Yesterday, BIA/Kelsey issued its annual Global Yellow Pages Forecast, which predicts the industry worldwide would erode at a 4.1% CAGR through 2017.
While this forecast may seem bleak, this pace of erosion marks an improvement over the prior five year. From 2007 through 2012, global Yellow Pages revenue declined at an 8.9 percent CAGR. BIA/Kelsey cites a couple of factors in predicting a slower pace of decline. The first is the simple fact that print revenue is already below 50 percent of total revenue in many global Yellow Pages markets (Belgium, France, Italy and Sweden to name a few). As digital takes up a larger share of the revenue pie, revenue naturally stabilizes, as long as digital revenue isn’t also declining.
We believe that digital revenue will grow at a respectable pace globally, mainly driven by the shift from IYP (a negative growth product in many markets) to digital services, which are growing, in many cases at double digit rates. By 2017, the forecast calls for digital to account for 62 percent of total global Yellow Pages revenue, compared with 35 percent in 2012.
The view that revenues will begin to stabilize (though not return to growth) assumes a few things.
One assumption is that the pace of print revenue decline doesn’t substantially deteriorate beyond its already steep decline. This could happen, but our forecast assumes that some of the larger publishers that drive the forecast will be successful at keeping the rate of decline from deteriorating over the next few years. Another assumption is that publishers will execute effectively on the provisioning of digital services, which will ensure reasonable retention rates on the newer mix of products. If execution is poor, churn will undermine growth.
The full forecast document is available to client of BIA/Kelsey custom advisory services.