Is Time Running Out for Newspapers and Yellow Pages?

As an early Tivo adopter, I shifted my television habits several years ago. I am now watching the current season of 24 on Hulu and I noticed that Idearc has been running ads for Super Guarantee.

Idearc, now the 2nd largest yellow pages publisher (US), launched Super Guarantee to offer consumers limited assurance against poor service delivered by Idearc advertisers. I assume that Idearc research indicated that consumers are wary of merchants and that the guarantee would help more consumers use their yellow pages – print and online. I applaud the focus on the consumer and think it’s a nice differentiator for Idearc. They’ve also picked up some good press off of the program.

But the program does beg the question: where’s the guarantee for the merchant? Idearc research (and experience) must similarly indicate that merchants want a return on their advertising investment. Also, I wonder if the program hints that merchants offer sub-par service and that consumers need Idearc to step in and police their interactions with advertisers. Sure, merchants want more consumer leads – and would prefer to have a guarantee on their ad spend – but does the program portray merchants negatively? Given this potential, why didn’t Idearc roll out a merchant focused program at the same time? Call it “Super Accountability”? It would balance the consumer guarantee and better serve the merchant.

The traditional media industry has been a buzz over Google CEO, Eric Schmidt’s keynote at the Newspaper Association of American Conference a few weeks ago. Like the yellow pages, the newspaper industry in under heavy attack. Schmidt argued that newspapers need to focus on an advertising-supported revenue models, quoting that Google generates 98% of its revenue from ad sales – that’s 98% of $5.51 billion in the first quarter of 2009. The majority of this revenue is from pay-for-performance text ads.

Idearc has a pay-for-performance program too, called Pay for Calls. Super Accountability could track advertising generated calls to merchants to in order to charge advertisers for demonstrated result. Tracking these calls can also help insure that quality of service (QOS) is met, and can cut off an advertiser if quality of service falls.

Controlling consumers’ phone calls to merchants could even be used to capture consumer reviews at the end of the calls. Redirecting calls from under performing merchants to higher performing advertisers creates a pipeline of new leads without printing new books or expanding the distribution of Superpages.com. All while driving additional benefit to the consumer.

Super Guarantee is a nice consumer benefit, but wont bring in (or save) ad revenue. Accountability will.

Just as Hulu and Tivo are radically changing the business model for ad-supported television broadcasters, newspapers and yellow page publishers need to find new business models. That means looking for opportunity within the threats. Transitioning advertisers to performance-based pricing serves not only advertisers and consumers (as with Super Guarantee), performance-pricing potentially delivers a lifeline to broadcasters under threat from Tivo, Hulu and others. Like Jack Bauer on 24, Idearc and other local media companies need to race against the clock to leverage their sales force to become a sales channel with the unique ability to reach the local merchant with performance-based advertising products. The benefit of this strategy is that newspapers and yellow pages can form partnerships to source leads from many sources including the episode of 24 I just watched.