David Swanson, Dex One's CEO, to Retire

Just received this release from Dex One announcing the retirement of David Swanson, their CEO.

Dex One Corporation (NYSE: DEXO), a leading provider of marketing solutions for local businesses, today announced that David C. Swanson, the company’s chairman and CEO, will retire effective May 28, 2010. The company’s Board of Directors will be initiating a search for a new chief executive officer to succeed Swanson.

via Dex One Corporation.

What it means: This is definitely an important moment for Dex One in terms of defining their future. I met Dave Swanson last year and had been impressed with his thoughts and vision. The last few years have been a real roller-coaster for the organization with RHD buying Dex Media in 2005 (has it been 5 years already?), their acquisition of Business.com in 2007, a superb ride on the stock market and the fall to chapter 11 protection last year. Their exit from bankruptcy protection in February 2010 can be seen as the beginning of a new chapter (no pun intended) and Swanson’s swan song (pun intended). I suspect the company is now ready to embrace the future and the necessary changes required for success. The type of candidates they approach and the person they eventually select will largely influence the future of the company, probably the same way that Jean-Pierre Rémy seems to be imprinting a new vision/direction for PagesJaunes in France. All industry eyes will be watching that next move.

Dave Swanson: "Facebook and Twitter are Both an Opportunity and a Threat to Directory Publishers"

This is a post about the Kelsey Group’s DMS ’09 conference which happened last week in Orlando.

Dave Swanson Photo

Day two of the DMS ’09 conference saw a brilliant keynote from Dave Swanson, Chairman and CEO of R.H. Donnelley (RHD). After hearing sobering thoughts from European Yellow Pages leaders at the EADP conference in May (see The Wake-Up Call: “Unless We Change, on the Long Run, We Are Doomed to Disappear” (EADP 2009)), I was really looking forward Swanson’s keynote given the situation RHD found itself in (they filed for Chapter 11 protection in May) after having an amazing stock market ride in the last few years. the Kelsey Group “wanted someone who has had his butt kicked” for this keynote, someone who could explain what happened and what’s ahead for the industry and he didn’t disappoint.

Here’s what happened according to Dave Swanson:

  • The economy
    • “It changed everything for everybody. If you look at the timing of ad sale declines, it compares exactly with the economic contraction. If you index Google’s financial results with RHD’s, you realize they have suffered as well. We’ve seen broad-based sales compression. We had enjoyed the longest growth period in history, but it created unsustainable bubbles: housing bubble, advertising bubble, credit bubble (with mergers & acquisitions and leverage buyouts). It was an unsustainable situation because we needed to refinance regularly. There was no money left after the financial bubble burst. When I’m asked “Dave, do you regret this strategy?”  I answer, “no, absolutely not. RHD might not exist today.” “
  • Secular changes
    • “Print competition is intense. We keep pointing out the shortcomings of each other’s products. Other local media companies (i.e. newspapers) pitch “against” Yellow Pages also. Media Fragmentation didn’t help as well. Finally, the media trumpeted “no one uses the Yellow Pages anymore” and we became an “environmental hazard” for a segment of the population. We have been very good at shooting ourselves in the foot.”
  • Execution
    • New products did not deliver and had a high rate of churn.

Where are we?

  • “I hope the freefall from the economy has stopped but I think that we’re a long way to go before “main street” joins the current Wall street rally”
  • ” We need multi-platform solutions, more creative pricing, more transparency”
  • “Competitive environment is intense. We could see a shake-out. For RHD, the worst is behind us. Financial house must be in order.”
  • “We need to challenge the premise of our business”. He gave as example: “do we need separate Internet Yellow Pages platforms and ventured to answer “I don’t think so”.
  • “We will never dominate consumer usage as we did in the past.”
  • “We need to become have a service-centric model vs. product-centric model.” RHD’s objective is to be the number one provider of directional services in the eyes of the SMBs in the market they serve. Yellow Pages publishers are provisioning more keywords on search engines with small businesses than anyone else. Because of the channel, this has been a natural extension of their existing product.
  • “Execution hasn’t been very good, but we’re getting better and we’ll dominate”
  • “Publishers have to look at micro-strategy, geo-vertical opportunities. It’s not one large homogeneous search business.”

Swanson observed it would be very easy to be pessimistic but his philosophy is that when things are going very good, something very bad is about to happen and vice-versa. The next several years will be all about climbing out of the hole but “it’s going to be a hell of lot more fun than the last two years”.

Following his keynote, I sat down with Dave Swanson for an exclusive interview.

On print innovation

I asked Swanson if he thought there was innovation left in the print product, what he thought a print product would look like in 5 years. He said he thought the print book really works in smaller markets and that he didn’t see much change needed there. But he confirmed he thought the format wasn’t right for urban centers. He suggested limiting geography (smaller scopes), having more relevant information in the books (possibly a subset of headings instead of all of them) and more specialty products. But he also added Yellow Pages were not supposed to be glamorous. They have to be efficient.

On online innovation: verticalization & micro-strategy

I then asked RHD’s CEO where he thought DexKnows.com, their main online property, was going. He said he was extremely happy to have Sean Greene heading their RHD Interactive division (I interviewed Sean a few months ago), bridging print and online culture. He mentioned DexKnows’ future lies in two directions: verticalization and Micro (which I would call hyperlocal)

Verticalization is the improvement of high-potential verticals within Dexknows.com. It means depth of content, aggregate categories/headings and a combination of expert and user content. He gave the example of “wedding” as a meta-category, an interesting vertical.

Micro is recreating a community, a subdivision, a neighborhood within Dexknows.com (or maybe more “local” brands. He wasnt’ allergic to trying other online brands for this initiative). User recommendations would play a big role there. When asked about aggregating hyperlocal information that’s not directly merchant-related (classifieds, neighborhood information, municipal government info, etc.), he remarked that a lot of community information already appears in the print Yellow Pages and said there’s no reason why it shouldn’t appear online.

On social media

Swanson acknowledged that social media has the potential to be a big disruptor in local search (which made me very happy as I’ve been saying that for a couple of years). He called social media “word of mouth on steroid”. He confirmed that Facebook and Twitter are both an opportunity and a threat to directory publishers.

On combating the negative industry press

RHD’s CEO wasn’t too optimistic about industry-wide efforts to combat negative press. He suggested we change the way directory publishers market themselves and start talking to SMBs more to improve their image (instead of doing consumer advertising to garner usage).

What it means: perfect tone for the Swanson’s keynote. Things are not going as well as they used to in the Yellow Pages industry and it doesn’t serve any purpose to hide it. “We will never dominate consumer usage as we did in the past” is most realistic statement I’ve heard in industry recently. At the same time, the industry has tremendous assets it can leverage starting with the direct relationship publishers have with small advertisers. Very happy that RHD is looking at improving the print product in large urban areas. I believe there’s a lot of leg left in a print product that’s tailored to an urban consumer. Ecstatic that Swanson is talking seriously about social media. I sometimes felt like I was preaching in the desert in the last two years… We’ll have to follow RHD closely as they come out of Chapter 11 in the next few months.

In Orlando Next Week For The Kelsey Group DMS '09 Conference

I will be in Orlando next week for the Kelsey Group DMS ’09 conference. I haven’t missed many of those great events over the years and I’m looking forward seeing my industry colleagues in person.

Here are the presentations/panels I don’t want to miss:

Tuesday Sept. 22, 2009

  • “Moving Multiproduct Selling Beyond Bundles”. The interesting challenge directory publishers face today is to transform their sales organization into one that’s able to sell online advertising-only, not just print/online bundles. There’s also the new real-time Web which will create opportunities to launch time-sensitive offers and coupons, requiring multiple touch points during the year. That’s something directory publishers need to improve. See this conversation between Michael Taylor and myself on Linkedin (you need to be a member of the Kelsey Group Linkedin group to see it)
  • Kelsey’s User View and Local Commerce Monitor. Always interesting data points on users and advertisers.

Wednesday Sept 23, 2009:

  • The keynote from David Swanson, Chairman and CEO, R.H. Donnelley. As RHD prepares to exit bankruptcy protection, it’s going to be interesting to see how RHD is expecting to reinvent itself.
  • “The Global Yellow Pages Leadership Forum: Answers to the Tough Questions”. This should be the highlight of the three-day conference. Six global industry leaders will discuss the opportunities and challenges of the local industry. I wonder who will replace John Kannapell from AOL who was just let go.
  • “Mobile Search & Yellow Pages: The Business Model”. Four senior mobile managers from directory publishers talk about the importance of mobile, their strategy, and the business model. Curious to ask them about their “big ideas” around mobile.
  • The second keynote of the day, David Krantz, President & CEO, AT&T Interactive.

Thursday Sept 24, 2009

  • The keynote from Donat Rétif, CEO, Truvo. I saw him speak at the EADP conference back in May but given that Truvo wants to be innovative in the directory space, it’s going to be interesting to get an update from them.
  • “Print Yellow Pages 2013: Critical Changes to the Core Product”. Very curious to see if we will finally hear about real print innovation.

The conference is held at the [praized subtype=”small” pid=”79b0fad769b11f4b8998b682a0374edd7f” type=”badge” dynamic=”true”]. If you’d like connect in Orlando, send me an e-mail sprovencher AT praizedmedia.com

In Orlando Next Week For The Kelsey Group DMS '09 Conference

I will be in Orlando next week for the Kelsey Group DMS ’09 conference. I haven’t missed many of those great events over the years and I’m looking forward seeing my industry colleagues in person.

Here are the presentations/panels I don’t want to miss:

Tuesday Sept. 22, 2009

  • “Moving Multiproduct Selling Beyond Bundles”. The interesting challenge directory publishers face today is to transform their sales organization into one that’s able to sell online advertising-only, not just print/online bundles. There’s also the new real-time Web which will create opportunities to launch time-sensitive offers and coupons, requiring multiple touch points during the year. That’s something directory publishers need to improve. See this conversation between Michael Taylor and myself on Linkedin (you need to be a member of the Kelsey Group Linkedin group to see it)
  • Kelsey’s User View and Local Commerce Monitor. Always interesting data points on users and advertisers.

Wednesday Sept 23, 2009:

  • The keynote from David Swanson, Chairman and CEO, R.H. Donnelley. As RHD prepares to exit bankruptcy protection, it’s going to be interesting to see how RHD is expecting to reinvent itself.
  • “The Global Yellow Pages Leadership Forum: Answers to the Tough Questions”. This should be the highlight of the three-day conference. Six global industry leaders will discuss the opportunities and challenges of the local industry. I wonder who will replace John Kannapell from AOL who was just let go.
  • “Mobile Search & Yellow Pages: The Business Model”. Four senior mobile managers from directory publishers talk about the importance of mobile, their strategy, and the business model. Curious to ask them about their “big ideas” around mobile.
  • The second keynote of the day, David Krantz, President & CEO, AT&T Interactive.

Thursday Sept 24, 2009

  • The keynote from Donat Rétif, CEO, Truvo. I saw him speak at the EADP conference back in May but given that Truvo wants to be innovative in the directory space, it’s going to be interesting to get an update from them.
  • “Print Yellow Pages 2013: Critical Changes to the Core Product”. Very curious to see if we will finally hear about real print innovation.

The conference is held at the [praized subtype=”small” pid=”79b0fad769b11f4b8998b682a0374edd7f” type=”badge” dynamic=”true”]. If you’d like connect in Orlando, send me an e-mail sprovencher AT praizedmedia.com

Approaching a Perfect Storm in the Print Directory Space?

As the stock market keeps punishing directory publishers’ stock worldwide, we’re starting to see more articles about “how no one uses the print Yellow Pages” anymore (see Boston.com, CNBC, or WickedLocal.com). People in the industry know it’s not true, the Yellow Pages Association (and individual publishers as well) have data to back it up but I fear we’re letting public opinion run loose with that preconceived notion.

The whole industry needs to work on this. I’m afraid we’re getting close to a perfect storm where the stock value drop is associated with usage drop permanently. As I suggested in the Kelsey Group blog yesterday, “One way to re-join the conversation would be for directory publishers to start blogging. They all have very smart CEOs and VPs, who usually have a lot to say, but we only communicate behind closed doors or in industry conferences. It’s time for the industry to get back its share of voice and I think it would help to address the media bashing that’s currently happening.”

The good news is that people are reacting. Dave Swanson, CEO of R.H. Donnelley Corp. appeared on CNBC’s Fast Money to counter the argument that “Yellow Pages are dead”. He did a great job. We need more of that.

Dave Swanson RHD CNBC Yellow Pages Are Not Dead

(click here to listen to his interview)