Yellow significantly shrinks staff numbers as digital dogs keep barking

As the focus continues to shift to online products like YellowToolbox, the print bell continues to toll at Yellow Pages, which has announced it will lay off around 20 percent—or 125—of its staff, primarily from the sales department. 

NZ Post-owned Localist also unveiled plans to disestablish positions in sales and middle management last month and while the Yellow Pages doorstop certainly isn’t dead just yet, chief executive Scott Pomeroy says a “major rethink” of how the business operates made the layoffs necessary.

“We’re seeing a dramatic change in consumer usage patterns. Like many directory businesses around the world, Yellow has recognised that in order to increase value for our customers, our focus needs to be solely on transforming from a predominantly print-based directory to a sophisticated multi-channel advertising network.”

He said customers wanted year-round marketing solutions rather than ad-hoc products like the old print-based model.

Latest statistics also support this demand for digital. More than 2.9 million Kiwis say they would rather check a business’ website for information, rather than phone them. And online marketing in New Zealand grew by 24 percent in 2011 to $328 million. So while Pomeroy says Yellow already holds a 25 percent market share of New Zealand’s online search and directories advertising spend, it is focused on increasing that further with a new stable of online products and digital services.

“We are focused on becoming the number one provider of leads and digital marketing services in New Zealand, with the aim of 50 percent of our new business coming from digital within five years. We are well on our way to executing this strategy, already offering complete packages which include print, online listings, websites, videos, social media and Google Adwords marketing to our SME customers,” he said.

The YellowToolBox campaign, which was created by DDB Group and Rapp Tribal, is a good example of how far the company has moved away from its origins as a print directory.

Aimed at the more than two-thirds of Kiwi businesses that are still without a website (as evidenced by a recent MYOB study), Yellow can create their website, Facebook business page and online video—and all without the business owner having to dabble in the distracting—and often intimidating—digital world themselves.

Yellow pushed this new venture through a trial of twelve Auckland SMEs. These businesses were then monitored through films, photographs and the recording of sales—and the results were published on billboards and yellowtoolbox.co.nz’s animated digital dashboard late last year. This live progress gave Yellow the chance to test their products, and prospective customers the chance to ‘see what YellowToolbox can do for you’.

According to the website, there were plenty of positive changes for the SMEs involved in the trial. Jens Dalhoff from Frolic Café said October was a record month and November was 10-15 percent up on the previous year. And, last year, Dan French from Strictly Spouting said his diary was full till the end of the year.

With Yellow facing up to Google and, to a lesser extent, Localist, whose listings are based on ratings by users and edited by a production team, the fact that Yellow’s site ranks businesses based on the amount they pay, and whether they are a ‘category sponsor’, still rankles with some users. Unlike Google, Yellow makes no obvious differentiation between paid-for and free listings and, when you add in a commission of 20 percent placed upon these online initiatives, you can undersand why Monica Wales is no fan.

The campaign made tangible what Yellow’s new endeavor has to offer: real solutions, not only for struggling SMEs, but hopefully for Yellow. And while the the success—or otherwise—of Yellow’s new focus is yet to be determined, it’s certainly a move in a more relevant direction.

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