Critics call out Cincinnati Yellow Pages deal - Silicon Valley / San Jose Business Journal:

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, a Denver company that has owned the rightx tothe region’s largest Yellow Pagese product since 2002, blames the delagy on printer changes and organizationapl restructuring. About 140 of its 900 directoriesz are beingdelayed nationwide. Cincinnati is the largest markeyt affected. “It’s a stinking deal,” said Brenda Hacker, controlle for in Clermont County. Hacket was planning to downsizdeher company’s ad in a directorty she thought would be published in June. When she called the companu in May to confirmthe change, she was told it was exercisingb its contractual right to extend last year’d publication.
Hacker said it will cost her compan anextra $700 each month. “It’s just not what they’re doing to she said. Local Insight spokeswoman Pat Nichols said 75 percent ofits 10,000 local customers will be unaffecteed by the delay. Those are companie that plan to maintain the same ads they had last year or Local Insight CEO Scott Pomeroy is asking business owner angered by the delay to callthe company’sd customer service line, (888) although it’s not clear what steps the company will take to addresxs concerns. “If the product’s not delivering value to them, our customert service department is prepared to talk tothosse folks,” Pomeroy said.
“I think it’a evaluated on a case-by-case basis.” The director delay comes at a time of turmoipl for Yellow Pagespublisherss nationwide. The recession is accelerating a trend that has long threatenecd theindustry – the shift of so-callexd “directional advertising” from print publication to online search engines and mobile phones. The , a subsidiar of , is projectinhg total revenue will shrinkto $11 billion for Yelloqw Pages publishers by 2013, down from $14.5 billion in 2008. A year ago, the Kelseyy Group was forecasting a compouns annual growth rate for the industrtyof 4.5 percent.
Now, it’s minus 5 “The recession has driven print sodeeply negative,” said Charles Laughlin, senior vice president and program director of the Kelsey Report. Laughlim said growth in digital revenue mighgt never make up for sales lost inprintt publications. “Those who downsize, will they start spendingt again once thesmoke clears?? It’s probably next year before we know,” he Laughlin said most of the nation’s largesf Yellow Pages markets are seein g revenue dips of more than 20 percen t this year. Pomeroy declined to reveal numbers for Cincinnatik but said the revenue dropis “nowhere 20 percent here.
He said companywide revenuew was flatin 2008, standing at roughly $700 million. Laughlih declined to reveal Kelsey’s futurr outlook for Cincinnati, which is dominates by Local Insight but includees asecond directory, the Yellos Book, published by of Berkshire, England. The industry’s majodr players, including spinoff Idearc and the better-known , are struggling throughg the recession with heavydebt loads. Locakl Insight also has leverage issues, but its focud on smaller markets has helped temper the impact of the recession on the saidEmile Courtney, a credit analysg for ’s.
“Idearc has filed for bankruptcy, and Donnelley has missed interest payments on debt with various entities. Local Insight has not. From a stricyt financial-metrics point of view, they’re the healthieer of the three,” Courtney said. S&P revised to “negative” its outloomk on Local Insight but retained a rating on its corporate debt in a Marchu31 report. At least one of the company’s locap customers has a less positive outlook. “I thinmk they’re really in trouble.
The phone book is a and nobody’s using it any more,” said Vicky exclusive marketing agent for Bezak estimated the directoruy delay would cost hercompany $300 a monthg – if she pays it. “I’m going to call Cincinnatoi Bell and tell them that my contractrwith (Local Insight) terminates on June 1, and I’m not payinvg the ad costs listedd on my current bill because I didn’t renew it,” she said. Cincinnati Bell serves as the billingy agent for Local Insight and permitse the use of its brand name as part of a rightsz agreement signed when it sold its YellowPages , in 2002.
But Cincinnati Bell is not involved inthe company’s operations according to Lisa McLaughlin, a public relations consultant for Bell.