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.

Social Media Stats

Mashable lists a series of recent sources for statistics on social media:

1) The Society for New Communications Research’s “New Media, New Influencers & Implications for Public Relations” (.pdf).  They “set out to conduct an examination of how influence patterns are changing and how communications professionals are addressing those changes by adopting social media. ”

2) Universal McCann’s Social Media Research Wave 3 (.pdf) research report, whose goal is to “measure consumer usage, attitudes and interests in adopting social media platforms ”

3) The University of Massachusetts Dartmouth Center for Marketing Research recently released “Social Media in the Inc. 500: The First Longitudinal Study” (.pdf)

4) Comscore recently released statistics on worldwide usage of social networking sites

5) A Rapleaf study revealed gender and age data of social network users

What it means: for data-oriented people like myself, it’s always good to have a handy list of credible statistics resources.

Social Media: Don’t Assume Privacy!

(found on remarkk! blog )

Bell Canada Associate Director of Media Relations Jason Laszlo made a real boner move, boasting on Facebook of his ability to snow journalists with his network management bafflegab, referring to journalists as “lemmings” in a recent status update. Clearly a super-fun guy in real life (note colourful hat and armband tattoo), he further demonstrated the Bell Media Relations department’s apparent unfamiliarity with modern web tools by leaving his Facebook profile wide-open to the public to see. Oops. (…)

Jason Laszlo facebook profile

What it means: In another unfortunate situation where the assumption was that “what happens in Facebook (or other social networks) stays in Facebook”, Laszlo clearly assumed he was writing to his Facebook friends and not broadcasting to the world. Clearly, it was not the case and his message ended up reaching people outside his inner circle of friends. This should definitely be lesson for anyone working in the public eye (especially in public relations). After all, we are all becoming media through those new social media tools.

The Death of Public Relations as We Know It

Chris Anderson, editor-in-chief of Wired Magazine, created quite a stir this week by announcing he will be blocking the e-mail address of anyone who sends him any non-relevant releases and messages. He added oil to the fire by publishing on his blog the e-mail addresses of more than 100 people who did that in the last 30 days (he says he receives 300 e-mails a day). To make himself clearly understood, he added “So fair warning: I only want two kinds of email: those from people I know, and those from people who have taken the time to find out what I’m interested in and composed a note meant to appeal to that (I love those emails; indeed, that’s why my email address is public).”

David Meerman Scott, a well-known online marketing strategist and writer, says he gets “several hundred unsolicited press releases and PR pitches every week. Well over 99% of them are not targeted to me, instead they are sent to me because I am on various PR people’s lists because of this blog, because of my books, and because I am a contributing editor to EContent Magazine and have written for a bunch of other publications. I’m getting the identical piece of spam email as hundreds of other poor journalists.”. He adds “most PR people are spammers”


Flickr photo by Freezelight.

At the same time, Google pre-launches its OpenSocial initiative via influential bloggers who were involved in the project. New-York VC Fred Wilson says: “Google’s launch of open social is interesting. They pre-launched it in the blogs and are getting top bloggers who are also their partners, like Marc Andreessen, to do some of the work for them. It’s smart. Marc’s company Ning is one of the leading partners for open social and I think Ning will benefit greatly from it. So he’s going to promote it because of pure self interest. Which is fine, in fact it’s preferable in my book.”

What it means: you have in this blog post two extreme examples of what to do and what not to do PR-wise. Will Chris Anderson’s reaction create a snowball effect? This could be the beginning of something very ugly which would lead to a major reform of how online PR works. At the same time, this seems like a great business opportunity to build an online marketplace to properly match releases/news with appropriate editors/journalists/bloggers. Anyone interested?

Google wants to put Australians on the map

As a follow-up to my Google Maps Australia post, my friend Eric Baillargeon points me to a Sydney Morning Herald story describing a cool Australia Day marketing stunt to promote the launch of the new service:

“On Friday [January 26, 2007], an aircraft hired by Google will be doing a series of low-level swoops over parts of Sydney, photographing the ground and waters below. The three-seater plane, decked out in Google livery, will have special permission to fly at an altitude of 600m. Providing the photographs turn out to be good enough quality, the images will be integrated into Google Maps, the free online mapping service used by millions of people around the world.”

“Usually, people aren’t aware when they are caught in aerial photographs that later end up being used in Google Maps. This time however Google actually wants Sydneysiders to do whatever they can to make themselves visible. The company is encouraging people to wear something distinctive, hold up a sign (face-up), draw in the sand, or even arrange themselves into a “fun formation”.

“This is the first time we have tried this on any scale,” said Mr Rasmussen, one of the original developers of Google Maps, who is based in Sydney. “We have no idea whether it will work, but we thought it’d be fun to try.” A map with times of the flyover can be found at http://www.google.com.au/australiaday2007/ and will will be updated with any changes to the schedule on the morning of January 26.”

“The images, however, will take up to another six weeks to make it on to Google Maps. “It’s a bit of an experiment and if it’s a success, we’ll probably do it in other places [around the world],” Mr Rasmussen said, indicating that Google would work on organising similar flyovers in places like Paris on Bastille Day or over cities in the United States on Independence Day.”

What it means: what a great way to have consumers embrace your new service! They will be embedded in it!

Meta-Praized: YouTube, VirtualCity, Wikipedia, Peter Jackson, Fake User Profiles, Google Answers, Santa Monica Parking, Yahoo

Meta-Praized is a collection of links & stories we’ve dugg on Digg.com in the last 7 days. Feel free to add us as a friend: PraizedDotCom .

  • “Seeking Executive to Tame the Digital Future” in the New York Times
  • “What does ‘Web 2.0’ mean to the world of Public Relations?” in CMSWire.com
  • “Do Google and YouTube have ethical responsibility for their video services?” in ArsTechnica
  • “VirtualCity delivers the real thing” in the Globe & Mail
  • “Experts rate Wikipedia’s accuracy higher than non-experts” via Ars Technica
  • “To Web Fans, Peter Jackson Is the One True Director” in the New York Times
  • “Sex and Social Networking Sells: Fake User Profiles in Marketing Campaigns” in Read/WriteWeb
  • Google shuts down the Google Answers service via the Google blog
  • “Report: Pentagon investigates YouTube video of U.S. troops” via News.com
  • CBS attributes ratings boost to YouTube” via the Chicago Tribune
  • “A New Twist: Voting for News You Trust” in NewAssignment.net
  • “Real-Time map showing available parking spaces in Santa Monica” via the actual site
  • Yahoo! TV gets a redesign via TechCrunch