Dex Usage and Sales Strategy Seems to Have Paid Off

In a recent Colorado Springs Gazette article, Dex Media announced a rather significant page-count growth in its Colorado Springs directory. While many question the viability of print Yellow Pages, particularly in a tech-savvy market like Colorado Springs, achieving page-count growth is something to take note of. According to the article, “Dex Media Inc. sold a record 1,365 pages of advertising in its 2007 directory, up 14.3 percent from last year as the Denver-based telephone directory publisher sold more full-page ads to home-improvement firms for coupons and restaurants to display their menus.” Moving from a mere 13 pages of coupons to a 64-page section contributed to the overall page-count growth.

While the article focused on print Yellow Pages still being a viable media vehicle, I believe the larger story is the sales strategy that made this possible. The restaurant and service headings were an obvious target for Dex since these represent high usage headings a directory company must win and keep from its competitors. In many Yellow Pages markets, a variety of sales strategies have been used over the years focusing on these particular headings because of the value they hold for winning and maintaining consumer usage. Companies like The Berry Co. and Verizon/Idearc have developed sales strategies that bundle half and full page ads with coupons, locator map features, menu ads and online offerings in very attractive packages. With aggressive bundle pricing, these tend to be loss leaders, unless the reps sell them in volume along with online enhancements to achieve a reasonable ROI. Generally publishers will accept the trade-off between increased usage and high returns as it allows them to sell additional coupons to other headings, increases competition at what might be stagnant headings in the service category and gives sales an added value message to bring to advertisers in the following year as usage increases.

Coupons are often derided in Yellow Pages, but they still hold consumers’ interest. What most directories lack is a significant number of coupon pages for them to be noticed or used. The fact that Dex was able to develop a 64-page section goes a long way, if properly promoted, to generating increased interest and usage of their coupon section.

With restaurants as the No. 1 referenced heading in the U.S., according to the Yellow Pages Association, and service headings ranking in the top 50 headings, focusing usage growth and sales strategy on these headings is a wise long-term marketing and sales strategy. With the intended strategy of using this as a competitive blocker, it seems to have achieved its intended goal since “Yellow Book didn’t fare as well as Dex this year. After nearly matching Dex in advertising pages last year, the Uniondale, N.Y.-based independent directory publisher sold 1,132 pages in its 2006-07 directory, a 2.3 percent decline from 2005-06.” If Dex also employed a new advertiser acquisition strategy to own new advertisers early in the campaign to keep them from going to the competitive directory, then Dex has positioned itself to win in the next directory cycle if it can retain or increase the advertisers it won or sold into these new programs.

This Post Has One Comment

  1. k

    Actually, the larger story is Dex emulating a classic "independent" sales strategy to steal market share from…the independent!? Or reverting to coupons (!?) to generate consumer interest and usage? What all this really means but doesn’t say is that in most markets the incumbent and independent will continue to duke it out for revenue and market share over both a declining base of disinterested, unmotivated advertisers and disengaged users. For investors and executive level managers the question is how does this strategy help to sustain the traditionally fat incumbent print YP margins? The answer is: it doesn’t.

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