighter future expected than for incumbents
5
Kelsey shows continued shift from incumbents to independents
Yellow Book’s market segment is forecast to grow at 6.2% CAGR
Return on investment still strong from print– 14:1 return for local advertisers**
US Directory Share, 2006-20112006 Total(US$
Millions)2006
Share
2011 Total(US$
Millions) CAGR2011
Share
Incumbent Publishers
$11,752 73.8% $11,719 (0.1%) 62.2%
Independent Publishers
$3,232 20.3% $4,364 6.2% 23.2%
Online Only* $943 5.9% $2,754 23.9% 14.6%
Total Revenues $15,927 100% $18,837 3.4% 100%
*Includes both local search and IYP revenues generated by search engines and stand-alone IYPs.Source: The Kelsey Group (2007)
** Source: YPA 2007 Facts and Media Guide, Excludes national
6
Yellow Book brand
Clever, memorable advertising– Recall of campaign featuring
Carradine has surpassed 50%*
Driving inbound telephone and email leads– Inbound email reaching 1,000/wk
– Telephone calls reaching 10,000/wk
Strong brand awareness and loyalty nationwide
Known for delivering “leads for less”
* Yellow Book USA 2007 research, conducted by TNS. Nationally representative sample of adults responding to the questions:Have you seen the TV commercial with young man seeking enlightenment and higher knowledge; guru played by David Carradine holding laptop computer or yellow pages. Base: Total (n=2500)
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Yellow Book brand awareness
When thinking about the yellow pages people use most often to
look up information or phones numbers about businesses, which directory first comes to mind?
*Yellow Book USA 2006/2007 research, conducted by TNS. Nationally representative sample of adults (Top-of-Mind Unaided Recall of yellow pages brands). Base: Total (n=2500) TNS (Taylor Nelson Sofres plc) is the world’s foremost provider of custom research and analysis, combining in-depth industry sector understanding with world-class expertise in the areas of Retail & Shopper Insights, Stakeholder Management, New Product Development, and Brand and Communications.
0%
4%
8%
12%
16%
Feb 06 Apr 06 Aug 06 Nov 06 Mar 07
Verizon AT&T Dex BellSouth SBC Yellow Book
Yellow Pages Category : Top-of-Mind Brand Recall
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RCF shows cost per lead comparison
Yellow Book
$13.44 per lead
816 calls
Idearc
$34.46 per lead
366 calls
Example of competitive meter advertising program from the Lehigh Valley market. Example should not be viewed as representative for all advertisers in the Lehigh Valley market or other Yellow Book markets.
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Pricing
We still have a price advantage in every like market
Despite incumbents’ pervasive off rate card deals our rates are still lower in most accounts
Price advantage extends to new media offerings
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Yellow Book – #1 directory in Annapolis
Syndicated research co-sponsored by Yellow Book and Idearc– #1 Yellow Book Annapolis-Anne Arundel, 46.4%– #2 Idearc Annapolis, 42.4%– #5 Idearc Annapolis Companion 1.6%
YPMR Syndicated Research, Knowledge Networks/SRI Quarterly Update, Report for Annapolis, MD October 2006 - September 2007. Note: Research conducted in Directory Distribution Area (DDA)
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0%10%20%30%40%50%60%70%80%90%
100%
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Companion usage low
Expensive, redundant, incomplete, hard to read, wasteful Incumbents will soon try to migrate companion revenue
Knowledge Networks/SRI, YPMR Syndicated Research (Oct 2006-Sept 2007 Annapolis, Richmond, Huntsville, Staten Island, Philadelphia; Jan- Dec 2006 remaining markets). NOTE: Results shown are for all markets to which Yellow Book has access to Syndicated results for the incumbent’s footprint, either because the study was co-sponsored or because incumbent & Yellow Book scopes are identical. Results for other markets may be higher or lower
13
New US Companions by Year, 2005-2007
The clock is ticking on companion books
7485
236
2005 2006 2007
(64%)
(13%)
There was a 70 percent decline in the number of new companion titles launched in the U.S. directory market from 2005 through October 2007. These data support the view that the opportunities for new companion launches in the U.S. market are diminishing. The companion model works best in larger markets, many of which already have at least one companion product
Sources: YPA IRIS Online, The Kelsey Group (2007)
14
Market is saturated and launches are slowing
349475
592
2005 2006 2007
(20%)
(27%)
There was a 41 percent decline in the number of new titles launched in the U.S. directory market from 2005 through October 2007. This suggests that both the opportunities and the appetite for expansion is waning in the U.S. Yellow Pages market.
Sources: YPA IRIS Online, The Kelsey Group (2007)
New U.S. Print Directories by Year, 2005-2007
15
Economic resilience
Tried and true – proven results
Annual commitment
Breadth of classifications
Seniority ad placement
Businesses need more leads in difficult times
16
National sales
Double digit national sales growth
Innovative programs recognized by ADM*
*ADM: Association of Directory Marketing (Certified Marketing Representatives (CMRs) and yellow pages agencies are ADM's main constituents.)
Yellow Book received two Publisher Awards at ADM’s 2007 Annual Conference
ADM Publisher Awards each year recognize the industry's brightest stars for their contributions to the national yellow pages marketplace.
17
Market adjustments
Better offers to customers
Enhanced compensation to media consultants
Color roll-out
Tweaked credit practices
Customizing metros
Local advertising versus national
Stepped up internal communications
Easier to do business with
18
David versus Goliath
Great pride in our “cause”
Conviction in our value story
Catalyst for change
Superior sales leaders
Long term perspective
Absolute integrity
Welcoming the opportunities new media will bring
19
US online market
Large, fast growing market Internet yellow pages are thriving IYP delivering solid return on investment for advertisers Capable of winning online
IYP searches account for 28% of all local searches
IYP searches account for 31% of all local searches
Online Local Search
Source: comScore 2006
20
Expansion
More selective with new launches– Unique capability
– We’re better at it than anyone
– In-fill process suited for us
New media-only market launches
Acquisitions – accretive, tuck-in print acquisitions remain
New media acquisitions
21
Summary
Great year operationally
We outperformed the industry – again
Now prepared for slower print industry growth
Now prepared for faster online growth
Key hires – Pat Marshall and others
Many cards unplayed
Embracing our chance to tap into a huge, fast growing new market
Rather be us than any other player
23
US online trends
Online advertising growth continues to outpace all other media
Online advertising will reach $21.4B this year and represent 7.4% of all advertising spending
0
2
4
6
8
10
2006 2007 2008 2009 2010 2011
Source: eMarketer, Aug 07
CAGR 30%
US Internet Ad Revenues by Format
Source: IAB, Oct 07
Search41%
US Local Online Spending ($B)
Display Ads21%
Classified17%
Lead Generation8%
Rich Media 7%
Other6%
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Online strategy
Provide a large volume of highly qualified leads to our advertisers
Use an integrated network of consumer-facing sites, applications and devices
Provide consumers with highly relevant information and tools to make more informed and timely purchasing decisions
Create compelling, easy-to-navigate, feature rich environments that are available when, where, and how consumers choose to use them
Be consistent with our overarching strategy of “leads for less”
25
Key measures
* Searchable advertisers down due to TWP transition pricing
76%
76
134
H1 07 H1 08
Revenue per average searchable
advertiser($)
390366
H1 07 H1 08
Searchable advertisers
at 30 Sept (000s)
6%*
4.5
8.9
Oct 07 Oct 08
Unique visitors
October (m)
101%
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Compound quarterly growth rates
Revenue ($m) Yellowbook.com Unique Visitors (m)
0
5
10
15
20
25
30
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
Yellowbook.com WebReach
CQGR 13.2%
0
5
10
15
20
25
1Q072Q073Q074Q071Q082Q08 Oct
CQGR 18.1%
Source: comScore. Includes traffic from the Yellowbook network
27
Yellowbook.com traffic
0
50
100
150
200
250
Nov06
Dec06
J an07
Feb07
Mar07
Apr07
May07
J un07
J ul07
Aug07
Sep07
Oct07
Yellowbook SuperPages YellowPages Dex
Indexed Traffic Growth(November 2006 = 100)
Source: comScore. Includes traffic from the Yellowbook network
28
Driving usage
Marketing communications– Very successful television campaign
Search engine optimization
Search engine marketing
In-book promotion
Personalization
Downloadable toolbar
Traffic purchases and partnering
29
Site developments
Entire site is undergoing redesign Enhanced search capabilities Deeper level of personalization Expanded feature set Easier navigation Additional monetization opportunities More content Optimized for search engine discovery and mobile internet
access
Site redesign will provide more flexibility for future enhancements
30
Recent launches
Video clips
Prioritization products
Click-to-call
Click-to-save-and-send
Print and internet products “decoupled”
32
WebReach
Budget-based PPC product with distribution through Google and Yahoo! and seven pricing levels– Includes options for website
design, hosting, and call tracking
Adding flat-rate guaranteed clicks product– Packages based on desired
monthly clicks
33
We believe there will be a viable market and we intend to be in it
Mobile
Market is embryonic– No standards, multiple platforms, carrier “walled gardens”
– Fragmented marketplace
– Apple’s I-phone, Google’s Android, and Nokia’s N810
Current WAP offering generates <1% of searches
Future is multi-modal: voice in, data out– Eliminates the form factor problem