Speaking Sensis

Mobile phone apps – everyone is talking about them and everyone wants them.  Whether it be for playing games or finding a business, service or friend close by, people are jumping on the app band wagon and for good reason.

Apps, short for application software, add an increasing array of functions to mobile phones. At Sensis, our Yellow Pages® and White Pages® iPhone apps were some of the first on the Australian market, with the Yellow Pages® iPhone app being downloaded more than 300,000 times since its launch in August last year. The iPhone app has so far connected more than a quarter of a million people with businesses, and boosted Yellow Pages® Mobile usage by more than 50%.

And on the back of that success we have launched the Yellow Pages® Android app, which is now ready to be downloaded.   

To get the app on your Android phone, simply visit the Android Market and search for ‘Yellow Pages® Australia’ or ‘White Pages® Australia’ or follow these links from your Android phone:

• Yellow Pages® – market://details?id=au.com.sensis.mobile.android.yellow

• White Pages® – market://details?id=au.com.sensis.mobile.android.white

The free apps connect Android-enabled mobile phone users to all the helpful information that can be found at Yellow Pages® Mobile and White Pages® Mobile but enhanced with some features that leverage the enhanced capabilities of the Android platform like:

• Auto-location
  The GPS capability of Android devices allows you to search for businesses close to you. This means you don’t have to type in the location when you do a business search.

• Save to favourites and recent searches
  Create a list of favourite businesses within the app and include notes against listings i.e. “Café Grotto – great coffee, friendly service”. There’s also a list of your most recent searches.

• Auto-suggest categories
  When you start keying text for a business type search, suggestions are presented, meaning you don’t have to type the whole word if there is a match.

While the first Android devices were launched in Australia in early 2009, it will be another 12 months before they really take off.  At the recent Mobile World Congress in Barcelona Richard Fink, Director Device Management & Operations at Telstra, announced  that the first Android handset, the HTC Desire, will be due in next month. 

“We have decided to include Android smartphones on our device roadmap now because there is real momentum building behind the platform. There is a growing range of excellent handsets to choose from, real maturity in the operating system and an ecosystem of around 20,000 apps (growing rapidly) — which gives customers unprecedented freedom to decide how their mobiles look and what they do.”

It’s a strange irony, but Sensis’ long history in print products and the strong position of our business can sometimes work against us. Especially when the media is looking for headlines.

Yesterday, a story by Michael Evans in The Age and Sydney Morning Herald reported the challenges he believes Sensis and Yellow Pages® is facing. He claimed we are “battling on several fronts” due to our half-year financial results showing our first-ever revenue decline, the days of print directories being numbered and that a “rampant gorilla” named Google is set to take all before it in the world of online advertising.

Without a deep understanding of the business, the article focused heavily on our print products and shed little light on the value of our multi-channel network.

On a positive note, it did mention the global financial crisis as one factor influencing our half-year financial result. However it stopped well short of explaining our revenue result was achieved in the peak of the global financial crisis, a time when other advertising businesses were experiencing declines as high as 20%.

Our result in the first-half also saw us increase our overall share of the Australian advertising market. This is an achievement that shows in tough times, advertisers stay with us as we continue to deliver them strong value and return on investment.
 
Through its focus on Yellow Pages® as just a print business, the article glosses over the key role Yellow Pages® has played in Sensis’ evolution as the largest locally-owned online advertising business in Australia. This digital business provides customers with the perfect complement to our successful print directories, as well as exciting opportunities for future growth.

Yellow Pages® print products continue to be a core part of our business and revenue base. But on top of this, we’re creating further value for customers through new and exciting print, online and mobile bundles to extend their reach into the market. These are in addition to initiatives that are already driving extra value such as Yellow Pages® Mobile on iPhone, our SEO program for Yellow Pages® Online content and Yellow Pages® listings being available on Google Mapsⁱ and Bing Maps to name a few.

This strategy is driving value as well as diversifying our revenue base. In three years, the proportion of Sensis’ total revenue from digital products has grown from 18% in 1H07 to almost 33% in 1H10. Digital products are now an integral part our overall network and rather than pose a threat to our print business, they are providing strong growth opportunities.

For example, usage of Yellow Pages® Mobile grew by 89% in the December 2009 quarter compared to the previous year. Similarly, our agreement to have Yellow Pages® listings available on Google Maps is another way we are delivering more value via digital media.

The value Sensis and Yellow Pages® are providing customers and the opportunities for future growth are best highlighted by the 4.6 million people that let their fingers do the walking more than 13 million times a week on averageⁱⁱ. Only now, it’s not just in print, but across a powerful combination of print, online and mobile products.

• ⁱGoogle maps is a trade mark of Google Inc.

• ⁱⁱRoy Morgan Single Source Australia, 14 years and above, last 7 day average, July 2008-June 2009.

Do you know of a small to medium business that consistently goes the extra distance to provide a better service to its customers? Have you thought about ways to help it get the recognition it deserves? Would you nominate it for a business award?

Well, if you have answered “yes” to all three questions, you now you have a chance to do your bit. The 2010 Telstra Business Awards are now open and your favourite small to medium business has a chance to share in the fantastic opportunities that have been benefitting Australian businesses for the past 18 years. And for the first time this year, all entrants have an opportunity to receive a business health check to help them plan for tomorrow, encouraging them to keep up the good work.

I’ll be coordinating our support of the Sensis Social Responsibility award category. While sustainability is at the core of our Sensis’ business strategy, we recognise that embracing sustainability can be a bit scary for small and medium sized businesses. So, this is an opportunity for us to recognsie and support those businesses we believe are giving it a crack and to celebrate their efforts. And through their success, we hope to encourage more businesses to do the same.

The Telstra Business Awards give small to medium businesses amazing networking

opportunities, media exposure and business development prospects.

Every year, the awards get me thinking about the small and medium business owners I know and who I’d like to nominate. There’s a fantastic beautician I go to in Prahran, but then there’s also that amazing breakfast place on Gertrude St, Collingwood. And I can’t forget about my hairdresser in Fitzroy. The one thing they all have in common is that the owners and their teams are all putting their heart and soul into making their businesses the very best they can be.

While a lot of large businesses have their own internal rewards and recognition programs in place, who is there to pat the small and medium business owner on the back and say, “Well done. You’re doing it right. Keep up the good work”?

The Telstra Business Awards give them that and also provide them with amazing networking opportunities, media exposure and business development prospects – not to mention the serious prizes getting around.

So, a final question for you. Who are you going to nominate?

To watch sport on television is a sacred Australian past time. The relationship between sport and television is symbiotic, forged the moment Ron Clarke lit the cauldron of the 1956 Olympic Games at Melbourne’s very own MCG. Mainstream professional television had only been launched weeks before and sport has been the cornerstone of content ever since.

But a new player in the sport broadcasting arena stands to break this marriage that is quickly nearing its emerald anniversary.

While argument rages about whether pay TV should be able to bid for sports traditionally reserved for free-to-air audiences (a decision is due at the end of the year) the internet is emerging as the elephant in the room. The internet has grown from the broadcasting of live scores to parallel broadcasting of sporting events. Telstra currently holds the AFL mobile and internet rights. While no live broadcast is available, you can watch full replays and highlights soon after the game has finished.
While this may not seem to be much of a threat yet, it will only take a cashed up internet giant to decide it wants to host major sporting events. It wouldn’t take much for a cashed up internet giant, perhaps Google, to waltz into International Olympic Committee HQ in Switzerland and claim the worldwide rights to televise the 2016 Olympic Games in Rio.

Sound crazy? Not when Google has signalled its desire to head down a sports broadcasting path. In January this year it announced it was going compete against other media organisations with their broadcast of the Indian Premier League Twenty20 for the next two years. Google will provide live and exclusive coverage through its YouTube website to all 60 matches this year’s competition. And it’s tipped to provide mobile coverage as well. A check of the site shows that before the event has begun, nearly 10,000 subscribers are set to fly once the tournament begins.
For Google, it’s all about advertising. Through its relationship with users Google knows what they watch, what they share, what they buy and where they live. 
This provides advertisers with more targeting opportunities than TV broadcasting and the more targeted the advertising, the more likely that ads will be looked at and clicked. And it’s that small click that drives the revenue. The IPL deal suggests that Google is taking YouTube from a video site that houses people’s videos to a broadcast medium not too different from television.
So with the next Olympics TV rights expected to exceed $2 billion, what is to stop Google stumping up the worldwide dollars. It has the internet distribution so it will still be free to watch and it is increasing its mobile phone reach. By 2016, who knows what else they might own. But who wants to watch the Olympic Games on a PC or mobile screen I hear you say? Well Google might have already thought that one through. Only this week it has been rumoured to be releasing a set top box that can tap into TV content and internet content and bring it together in your lounge room on your TV.

This all proves that content is king and while we argue over whether AFL games should be on Pay TV or FTA, traditional broadcasters should be paying more attention to the multi-coloured elephant in the room.

A glittering array of digerati gathered last week to celebrate the Australian Interactive Media Industry Association (AIMIA) Awards. In what was a great achievement for the Yellow Pages mobile team, the Yellow Pages® iPhone app was nominated as a finalist in the Best Mobile Product or Service Award. Known affectionately as “The Amys” by the industry, the AIMIA Awards showcase work undertaken by Australia’s Interactive Media and Digital Content sectors across a broad range of categories and winning an Amy is a great accolade for any business.

Being a finalist allowed members of the Yellow Pages® team to strut the red carpet so there was no holding back on the fashion – especially with industry paparazzi on the loose.

Fashions on the field (L to R): Bruce Lund, Sally Davies, Julian Wong, Evan Ravensdale, James Simonetta, Alex Johnston and Michelle Sherwood.

But not even the comic styling of event host Mikey Robbins could settle our nerves as we watched and waited for our category to be announced. The Yellow Pages® app is an amazing product and we knew we were in with a real chance. And while the award went to 3 Mobile for its content portal, our team has a lot about which to be proud.  With more than 300,000 downloads since its launch in August last year, the iPhone app has been phenomenally successful. It has already connected more than a quarter of a million people with businesses, and boosted Yellow Pages® Mobile usage by more than 50%.

In fact, it took just two years for overall mobile usage to reach levels that online accomplished in five. That’s no mean feat and the team should be roundly congratulated for their hard work.

Undaunted, the team will be releasing more features and more useful functions in the coming months and we’re pretty sure that we’ll be front and centre at The Amys next year.

In business it is important to look forward, but it is also important to stop sometimes and look back.

One year ago, the Sensis® Business Index recorded the lowest level of confidence among Australia’s small and medium businesses since the survey began in 1993.  Confidence at height of the downturn fell to 12 per cent net balance in the first quarter to 2009.  This quarter, one year on, we measured confidence at 49 per cent.

And you can see from the chart it has been a pretty volatile couple of years in the business world.  And while confidence has improved, it suffered in the past quarter – such is the complexity of economic recovery. 

When global economies headed downhill, governments went into action with stimulus packages to keep things ticking over. The prescription that governments and central banks followed worked to a large extent.

While I could make a comment here about roof insulation, it is probably best to just say that the Australian economy made it through without a recession, technical or otherwise. Let’s just leave it at that…

The interesting thing is that the prescription for the GFC was pretty well known, but what was not well-known was what to do “next”.  As an economy we are now at this “next” stage and Australia’s small and medium businesses are saying that they are still facing problems of economic downturn, such as falling sales and lower demand.

But at the same time they are having to concurrently deal with the “problems” of growth, such as trying to find staff for their businesses and trying to get finance to grow their businesses.

Managing the recovery is as complex, if not more so, than managing the downturn. But it is still important to look back to where we were a year ago and what we have achieved since then.

And after you look back, it is also important to remember to start looking forward again. I’d be keen to hear about what you see on the horizon…

When I hear that a company has a digital strategy, I say – “so what; I want to know the details of the plan and when it will deliver something that makes a difference to people”. 

It is reassuring to know that right now at Sensis people are busy delivering the digital strategy to make a positive difference to advertisers and the people who use our products and services.  Of course there are some big plans, and exciting projects as part of this, but at the grassroots its also about continuing things such as improving the way we do the basics – like improving the online user experience.  This is something we work on continually using consumer feedback and historical site data.

A few of the latest improvements for Yellow Pages® and White Pages® online sites, set to go live in March include:

• the removal of the radio buttons used to select a business type search or business name search. Instead, yellowpages.com.au will automatically determine, based on the search term, whether the user was looking for a type of business, or a specific business, and handle the search accordingly. For example, a user searching for bunnings is obviously looking for a specific business. On the other hand, a user searching for used cars is clearly looking for a type of business. We’re making this change because we know that users don’t always notice the radio buttons, and consequently accidentally run the wrong type of search, leading to poor results;
• Auto-suggest functionality is being enhanced, with business names now also being suggested;
• Update of the business profile page for Yellow Pages® advertisers. We have updated the look and feel and added new video and photo tabs for advertisers who choose this type of ad. Plus, now when you print business profile pages you will get a cleaner and simpler result; and
• Extension of “my list” tool on White Pages® online from business search to residential.  My lists allows users to “select” advertisers contact details and create personalised lists which can be shared via email with others. 

There is more coming soon in the development pipeline including work on widgets, linking with facebook and twitter, plug-ins, brand name search, geocoding and more.  Stay tuned.

Hi. I hope you all had a great Christmas break. It seems like such a long time ago now, but I really appreciated the chance to get away and recharge the batteries with my family. Of course, we’re all well and truly back in full swing now and, as always, there’s a lot happening.

December half year financial results
On 11 February, Sensis’ financials for the six months to December (1H10) were reported as part of Telstra’s results announcement. You may have already seen the headlines. When adjusted for the transfer of Trading Post to Telstra Media, the sale of Universal Publishers and the rising Australian dollar, earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 4.8% on flat (-0.1%) revenue.

This has been a challenging time for the advertising market. Our print directories revenue, for example, was earned at a time when the main media market (including online) declined by 8.5% and print advertising (including newspapers, magazines etc) declined by 12.5%ⁱ.

Sensis has delivered a good result in this uniquely challenged market. Underlying these results are two achievements I believe are worth highlighting. They say a lot about the progress Sensis has made in recent times:

• the growth of digital media and the evolution of our revenue mix; and
• the support we continue to receive from customers: the buyers and sellers who rely on our services.

Changing revenue mix: In recent years, we’ve broadened our horizons by expanding into both digital media and new markets, like China. In 1H07, 18% of revenue came from digital media. In 1H10 (just three years later) digital revenue has doubled to more than $300m and is now more than 30% of total revenue.

This is exciting progress. Our focus on diversity has dramatically improved the services we offer our customers and the underlying strength of our business for investors. As a result, Sensis today is the largest Australian-owned digital advertising business: a position further strengthened by our exciting investments in China, which now has the largest online audience in the worldⁱⁱ.

Continued strong support from our customers: A particularly pleasing aspect of this result is the enduring vote of confidence from our customers. Advertiser numbers remained largely intact despite the downturn. At the same time, advertiser satisfaction remained high. Advertisers gave the performance of our White Pages® and Yellow Pages® sales consultants a rating of more than 90% positiveⁱⁱⁱ, which is a tremendous ‘thumbs up’ for the work they’re doing. Finally, on the usage front, we continue to meet the needs of millions of potential buyers. The potential audience reach for Yellow Pages® advertisers grew to 11.5m unique users a month^iv, mobile usage grew by about 70%^v and MediaSmart online usage grew by 7.4%^vi.

Driving customer value with a commitment to innovation
Critical to achieving all of these objectives is our commitment to continually improve the quality of our services for both buyers and sellers. In just two months since my last update, we’ve been able to:

• launch Yellow Pages® enhanced business search in Whereis.com. Now, when you search on Whereis® for the address of a Yellow Pages® advertiser, you’ll see the business details of the advertiser pop up. A simpler experience for buyers and more potential returns for advertisers. In just one month, this new service has resulted in almost half a million new views of Yellow Pages® advertiser listings; and,
• launch the Yellow Pages® In the Car Book in a number of new markets following successful trials in Melbourne and Sydney. We’ve already seen ‘In the Car’ usage double year-on-year and there should be more growth to come as the books are distributed in these new markets;
• begin trials of a new ‘midi’ Yellow Pages® Book in Sydney. This smaller sized book is designed to be easier and more appealing for apartment owners living in high density areas;
• re-launch www.yellowadvertising.com.au – the Yellow Pages® advertiser site. This site gives advertisers ready access to the information they need to make the best advertising decision for them.

We’ve also seen positive activity in Location & Navigation. The Whereis® Navigator GPS service for mobile phones is growing rapidly and had a record month for subscriptions in December. There are also some early signs of a potential turnaround in the sat nav sector after a difficult 18 months or so.

And in MediaSmart, we’re working on phase 2 of our online targeting capability. When launched, advertisers will have the ability to target not just on the basis of user demographics but also online browsing behaviour (using purchase life cycle, life events and interest triggers across specific site categories, such as auto or small business). We’re also working to extend these capabilities to mobile. Ultimately, this will provide digital advertisers with the ability to deliver highly targeted cross platform advertising.

Behind the scenes, we’ve also switched Yellow Pages® over to the new iGen system. This is our largest ever technology innovation program and, after a few nervous weeks, the transition is now starting to show meaningful progress.

Its common knowledge major systems redevelopment projects are often difficult but, I must say, that’s pretty cold comfort when you’re going through one. While the program has been mostly successful, we are disappointed the upgrade didn’t go exactly to plan and we’re very conscious of the impact it has had in areas such as customer care levels.

Nevertheless, I’m pleased to say the biggest system challenges seem to be behind us and iGen is now stable and operating effectively. We have dedicated teams working through the backlog of change requests and service orders to bring us back to our usually high standards of customer service. And I’m also pleased to see our latest regional books – the first produced using iGen – are now being distributed.

Moving forward, we can look forward to delivering real customer benefits from iGen. These improvements will impact areas such as customer care, speed to market, search capabilities, product integration and content management – among many other capabilities.

Print and online directories certified carbon neutral
Recently, in a world’s first for a major directories company, we announced our print and online directories have been certified carbon neutral through the Australian Government’s Greenhouse Friendly™ program. We have committed to offset the carbon emissions of our directories through Greenhouse Friendly™ accredited providers and projects. At the same time, we have committed to reducing our operational greenhouse gas footprint by 5% year on year to 2012.

We also recently celebrated ten years of directory kerb-side recycling. This program has been an immense success. Recycling rates are up from 4% in 1999 to 96% recycled or re-used today. As a result, more than 175m directories have been recycled since 2000.
I’m incredibly proud of these achievements. Together, these two initiatives demonstrate not only our commitment to sustainability but our success in turning that commitment into positive action.

Federal Court copyright decision
Recently, a single judge (Justice Gordon) of the Federal Court found there was no copyright in the compilation of factual information in our White Pages® and Yellow Pages® print directories. ‘Factual information’ in this case refers to the names, numbers and addresses contained in the directories but, importantly, does not affect copyright in display ads. Not only is this outcome disappointing for Sensis and Telstra, it has far reaching implications for any business that invests in the development of compilations, such as customer lists, postcodes, TV guides, anthologies, racing information, and marketing lists.

We have been granted leave to appeal the Federal Court’s decision and are likely to do so. In the meantime, there is a critical assurance I want to make – particularly to our customers: our success as a business is not solely reliant on copyright protection.

For more than a decade now, Sensis has been operating in a competitive market in both print and online. In print, competitors have been copying our data for years in certain markets. And, in online, we’ve been operating in the same market as some of the world’s largest online businesses for the same period of time.

Despite this competition and the negative comments you occasionally read in the media, our business and, most importantly, the value we offer both buyers and sellers are stronger than ever.

It’s business as usual as far as we’re concerned. Continuing to build the returns for our customers, investors and the community is what matters.

All the best,

Bruce Akhurst

ⁱ CEASA, Main Media Report. June 2009. Note: 1H10 print directories results backdated six months to align sales cycles with the rest of the media market.
ⁱⁱ Clickz.com Web Worldwide http://www.clickz.com/stats/web_worldwide
ⁱⁱⁱ TNS, Sensis KPI Report, December 2009. Average monthly satisfaction score – July 2009 to December 2009
^iv Roy Morgan, Single Source Australia. September quarter 2009. Base: Australians14+
^v Omniture, December quarter 2009 compared to 2008
^vi Roy Morgan, Single Source Australia. September quarter 2009. Base: Australians14+