Yellow Pages: from municipal phone books to mobile phone bucks

How Montreal-based company is reinventing itself for the key Vancouver digital content market
By Tyler Orton

Yellow Pages CEO and president Julien Billot was in Yaletown June 2 after his company acquired two Vancouver-based magazines the week before. He said Yellow Pages is driven to provide more content to users as it evolves into a digital company | Photo: Tyler Orton

Yellow Pages (TSX:Y) (YP) spent about a century pushing thick books filled with business names, addresses and phone numbers that would fill the space between ads.
And then the arrival of the Internet search engine shook its business model to the core.

“The book was mainly publishing raw data, so it’s not really content,” said YP president and CEO Julien Billot, who’s spent the past 18 months leading the company’s transition from a print-centric to digital business.

“The real transformation for us is shedding that.”

Billot was in Vancouver June 2 after Yellow Pages acquired Vancouver Magazine and Western Living the week prior. The company’s latest mobile app, YP Dine, launched in Vancouver earlier that day, and the CEO was using it to scroll through local restaurant and café listings in French while sitting in a Yaletown office.

He told Business in Vancouver the magazine acquisitions occurred after YP chief publishing officer Caroline Andrews, who worked at the publications’ former parent company, tipped him off.
“In the case of Vancouver Magazine and Western Living, it’s about content. Our mission for 100 years has been to connect on the neighbourhood-level consumers and small companies. And to do that you must provide the right content and the right relationship between users and SMEs [small to medium-sized enterprises]. And to do that you have to be very present locally.”

Billot added that the company’s brand has always resonated with 30- to 50-year-olds. But the digital transition facing most businesses – especially one known primarily for its print assets – means YP needs to reach out to those under 30.

He said new apps owned by Yellow Pages such as YP Shopwise, Canada 411 and Renters Guide are aimed at drawing in a younger demographic that might have gone through childhood without opening a phone book.

The company’s digital transformation has been moving swiftly since Billot took the helm in late 2013 when about 40% of YP’s revenue came from digital assets.

Billot said the goal is for digital assets to account for 80% of revenue by year’s end.

Meanwhile, a June 3 PwC report estimates by 2019, 88% of Canada’s entertainment and media revenue will come from traditional or non-digital assets. The global average is expected to be 80%.

“After a decade and more of digital disruption, during which the entertainment and media landscape has struggled constantly to keep pace with advancing consumer expectations, it’s increasingly evident that there is no significant divide between digital and traditional media in the eyes of consumers,” the report said.

But Billot said YP has a gap to fill when it comes to SMEs that lack web presence.

An October 2014 report from the Internet Association (IA) – an online advocacy group representing giants like eBay (Nasdaq: EBAY), Amazon (Nasdaq: AMZN) and Google (Nasdaq: GOOG) – found 59.9% of Canadian SMEs don’t have a website.

Billot said YP aims to help these SMEs build a digital presence through web page development, stronger search results and connecting small businesses to potential clients. That means attracting more digital users by developing a network of local editors to provide city-specific content on its apps.

“And that’s why we’re very different from people like Google,” Billot said. “They work based on machine; we try to work mainly based on human knowledge. And very local human knowledge.”

While delivering a keynote speech for the Vancouver Board of Trade June 2, Google Canada managing director Sam Sebastian also cited the same IA statistics detailing the low number of SMEs with a web presence.

“I don’t get that. You have to fix that,” he said. “We know that businesses that are digital leaders outperform their competitors in every industry.”

Since moving from Chicago to Toronto a year ago, Sebastian said the biggest cultural difference he’s experienced is that Canadians are often reluctant to get out of their comfort zones to embrace technological and business change.

“If you embrace change and you’re able to shoot for what you want,” he said, “then all this change and innovation and disruption can become your friend and provide you with incredible tools that you’ve never really had in your focus before.”

Getting that message across to SMEs comes down to reminding both clients and users about the same raison d’être YP had back when it was focused on print, according to the company’s senior vice-president of corporate affairs, François Ramsay.

“That’s being experts in neighbourhoods, experts in discovering local in a way that’s different from others,” he said, adding that YP has about 250,000 customers that meet with one of its 1,100 media sales reps at any given point during a year.

“I don’t know if there’s a bank in Canada that has 250,000 small-to-medium businesses [as clients].”

Despite SMEs’ reluctance to embrace digital, Billot said the same isn’t true for users.

A March comScore Canada report found Canadians spend an average of 36.3 hours a month using the Internet compared with 35.2 hours for Americans and 33 hours for Brits.

“B.C.’s a very important place because it’s much more digital than the rest of the country,” he said, noting the province represents about 15% of YP’s overall business (including print assets) but 30% of its digital-only business.



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