The company formerly known as Yellow Pages has worked hard in recent years to transfer its historical strength – helping consumers find local businesses via large printed books – into a business that’s now booking more than $1 billion in digital revenue.
YP acquired mobile ad firm Sense Networks one year ago and continues to refine and experiment with geotargeting. In January, it announced a partnership with Tapad to enable cross-device retargeting based on a user's search queries on YP.
“Five years ago, 18% of our revenue was digital, and in 2014 it [was] 44%. Next year it will be over half,” YP Chief Revenue Officer David Lebow said.
As with other print-digital media companies, revenue from YP's historical business is important, but waning.
“Print is very much in a managed decline,” Lebow said. “Fewer people use the print book, and revenue follows audience. When you have 80 million users a month, ad dollars are going to follow.”
While many digital businesses tout algorithms and self-service advertising options that allow for huge scale at low cost, YP has high-touch connections with advertisers, counting its 4,000-strong sales organization as an asset to win and retain clients.
“There are automated solutions, but local business owners don’t always trust them,” Lebow said.
Lebow spoke with AdExchanger about YP’s digital strategy and focus on mobile to win in the local advertising space.
AdExchanger: YP is an old brand, but the local space is filled with relatively new, digital-only companies too: Yelp, Foursquare, Google. What’s your take on the market at this time?
DAVID LEBOW: We’re extremely proud of the fact that YP combines the personal service of an individual consultant, the expertise of a local agency and the scale of a national brand. YP is the only company with massive reach in the local space that has [those] three key elements: marketing solutions, sales organization and audience.
Our solutions include helping businesses set up an online presence, drive leads to their business and expand their audience. We know how to build a successful marketing plan from strategy to creative to optimization to reporting.
What makes YP valuable to advertisers?
When people search on YP, 77% of people who search go and contact an advertiser right afterward, and 66% make a purchase after search.
People don’t use us to browse us for entertainment. When there’s an action, that’s when our brand resonates with people.
What role does mobile have at YP?
We’ve had a tremendous amount of success monetizing mobile, and it’s not so much through the app as much as mobile web.
Let’s say I’m a local barbershop. What kind of advertising options do I have on YP?
If you’re a barbershop, acquiring customers is hard. We act as an agency. It used to be newspaper and radio advertising, and now it’s search, display.
We can work with them to create a mobile-optimized website, and a series of services we call their web presence. If they want to show a video of their store or location, we have that. And we have listing management: Having up-to-date phone numbers and store hours is actually a hard thing for people to do.
From there, we have a second tier of products helping them with search and SEM, [to find] people looking for a barbershop in Connecticut.
We have display products and direct marketing products that are mobile and web-based. What if people aren’t searching for you now, but it’s hot out and you sell air conditioners? It might be a good time to have targeted display. We have a sophisticated mobile targeting product that helps them pulse that messaging.
YP acquired Sense Networks in January 2014, which uses location to better serve ads. How is it using this technology now?
Sense was about the engineers and the incredibly talented data scientists.
Through an anonymous user ID, Sense can pick data points of where you’ve been, and build a user profile of you and me separately, even if we’re in the same place.
We can do highly target advertising geographically or demographically. For example, I work in the city, and my son lives in the city and goes to NYU. If he comes to my office, we’ll have one point in common, but then he’ll be at a taco place near NYU, where he goes to school, and I’ll be in Connecticut.
Typical geotargeting would shoot us the same message. But Sense Networks takes into account other places I’ve been. Like if I’ve been to the gym in the past week, it would recognize that. It builds a profile of likely prospects for the business.
What’s your split between local advertisers and national advertisers? And are you trying to change that split?
Our split has historically been 85% local, 15% national. The third category is franchise and agents, business that are national brands like State Farm, that are really an umbrella brand for thousands of agents, but there’s a lot of co-op money there. State Farm can use that money to drive traffic to each of their 12,000 agents. It’s a blend of local and national.
I would say the percentage that’s national goes up five to seven points in the future, and grows faster, but I think that’s because of the consolidation of businesses. There are fewer independents. Our capabilities around multilocation businesses might change as well.
Are your salespeople selling both print and digital?
There are a lot of people that used to sell print, because that’s all we had, and now sell digital as well. Over time some of those people have dropped out of phone book altogether and sell digital only. We also have entire cities where we never had print, and they sell search, mobile and display solutions to advertisers there.
What are the different ways advertisers can buy with YP?
We have a number of business models. Some pay on annual basis, other advertisers pay CPC, CPM or cost per call.
What kind of geotargeting or geofencing might you do for a local business?
Local businesses can target the proximity they operate in. They might want to target competitors, and we’re able to do that. Not so much at the merchant level, but for medium-size retail, there’s a tremendous amount of competitive targeting. We have demographics and psychographics.
The mobile piece [with geotargeting and geofencing] is a big deal for us. We’re really committed to extending mobile monetization across search and display. We’re aware that search and display are coming together, and people are concerned about overall ROI.