Is Yellow Page Advertising Necessary?

I look at a lot of Tax Returns and Profit and Loss Statements in preparing an opinion of value. When the top line revenue looks good, but the bottom line is clearly anemic I start looking for problems areas.

It's interesting when I compare similar businesses and I find one with a high telephone bill and another with a more reasonable bill. The difference often is in the fact that the telephone bill isn't just a telephone bill. It may contain a charge for advertising and the owner or bookkeeper didn't separate the charge since it was all on one statement.

It will come as no surprise that the use of printed yellow pages has declined in recent years, just as the use of printed white pages has declined.

So, is Yellow Page advertising necessary or is it an expense that can be reduced or cut?

First let me say that all advertising works. The challenge the business owner faces is determining what works and how well.

For years Business Brokers advertising their listings in the Sunday paper and Monday morning the phone range. Now few use newspapers. For our business the cost went up and the effectiveness went down.

Service businesses, plumbers, electricians, handymen, have traditionally benefited the most from yellow page advertising and many are still afraid to cut the strings.

So if you can't quit cold turkey put your advertising budget on a diet.

Traditionally the larger ads with more color run in the front of the category, so AAAAA Plumbers with a full page in full color is the first ad you see in the print edition. But that may actually have and adverse effect for two reasons. The first is that many people who still use the book start flipping pages from the back so they reach the smaller ads first. Ask your spouse to look up a number and see if that holds true. The second reason is that consumers often see the big ads and correctly assume they cost big bucks. They know who the customer is the one who really funds the advertising they figure the service provider's fees are too high if they spend that much on advertising. They then look at the smaller ads.

Consumers do use the on line yellow pages, but they also look at many other on line sources of information and they are smart enough to know which ones are paid and which ones are not.

Trimming the "phone" bill may not solve all your problems, but it's a good place to start.

Jon Hunt
jonhhunt@bellsouth.net