Speaking Sensis

I’d like to officially welcome Yelp to Australia today, a global leader in local ratings and reviews. I encourage everyone to visit www.yelp.com.au and share their experiences of local businesses by posting ratings and reviews.

Why rate and review? Aside from the fact that it’s the fun and easy way to talk about great (and not so great) local businesses, it’s sites like Yelp that are playing a big part in how we Aussies make purchasing decisions these days.

According to the Sensis® Social Media Report, social networkers read an average of six reviews before making a buying decision. So rather than waiting for a review of a business to be published online or in the local paper and then deciding whether or not to give the business a go, we are getting on the front foot and seeking these reviews out for ourselves. Yelp.com.au makes this very easy. 

Yelp first started in San Francisco in 2004 and today’s launch in Australia marks the 13th country it has opened its online doors in. In Q3 2011 the online ratings and reviews company received an average of 61 million visitors a month (up 63 per cent from the same time last year), has generated 22 million reviews on its global network as of September 2011 (an increase of 66 per cent over the same time in 2010) and saw an average of five million unique views a month on its mobile app. With results like these, it’s evident that ratings and reviews are becoming an increasingly important component of consumers’ pre-purchase behaviour.

While I’m personally excited about Yelp’s launch in Australia today, it’s also a big coup for Sensis®’ Yellow Pages®, after announcing our ground-breaking partnership with Yelp back in July. 

Yellow Pages® local business listing data has been integrated into Yelp.com.au (including mobile site and apps), which means our Yellow Pages® advertisers will be able to be found by more potential customers. And in a couple of weeks, Yelp Reviews and Ratings will be displayed on Yellow Pages® Online and Mobile. I’ll tell you more about that shortly. In the meantime, visit www.yelp.com.au to rate and review a local business near you.

Whether you consciously think about it or not, the life of a retailer, online or off, is steeped in behavioural psychology.  As we head towards Christmas, here’s a case study on how to move your customer from buying to owning.

Imagine you are a boutique fashion retailer. Time and again people come in to your store, start their walk around the perimeter, acknowledge your greeting with a strained smile and maybe a “just having a browse” mumble, and then exit without trying any of the clothes.  That’s me – I’m your nightmare. Money to spend, interest in buying, but inert when it comes to engaging with the purchase process.

How is it then that I happily and impulsively spent a few hundred dollars on a dress that I hadn’t imagined owning before I stepped into the store?

Great salespeople are a great experience. 

What got me into the store?
I’m pretty basic – it was a sale sign.  But I wouldn’t have bothered chasing a sale unless the window display was evocative.  Subtle lighting, natural tones, textured faux-stone display materials – the store fit out made me feel like a was entering a place of nature.  And what’s more pleasant than strolling around a place of natural beauty?  It felt special, the clothes were obviously cared for, and the warmth generated by the store rippled through me as I started my perimeter stroll. 

How did the sales assistant engage me? 
Catherine (yes I learnt her name through the exercise) greeted me from a non-encroaching distance. “Anything I was looking for?” “No just browsing.”  But then her genius move – “Can I try this jacket on you?”. And she did.  She effectively was asking a favour of me – and through so doing she won my trust because the jacket was great.  But then, “There’s a dress that would really suit you” – and off she skipped to the other side of the store, presenting the dress for my reaction.  She’d already managed to engage me through the jacket and I knew through this exercise she had expertly appraised my figure and gained my trust.  Most of all, it felt like she was truly interested in me not in making a sale. She had invested herself in the experience.

How did she make the sale?
The dress went on and was great. But then the show began. The other sales assistant tagged teamed as they demonstrated all the features – yes features – of this wonder dress. Tie it this way, tie it that way – multiple looks as a result of this beautifully, cleverly and practically designed dress.  Add a cummerbund and add another layer of versatility. 

Was I thinking price at this point…kind of. But by that stage it was a question of how much I would pay, not whether I would.  By that point I could have justified almost any price because I had moved way beyond ‘buying’ and was already in ‘owning’ land. And did I feel I was being sold to? No. I felt like they were helping me.

So what are the lessons for small business owners and operators?

Make the experience concrete not abstract – asking me if I was looking for something in particular would have been less effective than asking me to try on a jacket.  For online sites, telling me to click for the product catalogue is less effective than telling me to click to view details, availability and pricing for 23 skirts.

Create a consistent experience throughout the process – in this case, the store fit-out was consistent with both the clothes and the warm attitude of the staff.  Don’t set up a consumer campaign that celebrates fun, connection and happiness if you grind your customers down with a bureaucratic, boring and cumbersome purchase experience – you’ll confuse people about your brand integrity and savage your conversion rate.

Consider reciprocation – asking me for a favour was a way of making the relationship two way.  I was then prone to ask the sales assistant a “favour” ie I was more prone to ask for what I wanted – the ‘power balance’ was equalised.  Seems strange given I was the buyer with the purchasing power, but when dealing with an inert shopper like me, it was a great strategy to get me to act.  How can you create a two way relationship with your customers with the aim of making them more comfortable to do business with you?

No doubt retail is a tough gig so in the lead up to the Christmas season I’d encourage you to take a fresh look at the interactions you have with your customers and see whether some behavioural tweaking is in order. It might just make the difference.

News Limited recently announced how it plans to tackle one of the big challenges facing the newspaper industry: how to charge for digital news services. The Australian website will have a paywall established in the next few months which will create a subscriber-only service by blocking digital content to those who have not subscribed to the service.

Whilst a paywall is somewhat particular to content providers, there are lessons for all businesses around why ‘free’ is such a powerful behavioural concept and what to do if you want to introduce a charge for something that was previously available for free.

So let’s start by looking at chocolate.

The persuasive power of ‘free’
In an experiment outlined in Dan Ariely’s “Predictably Irrational: The Hidden Forces That Shape Our Decisions”¹, participants were given the choice of two chocolates; high quality Lindt or, the less expensive Hersheys. Through the course of various experiments, the price of each brand was manipulated to see how consumer rationality was affected. In other words, what was the point at which price changed our judgment of what we were willing to experience from our consumption of chocolate. When the Lindt was 15 cents and Hersheys 1 cent, 73% chose Lindt.  Makes sense. We are willing to pay more when we expect to receive a quality experience.

But then life got interesting.  Prices were dropped by 1 cent. Lindt was therefore 14 cents and Hersheys, free.  Suddenly Hersheys gobbled up 69% of the customers, reversing the earlier trend. Was it the one cent price drop? No. It was impact of ‘free’. The majority of participants were now willing to act in spite of the lower level of anticipated pleasure just because the chocolate was free. 

Based on the study, it seems that ‘free’ dramatically impacts our assessment of what we are willing to experience.
Ariely goes on to speculate that the reason we are so swayed by ‘free’ is that there is no downside. In most transactions, we weigh up the pros and cons, rewards and risks, but when something is ‘free’, there is only upside.

This is the behavioural principle of loss aversion, where we are wired to avoid loss more than seek gain.  In the case of chocolates, participants were unwilling to trade Hersheys for Lindt even when they had only to pay one cent for the lower quality brand.  The risk of a less enjoyable experience was still too great. Take away that risk by making Hersheys free, and the game changed.

Introducing a charge for a free service
That’s fine for chocolate, but what does it have to do with a paywall where News Limited are trying to introduce a fee?  After all, it’s a bit like charging for Hersheys when we are used to pigging out for free.  

It shows how difficult a task News Limited have ahead of them because ‘free’ is one of the most persuasive of forces.  So here are some thoughts on how to reverse engineer free in order to transition to a paid service:

Differentiate the product – if a brand wants to charge for something that they have previously given away for free, they need to change the product.  For chocolate, it may mean changing the ingredients or packaging, or emphasising something new about the product that people didn’t know (eg now from sustainably managed cocoa suppliers).  For News Limited, it could mean re-skinning the online experience, introducing new content and/or features, and new marquee journalists.

Reframe the pricing – News Limited customers will be paying between $2.95 and $7.95 instead of zero.  These are small amounts relative to most things, but not relative to free, so News Limited needs to contextualise the price for its customers.  For example, less than a gym membership, less than a zone two train ticket, less than what you spend on lunch per day to get 24/7 access to real-time Australian news.

Introduce decoys – Pricing decoys are a very effective behavioural technique because we assess prices relative to others.  At the moment on News Limited’s subscription page for The Australian are offering a digital pass for $2.95/week, digital plus weekend papers for $4.50 or digital plus Monday-Saturday papers for $7.95.  Here it would have been helpful for them to also offer a ‘decoy’ 7 day print subscription on the same sign up page. Why? It sets a value for the print subscription that makes the print and digital bundles look more attractive. (On The Australian’s offers page which is buried a few clicks in they have moved in this direction but made the mistake of making print look the better deal at $2/week).

Get it over quickly – the behavioural principle of adaptation means we get over bad news more quickly if we are not reminded of it.  News Limited will have to be careful how it treats its customers throughout the sign-up, sign-in and billing process, with the aim to have the pricing recede in the customer’s consciousness. 

Demarcate the process – Anyone who has used iTunes may have noticed that the payment by credit card is confirmed a few days after your purchase. The effect of this is a disconnection of the process (purchasing music) from the pain (payment), which means we are less likely to remember that our downloads have cost us. News Limited should likewise consider how it finalises the payment process with the customer.

Guilt – don’t under estimate how guilt can turn free-loaders into paying customers.  Of course there will always be some people who take without giving, but most of us are susceptible to contra-free loading.  This is our innate desire to work for reward rather than just get rewarded.  Don’t scoff.  A recent move by the Indiana Museum of Art to move to free entry resulted in a 3% increase in paid memberships.
 
The key lesson to take away from this discussion of chocolates and paywalls is this; offering something for ‘free’ changes the game.  It comes with significant behavioural implications that can work well for your business to stimulate volume, but can also change how your product is perceived.  Whilst not impossible to reengineer a free service as paid, it is extremely tricky and therefore should be used with due consideration to your longer term and competitive goals.
  
1. “Predictably Irrational;: The Hidden Forces that Shape Our Decisions”, Dan Ariely, HarperCollins; 2008

It’s a fact that consumers don’t always do what you think they’ll do. That’s because they’re people… individuals… not robots. In this new series for Speaking Sensis, Bri Williams talks about Behavioural Economics, or how a real understanding of consumer decision making can benefit your business.

Some days it just seems too hard. You offer deals to your customers that should work but they just don’t fly.  And then other days, for no apparent reason, customers are beating down your door looking to do business.   How on earth can you get into the minds of your customers to find out what’s going on?

Welcome to Behavioural Economics.  An increasingly popular field, used by both UK and US governments to affect policy change and advertising agencies to improve marketing effectiveness, Behavioural Economics nestles in between economics and consumer psychology. The central mantra of Behavioural Economics is that we humans are irrational. Now, before you get outraged and debate the point, research from Behavioural Economics is about our economic irrationality. In other words, the decisions we make don’t always result in the best economic outcome for ourselves. 

That maybe true of others, you’re thinking, but not me!  Well, think about owning a car that you use only occasionally instead of renting one when required; paying for a 2GB data plan when your internet usage is nowhere near that level; driving an extra 10 minutes to get a 4c off a litre of petrol (the equivalent ‘discount’ you could have saved by spending a few dollars less at their supermarket),  saving your bonus pay money (in your mental bank account) to buy something special rather than using it on bills and buying something special later.  All of these simple, almost daily decisions are prime examples of economic irrationality.  

My favourite example is the TV show “Deal or No Deal”.  Seeing the contestants reject diminishing “bank offers” as their odds slip away in the hope of their fortune changing – despite the economic benefit of taking the deal – is both infuriating and hilarious.   But let us not get cocky.  We all are influenced by factors other than pure economics, your customers included.  And therein lies the opportunity.

There are tried and tested techniques in Behavioural Economics that will help you understand consumer irrationality and then use that knowledge to appeal to customers.  Behavioural Economics sheds light on what makes group buying compelling, how to structure sign-ups for marketing, the role of “free” and discounting, how to communicate a price rise, improvements to loyalty programs, what your customer service consultants should be saying…the list is expansive.

Sound good? Well, in the coming series of Speaking Sensis we will be examining these and other business tips from the field of Behavioural Economics, so look out for our next edition coming soon.

The Sensis® Social Media Report backs up the views of social media experts by showing that engagement is critical to social marketing.

One of the most significant findings of the Sensis® Social Media Report is that consumer uptake of social media far outstrips business uptake. This leads to the conclusion that Australian businesses need to do more to ‘follow the audience’.

But, how?

For a long time, the experts have been telling us the secret is engagement: being able to connect with consumers in a relationship that benefits all.

And the Sensis® Social Media Report bears this out.

Overall, Australian social media users seem roughly split on the legitimacy of advertising in social media. About half don’t like it, while the other half either don’t mind or welcome it.

That’s not so bad. But the skies become less sunny when you consider that only 29% of people say they take notice of advertising on social media. And (coincidentally), only 29% say they sometimes click on social media ads.

In other words, while the acceptance of social media advertising isn’t too bad, we’ve got a fair way to go before it becomes really effective.

So does that mean the social media doors are closed for marketers?

Absolutely not!

You see, in the midst of all this advertising apathy, 63% of social media users say they read online reviews and blogs when searching for information about products and services.

And those consumers expect to read an average of six reviews before making a decision.

But that’s not all. Social media users also have a voracious appetite for something extra. 57% want discounts, 45% want give-aways, 41% want invitations to events and 36% want coupons.

In other words, while social media users aren’t reacting to ads, they’re really big on information and incentives.

And that’s where the opportunity lies. There’s value to be had for marketers who try to be useful, rather than try to be snappy.

And that value can be magnified if you can meet people’s needs so well that they openly advocate for you. That’s because, 27% of Internet users have provided online ratings while 24% have posted an online review or blog.

As everyone keeps saying, the potential for social media marketing is huge. But to unlock that value, we need to see consumers as targets for service, not targets for spin.

Hi.

It’s been a while since my last update. You might be forgiven for thinking I went into hibernation after the Saints lost the Grand Final back in October. But the truth is we’ve been head down putting the finishing touches on a Yellow Pages® transformation that has been more than two years in the making.

Today, I’m really proud to announce the results of that transformation to you. I’m particularly excited to say that today’s announcement isn’t just a wish list of future actions. The more than a dozen new services and countless improvements I’m announcing are all ready to roll. So is the total re-invention of our go to market strategy and stark re-focus on the needs of our customers we’re also announcing.

And I think this evolution of our strategy ticks all the boxes for our customers and shareholders. It:
• Puts SMEs in the drivers seat by taking the complexity out of building sophisticated multi-platform marketing strategies
• Makes marketing more accountable than it’s ever been
• Puts Sensis in a competitive position no-one else can match
• Helps to drive and monetise the continual growth of digital media
• Creates new revenue streams from existing customers and adjacent markets

THE DIGITAL DILEMMA

This strategy has been developed to specifically meet the needs of Australia’s SME sector.

As we all know, the Internet has created a new world of opportunity for advertisers. You only have to look at the rapid growth of search, local search, social media, video and group buying sites to know that.

But digital media has created some serious challenges as well – particularly for SMEs. What sort of marketing is right for me? How do I manage a vast range of marketing from a long list of vendors? How can I measure the impact in a clean clear way?

These challenges – which we call ‘the digital dilemma’ – are seriously holding back the SME sector’s ability to leverage digital media. For example, 55% of businesses who have the Internet say they have a lack of expertise or knowledge, and 62% say they don’t measure advertising ROI, with over half of them saying it’s either too time consuming, too hard or they don’t know how [1].

Clearly, these businesses need help to get the most out of today’s advertising environment. They need a 360 degree service that will let them reach out wherever they need to be and tailor campaigns that reach their customers no matter where they search. And that’s where Yellow Pages® steps in.

YELLOW PAGES®: MARKETING MADE EASY

Today, we’re taking the next step in our digital journey with an exciting new 360 degree local search program from Yellow Pages®. Its  designed to help SMEs find more customers more easily in this rapidly changing marketing environment.

As our posters say… its Yellow Pages®, but not as you know it.

The strategy focuses on three key areas of service – Presence, Performance and Empowerment.

Presence involves a rapid expansion of our network to drive digital usage growth (Yellow Pages® digital usage grew by 50% over the last year) and the advertiser ROI that usage generates.

Presence begins with strengthening our Yellow Pages® Online site. We have significant deepened the content base of our business profile pages. This includes the ability to publish more of your business information, enhanced new Purely Mobile Business and Platinum advertiser products and a new video production facility. Your profile page can now also include social media feeds. For the first time, you can update your Yellow Pages® profile page real time, simply by updating your social media pages.

On top of this, we’re announcing an eye-catching new series of services that are designed to extend the reach of your Yellow Pages network even further. These include:

Yellow Pages® iPad: A ground-breaking new iPad app that combines online, print and map-based business search all in one application.

SPA Network: SPA stands for Sensis Priority Advertiser. For the first time, Yellow Pages customers can gain priority on Whereis®, Citysearch®, Voice and a range of other Sensis services which, combined, drive over 10m visits a month. We’re also expanding the reach SPA can offer with new voice products, such as IQ, the 1234 iPhone app and Sock Assist, as well as the exciting new CitySearch® iPhone app.

API: Our agreements with Google and Bing have delivered incredible value to advertisers by channeling even more leads to them. Our new applications program interface will expand on this by making it easy for developers to create new sites and apps using Yellow Pages® content.

SEO and SEM: Speaking of search engines, we’re also ramping up our SEM and SEO programs to drive even more traffic through search engines to our Yellow Pages advertisers.

Beyond this, we’re releasing a new series of products for companies focused on marketing their web sites. Today, less than 10% use search marketing. Our new ClickManager and Yellow Pages® Digital Plus services will help these businesses optimise their digital profiles.

For those businesses that want a web site, we can now offer the new SiteSmart web site creation and management service. And through our recent acquisition of Quotify we can now offer quotation services to businesses all around Australia. Already, Quotify serves buyers and sellers in 12 different product categories across its 40 sites.

Finally, we’ve also launched a new group buying site Yellow Pages® Offers. This site will give SMEs in a growing number of regions the ability to offer special deals to potential buyers.

Performance talks about the way we’re going to wrap all of these products up into a single, detailed ROI report that helps businesses makes sense of their marketing investment. Customers will be able to see how their advertising is performing… not just counting clicks, but tracking real sales leads all the way to their business. To facilitate this, we are expanding our successful metered ad program from 7,000 ads to half a million!

EMPOWERMENT

Empowerment involves the total re-invention of our go to market strategy. Customers will benefit from:

• A simplified product ladder that reduces our product range from seven to just two;

• A wide range of simple options made accessible through value bundles that help marketers personalise their marketing to meet their needs.

• A stronger focus on customer satisfaction which includes the establishment of a Customer Satisfaction Council and a focus on easy order management and a single bill.

• New sales and customer tools to make life easier, including the iPad based PrepSmart prepping tool for our people, enhanced collateral, and online Advertiser and Customer Service centres

• And all of these initiatives will be backed by a total re-alignment of our business to meet customer needs. We’ve developed a greater understanding of our customers through deeper segmentation and research and we’ve aligned everything from sales to marketing to collateral to service to the needs of our customer base.

RIGHT TIME, RIGHT PLACE

So that’s our strategy, Marketing Made Easy, in a nutshell and it’s ready to roll. I must say that the enhanced customer value and differentiation this strategy offers, together with the exceptional commitment our people have shown, has made this one of the most satisfying programs I’ve ever worked on.

But I don’t want you to think this announcement is an ‘overnight sensation’. In fact, it is the culmination more than two years of work and planning. It began with the roll-out of our iGen system, which has made many of the initiatives we are announcing – such as pricing, bundling and improved product development – possible. And there have been a range of other initiatives, such as our growing focus on industry partnerships and the progressive rollout of our mobile services, that have laid the foundations on which today’s new program is built.

That’s what I mean by ‘right time’. The time is right to now take this step.

But what about ‘right place’? By that I simply mean that there is no-one in a better position to bring a totally holistic, 360 degree advertising service like this to market than Sensis. Sensis is already Australia’s largest locally owned online advertising company and we have more business customers than just about any other local media company. Furthermore, we have the capabilities, such as multi-platform publishing, sales relationships, brands and content to bring this incredibly diverse, but simple, marketing program to life.

And, of course, we also have the print directories which you might note haven’t been mentioned so far. Our print directories continue to deliver millions of real leads to Australian businesses every day. As such, they remain a powerful source of advertiser ROI and competitive differentiation for Sensis. We’ll be working to maintain that position into the future.

CONCLUSION

So, that’s it. A comprehensive and exciting new commitment to our customers. Powerful, but simple, new ways to help Australia’s SMEs make the most of today’s changing marketing world. A bold new long term growth strategy for shareholders.

That’s what we mean by Marketing Made Easy.

See you next time.

[1] Sensis eBusiness Report, August 2010

As a self-professed iPad convert, not only is this week exciting for me personally but it also marks a milestone for the team here at Sensis as we’ve just launched the much anticipated Yellow Pages iPad app.

The app, developed by our talented in-house team over the past few months, brings together for the first time our digital and print content in the one device. It also adds another layer to our multi-channel platform strategy – now spanning print, online, mobile, search engines, iPhone, Android (to name a few!) and now… iPad!

So, the reach of Yellow Pages print and digital products extends to another new audience this week which means Yellow Pages advertisers now have even more ways to reach consumers, and people searching for businesses now have a new way to access the information.

A bit about the new app – it’s free to download and includes all the information you’d expect from Yellow Pages, and it comes in two versatile views so you can choose how to search and view businesses on your iPad:

Business listings are displayed on an interactive combined map and list view

Or you can check out the business ‘ad view’ which displays Yellow Pages book ads based on relevance to the search term – in other words, it’s the digital version of a print search for many of our ads

The app allows you to FIND businesses nearby, SHARE them with friends and SAVE them for later.

And we’re not talking about one-line listings here either! You should check out the content – the listings can include contact details, product and service information, a photo gallery, videos and links to social media.

The app lets you search by name, category or keyword and as you type a list of possible options are presented so you’ll find what you’re looking for faster. There are a number of other helpful features:

See results for businesses ‘nearest to you’ (your current location) or at a predefined location

Share listings with your friends using Send to Mobile or Send to Email

Save business details to ‘contacts’ so you can access them later

We can’t wait to get this app out amongst the iPad community and hear what people think – so make sure you download it now and post your feedback after you’ve used it.

You’ll find the app under Yellow Pages in the App store.

It’s been a busy year so far for the international directories industry and this was evidenced at Kelsey’s annual Directional Media Strategies (DMS) Conference in Dallas, Texas and the European Association of Directories Publishers (EADP) 2010 Congress in Venice, Italy. 

Sensis Chief Operating Officer Gerry Sutton and GM Strategy Geoff Avard were in Venice to steer the Sensis gondola while our GM Product Thomas Arthur and GM Marketing, Michelle Sherwood donned the spurs in Texas. 

Now back on Aussie turf, Gerry commented that it was exciting to see the shift in overall industry sentiment since he attended the Yellow Pages Association conference in the US in April. The vibe’s more buoyant and upbeat as many organisations have set clear strategies for the future and new shoots of growth are appearing.

As part of a panel session discussing Transformational Experiences alongside Mark Cannon of Yell and Olivier Vincent of Ziplocal, Gerry provided the EADP Congress delegates with a high-level view of the key improvements Sensis is making to customer experience.

Two themes consistently came through at the event. The first is that Yellow Pages® is in a very strong position to act as a trusted advisor to small to medium enterprises and help them manage their multi-channel advertising presence and performance in a changing world. The second is the need to provide advertisers with sophisticated reporting on the leads that we generate in order to demonstrate accountability and return on investment to our customers. 

What are some of the other trends being adopted by our European counterparts? There’s a strong emphasis on offering customers multi-channel directories products while also partnering or acting as a reseller for performance networks like Google, website companies and social media networks like Facebook and Twitter. Product portfolios are being expanded to mini websites and landing pages. These strategies are paying off with some businesses expanding digital penetration by 20-30 per cent in a short timeframe, with plans to grow paying digital customers to up 80 per cent. The structure of print books is also being constantly improved and new content is being added to enhance usability. And there’s still an unwavering belief that salesforces continue to be a critical strength and training and investing in people is paramount.

Across the Atlantic at Kelsey DMS, there was a similar focus on managing the digital presence of small to medium enterprises. Michelle Sherwood observed that directories companies around the world are busy building large digital product pipelines whilst continuing to innovate and re-format print products.  

The growth being experienced in mobile traffic was another hot topic at Kelsey DMS, with many businesses quoting around 20 per cent of traffic to directories sites coming from mobile. We’re already exceeding this at Sensis, reflecting Australia’s high adoption rates for mobile search.

NSW Small Business Month is a big a highlight of the year for the Sydney Yellow Pages crew. We work hard to better understand what businesses need from their media services providers in a changing world, so we love having the opportunity to hear first-hand from the hundreds of business owners who attend these events about what’s keeping them up at night on the marketing front.

A lot of the discussions I was privy to during Small Business Month this year centered around the basics: Who’s your audience? Where are they looking?  What kind of tribes and communities are they a part of? How do I communicate and interact with them? How do I set up my website, leverage search engines or other media such as online and mobile directories to get them to buy my products and services? And there were questions about where digital marketing fits in – online, mobile, social…

One of the presenters that Yellow Pages® put forward during Small Business Month was our resident economist and small business analyst, Christena Singh. Christena’s the author of the Sensis® e-business Report which is based on interviews with 1,800 small and medium businesses (up to 199 employees) across Australia. The latest Sensis® e-business Report released on 22 September explored how SMEs use and purchase digital technology. It found that while Australian small businesses are embracing new technology and gaining good results, most don’t have a digital strategy to align activities with the business’ objectives and market plans. And without a plan, small businesses are possibly not getting the best return on their digital investment. 

Of those businesses that did have a digital plan, the report found that most have not integrated all the digital components. It was most likely to include online (80%) and internet (80%) strategies. Mobile and social media strategies were only incorporated in one third of digital plan. For anyone who runs a small business or works with small businesses, this report is a fascinating read and is free to download: http://about.sensis.com.au/small-business/sensis-ebusiness-report/

At Yellow Pages®, we see it as our job to get businesses as many leads as possible via our multi-channel platform – print and digital. When a business takes out a
Yellow Pages® ad, their details can be searched for via major search engines like Google Maps and Bing, as well as www.yellowpages.com.au and www.whitepages.com.au. Online optimisation campaigns are available using our Click Manager product. And we now have links to social media sites Twitter and Facebook through some of our media solutions. The details are also available via our mobile applications and the 1234 voice service (think 1234 sock puppet!). 

We want to make digital marketing easier for businesses by looking at the various options and developing a plan that’s suitable to their business model, industry and perhaps most importantly, their need to maximise their time by optimising all the solutions available. We can also help businesses track the success of their investment through our various measurement programs.

Hopefully the sessions that we led at events like Digital Day cut through some of the noise for small business owners. If you’re in business and you missed the sessions, visit the NSW Small Business Month website or contact Yellow Pages® for advice on a cost effective solution for your business.

Well, it’s that time of the year again. Every August, Telstra reports its annual financial results for the financial year to June (FY10). And that, of course, means Sensis reports as well. So I’m pleased to use this opportunity to give you a brief rundown of our FY10 performance.

First, I’m pleased to say that Sensis has delivered growth (adjusted) in what has been a very challenging year.

On an adjusted basis, Sensis’ EBITDA (earnings before interest, taxation, depreciation and amortisation) grew by 2.4% to $1.21 billion. This was based on revenue of $2.19 billion (up 1.0%) and expenses pre depreciation and amortisation of $982m (down 0.6%).

I should explain what we mean by ‘adjusted’. During the year, a number of extraordinary items impacted our financial position. These were the transfer of Trading Post to Telstra, the sale of Universal Publishers, the acquisition two businesses in China and the impact of the falling Australian dollar on our China revenue. All of these items have a ‘one off’ impact on our FY10 results. To get to an ‘apples with apples’ comparison between this year and last year, we need to adjust for the impact of these one-off items.

Digging a bit deeper, I found four things really encouraging about our FY10 performance.

A solid performance in a tough year for SMEs and the advertising industry
The first is that Sensis was able to grow in a very tough year. We were operating in markets that were heavily affected by the global financial crisis – both in Australia and China.

Throughout the 2009 calendar year the Australian main media market experienced what may have been the largest decline in its history. The overall market (including online) declined by 8% for the year, while print media specifically declined by 13%(1). In contrast, our Yellow Pages® and White Pages® print revenue declined by 5.1%: a strong result considering that almost all this revenue was earned during the 2009 calendar year.

At the same time, Australia’s SMEs (who make up the bulk of our customer base) registered some of the lowest confidence levels in the history of the Sensis Business Index during this period. And, while confidence has partially recovered, it is still very patchy.

SME perceptions of the economy fell from +50% (i.e. more SMEs with a positive perception) in late 2007 to -72% in early 2009, when the Yellow Pages® FY10 metro canvass was being sold. Perceptions rose in late 2009 (Yellow Pages® non metro canvass), before falling again in May this year: from +24% to -1% in just one quarter(2).

Yellow Pages® remains the growth engine for Australian SMEs… now and into the future
The second notable element of this year’s result was the continued strength of Yellow Pages®.

Yellow Pages® sole focus is on driving sales leads to hundreds of thousands of Australian businesses, most of which are small to medium enterprises. And while this core purpose hasn’t changed, the way we deliver leads has evolved enormously.

These days, Yellow Pages® is much more than print. It’s evolved into a multi-platform lead generation network. Yellow Pages® advertisers can now be searched for through Yellow Pages print, online, online, mobile, iPad and T-Hub. That’s over 14m visits by potential buyers a week(3), with about 70% of searches resulting in the buyer contacting a business.

Those same advertisers can also be searched for through our Whereis® and voice services, like 1234. That’s another 2.3m visits a week(4). And third party sites through which Yellow Pages® can be searched (like Google Maps and Bing Maps) receive many more potential visits every week.

It’s the diversity of this network that gives Yellow Pages® advertisers the edge over their competitors. Through just one company, our business customers can be searched for in print, online, voice and mobile: in directories, general and local search engines and mapping sites.

And there’s a lot more to come, so stay tuned.

Digital is leading the way forward. Our digital innovations are kicking goals.
It’s also been a great year for innovation, particularly in digital media. In fact, digital now accounts for 20% of our Australian revenue, which makes digital a major player for Sensis and the key growth engine moving forward.

The undoubted highlight has been the performance of our mobile services. Sensis’ total mobile usage grew by 80% to 3 million visits per month (15% of total digital usage)(5). Within that, we saw some fantastic growth from our new innovations. The White Pages® Mobile site grew from nothing to 410,000 monthly visits in less than a year, while our Yellow Pages® and White Pages® iPhone apps grew from nothing to almost 600,000 monthly visits in even less time. Even now, months after their launch, the Yellow Pages® and White Pages® iPhone apps are the fifth and seventh most popular free Lifestyle apps in Apple’s AppStore(6). Meanwhile, our more established mobile sites maintained strong growth, with Whereis® Mobile up 43% to 950,000 monthly visits and Yellow Pages® Mobile (not including iPhone app usage) up 56% to 560,000 monthly visits.

We’ve also been able to make very significant improvements to our online sites. We’ve made substantial upgrades to almost all our sites, designed to improve your ability to search our advertiser base and the quality of content you receive. We’ve also added social media sharing capabilities to White Pages® Online, Yellow Pages® Online and Citysearch®. We’ve also added new content to the Whereis® digital mapping database, including national upgrades to road geometry, point of interest features, 3D landmarks, junction views. This is all designed to make using satellite navigation a better experience for users of Whereis® powered systems.

And we’ve backed these many user experience improvements up with new digital advertising bundles, which make it easier for advertisers to profile themselves across our networks in the way they want to. These bundles, such as Purely Mobile Business and Digital Content Maximiser have performed exceptionally well, with uptake of both running well above target.

A big thank you
Finally, perhaps the most encouraging element of this year’s results has been the support of people – the customers and employees that are crucial to Sensis.

To begin with, thank you to all our customers – both users of our products and advertisers – for your unwavering support this year. It was pleasing to see that, despite the many challenges FY10 has delivered, our customers have remained very positive about the services we offer. In fact, today, many advertisers are asking us to do more for them, like providing new value-added marketing services to their businesses. To me, these requests are a real vote of confidence, and I can confirm we’re definitely going to respond to them. We have recognised a number of opportunities to improve the service we provide to our customers and we’ll be relentless in pursuing them. We’re listening, and keen to respond.

As I said before, stay tuned.

Of course, our FY10 performance would not have been possible without the people who are Sensis. It takes a difficult year like this to test any business and I want to really thank and congratulate our people for their commitment, not just to Sensis but to the needs of our customers, over FY10.

Until next time,

Bruce Akhurst

1: CEASA Main Media Report, December 2009
2: Sensis Business Index, May 2010 and earlier
3: All data represents average weekly visits, June quarter 2010. Print data from TMP, Universal Measurement Programme. Digital (online and mobile) data from Omniture SiteCatalyst.
4: Digital (online and mobile) data from Omniture SiteCatalyst. Voice data from Sensis internal call data.
5: Omniture SiteCatalyst, average monthly visits for June quarter 2010 vs June quarter 2009
6: Apple AppStore: Top free apps in the Lifestyle category. Average of daily results for the period 2 August 2010 to 6 August 2010