March 2, 2004
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in this issue
-- Can You Click Me Now? . . . Good!
-- This week's 5-second question
-- Answer to Last Week's Brainteaser
-- Guerilla Marketing Toolkit
-- This Week in Pictures
-- Mad Cow
-- Head Shop
-- Truth in Advertising
-- The Perfect Gift
-- Internet Use Increases
-- This Week's Brainteaser
-- Quote of the Week

Can You Click Me Now? . . . Good! back to top
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On March 1, Verizon made a massive switch in the functioning of its Internet Yellow Pages, SuperPages.com.

They've incorporated pay-per-click (PPC) as the primary method of displaying local advertisers instead of the subscription model (a flat monthly fee) that has been the mainstay of the Yellow Pages industry.

It's a pretty gutsy move by Verizon, but I think that they'll probably reap substantial rewards from it.

Here's why . . .

Since 1995, Verizon (GTE in those days) has been spending money like a drunken senator driving traffic to SuperPages.com. Their idea was if they had enough traffic, the salespeople could be persuaded into selling more ads online. It seemed like a good idea at the time anyway.

The problem is that SuperPages hit a wall. They didn't have a way to monetize the best real estate in their directory. They had great traffic, but the best positions were already sold at fixed prices. Even if traffic went up substantially, it didn't change the revenue from the ad space.

It's the same in the print Yellow Pages business. A quarter page ad under the classification "Shoelace Repair" sells for the same price as a quarter page ad under the classification "Lawyers-Who-Will-Rip- the-Heart-Out-of-Your-Worthless-Cheating-Pig-of-a- Husband".

Ask any recently divorced shoelace repairman, and he'll confirm that the former classification is much less lucrative than the latter. That explains why there are so many more lawyer ads than for shoelace repair.

On the web, keywords are real estate.

To demonstrate the value of this real estate, I recently checked Yahoo to see how much they were charging for the key words "Attorney in San Diego". It turns out that a local DUI attorney is paying $33 per click when a Yahoo user clicks on his ad. Personally, I think that anybody paying $33 bucks per click may have been inhaling the fumes coming off his clients. It does go to show the extremes that some people are willing to pay to be #1.

I ran a similar search on Yahoo for "shoelace repair". Not surprisingly, I found that no advertisers were willing to pay anything for those search terms.

Using "pay-per-click" technology, search engines and now IYPs have the ability to continually auction their best real estate to the highest bidder. It raises the price for the top classifications and lowers the price of the lesser used classifications. Verizon has set a $10 monthly minimum fee.

Nightly Auctions

Under the new pay-per-click model, SuperPages.com will be "re-paginated" every night with the advertisers offering to pay the most per click displaying up at the top of the classification's search results. When that advertiser's money runs out, he'll disappear from the directory until the following month, or until he deposits more money with Verizon.

For Verizon, it's a much more effective method of optimizing the inventory of their IYP. It enables them to keep spending as much as they need to drive traffic, because they monetize every search. The bulk of the revenue of a directory is concentrated in about 50 classifications. If Verizon can get bidding wars going in a few of these, their bold move will pay off big time.

Charging for Free Information?

In the new design, Verizon suppressed all of the phone numbers in SuperPages.com so the user must click on a link to see the phone number. Every other IYP shows the phone numbers without requiring a user to click. Whenever a SuperPages user clicks to see a phone number, Verizon's cash register rings and the advertiser pays. Seem to me like the only party benefiting from this extra step is Verizon, but it does allow them to report how often a business was viewed.

More than one way to skin a search.

Assuming that a user may click on several businesses before making a call, Verizon receives payments from multiple advertisers on most searches. Google and Yahoo don't have that luxury. On Google and Yahoo, when you click on a link, you're taken away from the search engine to the advertiser's web site. On SuperPages.com, when you click on a phone number, you're still right in the search results where you can click on a few more advertisers before leaving.

Will this undermine their sales force?

I expect that this move will reduce Verizon's reliance on their field salespeople. After the initial sign up of an advertiser, there's really not much reason for a premise rep to visit an account. All of the interactions with the pay-per-click will probably be handled by a customer service rep in a phone room or via a self-service web site. There's no longer a set renewal cycle, so many accounts will become perpetual. Also, Verizon knows that telemarketers are much less expensive than their field sales people.

Selling the pay-per-click (PPC) will be tricky for Verizon's field salespeople. I seriously doubt that most advertisers are ready for something like this. It requires a leap of faith that the advertisers may not be prepared to make. For those advertisers, Verizon has kept its subscription model to act as a base product. It appears that the PPC advertisers will display above the subscription advertisers.

It's 10 PM, do you know what your keywords are worth?

For the advertisers, managing a PPC campaign can be very demanding. The constant jockeying of positioning and budgets can become overwhelming for all but the savviest advertisers. Luckily, a customer service rep will be standing by ready and willing to help optimize any business need.

Come to Mama

As their new model gets kicked into full swing, expect Verizon to aggressively buy all of the traffic it can find into SuperPages.com. Every incoming search will be multiple opportunities for their cash register to ring.

Final Thoughts

By taking this bold move, Verizon has staked the future of its IYP on a pay-per-click model. This will probably be a rough year of transition for some of their advertisers who are comfortable with the old way of doing business. However, I'm certain that Verizon will reap substantial rewards as the bidding wars heat up for more search terms.

Expect to see many of the other IYP publishers embracing similar strategies as the battle continues to deliver local shoppers to local businesses.

This week's 5-second question back to top
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I actually did some real work last week, so I didn't get around to posting the answers I received. Keep them coming, I'll get them all online soon.

What's your opinion?

What do you say to convince an advertiser to place ads under headings he hasn't previously considered?

I'll pull the opinions together and report them in an upcoming issue.

Send your opinion to Dick@YPcommando.com

Answer to Last Week's Brainteaser back to top
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Festus hired Buford to work the drive through window at his new restaurant,

“ Critter-on-a-Stick.”

Every “Atkins Friendly Varmint Meal” is supposed to contain 4 items . . .

• Critter
  
• Stick
  
• RC Cola
  
• Fried fat chips
  
  

At the end of the first day Buford served exactly 100 Varmint Meals, but he made the following errors:

• 70 meals contained no Critter
  
• 75 contained no stick
  
• 85 contained no RC Cola
  
• 80 contained no fried fat chips
  
  

What is the minimum number of Varmint Meals that contained none of the 4 items? (The customer left with an empty sack).

OK, this was the toughest one in a while . . . I missed it myself.

See the Answer & Our Celebrity Winner

Guerilla Marketing Toolkit back to top
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I have long been a fan of Jay Conrad Levinson's "Guerilla Marketing" books and tapes.

He captures the essence of the grassroots marketing that it takes to survive in any competitive business.

His team has put together a Guerilla Marketing toolkit that updates the best strategies and makes them easier to implement.

Guerilla Marketing goes hand-in-hand with Yellow Pages advertising. The more you understand the principles of building a local business, the better you will be able to become a valuable resource to your clients.

These guys are my heroes.

Check out the new Guerilla Marketing tools

This Week in Pictures back to top
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I spent my childhood punching my brother in the arm, and getting punched back. I'm not exactly sure what we were trying to prove, but he hit a lot harder than I did.


++++++++++++++++++++++++++

And now a word from our sponsor . . .

This newsletter is underwritten by generous support of TransWestern Publishing, one of the nation's leading independent publishers of telephone directories. Serving 25 states with 332 directories, TransWestern delivers outstanding value to a quarter million local advertisers.

We may not make the most noise in the market place, but we consistently deliver outstanding value for our advertisers.

All in all, it's a very rewarding place to work where individual accomplishment is recognized and rewarded.

We have management positions open in 20 states.

Mad Cow back to top
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The US government has determined that there are no cases of Mad Cow Disease in the nation's food supply.

Would somebody please mention this to Elsie?

See the evolution of this newsletter at YPcommando.com archives

Head Shop back to top
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My community has outlawed head shops.

I suppose it's for our own good.

I'll be speaking at the ADP Convention in April

Truth in Advertising back to top
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You have to admire anybody who is this honest.

Let me know if you want your link added to my site

The Perfect Gift back to top
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I'm going to buy my Uncle Habib a Sharper Image Turbo-Groomer 5.0 Nose Hair Trimmer for his birthday.

I'm afraid that he'll sneeze one day and flog himself to death.

Sharper Image Turbo-Groomer 5.0 Nose Hair Trimmer

Internet Use Increases back to top
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A nationwide survey by comScore Networks has determined that nearly 5 out of 10 kittens are now online.

I believe it's their most accurate research to date.

I'll be speaking at "Digital Directories: Interactive Local Media"

This Week's Brainteaser back to top
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To make up for last week's brain buster, I'll throw you a bone this week. . .

Can you name four days that start with the letter "T"?

Email your answer to puzzler@dicklarkin.com

We'll select one entry to win one of the few remaining bottle-poppers with a year's supply of bragging rights.

To improve your random chances of winning, please include your name, company name and mailing address.

Want some free airtime? Send me a photo, idea, tip, quote or cash, and I'll throw you a link.


Quote of the Week back to top
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We don't know a millionth of one percent about anything.

Thomas A. Edison (1847 - 1931)