Online Yellow Pages: Growing Opportunity

SAN FRANCISCO The competition for local online merchant searches—commonly known as Internet Yellow Pages or IYP searches—is heating up, as AT&T and other Web publishers cut into Yahoo!'s business.Growth in the overall IYP U.S. search market in Q1 2007 has been driven by an increasing number of searchers, with the total number of unique IYP prospectors up 21 percent. However, the total number of IYP searches rose by a modest 5 percent during that time frame, indicating that lighter searchers have entered the market, according to comScore. National advertisers often underestimate local online directory content, said analysts, but it represents a sizable amount of online marketing activity.Consumers seeking information on goods and services conducted more than 800 million IYP search queries in the first three months of the year, according to comScore's 2007 first-quarter figures, released in mid-June. Yahoo! handled 22 percent of those searches, followed by Idearc Media with almost 20 percent and AT&T's Yellowpages Network with almost 18 percent, per comScore.The rest of the market—40 percent—is shared among a variety of other providers including Google and Time Warner.When it comes to user engagement, Idearc Media led the competition via its Superpages.com site, with five searches per user, per comScore. Yahoo! and Yellowpages each had about 4.5 searches per user.Analysts said the IYP space offers a host of opportunities, both for search providers and advertisers.The IYP is a highly profitable advertising medium, with some segments experiencing robust growth and ongoing investment activity suggesting positive future prospects, said Charles Laughlin, project director at the Kelsey Group, a strategic planning firm in Princeton, N.J. "Our research indicates that [directory] advertisers are leveraging new media options to reach consumers who use the Internet to inform their shopping decisions," he said.For example, Yellowpages.com, part of the Yellow Pages Network, saw a 50 percent increase in unique visitors and a 70 percent increase in clicks from January 2006 to April 2007, said Danny Deal, vp, local sales.Approximately 75 percent of those who used Yellowpages.com contacted merchants found on the site and 53 percent purchased from those vendors, according to Yellowpages.com CMO Matt Crowley. The average amount per purchase was $179, he said. To keep up with the rising demand for more local-search advertising options, the company is doubling its number of offices and sales professionals in 2007.

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Online Yellow Pages: Growing Opportunity

Joan Voight

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Joan Voight