It’s easier than ever for small businesses to buy their own advertising through tech giants such as Google and Facebook. But despite the growth of the self-serve ad business, YP – formerly Yellow Pages – is betting on a sales strategy as old-school as the phone book: real live sales reps.
The company has been on a hiring spree lately and now has one of the largest advertising sales forces in the country. Though small-business owners can purchase online ads themselves, YP executives think many would still prefer to talk to a person.
It’s a stark contrast to what other ad-sellers, including local firms NearWoo in Santa Monica and PK4 Media in El Segundo, are doing: investing in software and creating self-service platforms for small businesses, eliminating the need for a sales staff.
But Jeff Federman, senior vice president and general manager of digital at YP, said that’s exactly what motivated YP to staff up.
“The real differentiator that YP has is our customer service, as opposed to some type of tech interface that’s pushing you through and not understanding your needs,” Federman said.
YP is based in Atlanta, but its digital business is headquartered in Glendale. Just last month, the company completed hiring 350 digital sales representatives, about 50 of whom were hired locally. That brings its total sales staff to 4,000 nationally, more than 100 of whom work in Los Angeles County.
Those reps are selling more than just listings on YP.com. The company helps clients design websites, makes sure they come up in Web search results and, since signing deals last year, sells advertisements from Google and review site Yelp to its clients. Federman said YP is now the biggest reseller of Google advertising and that the company’s goal is to act less like an ad publisher – as the Yellow Pages phone book was – and more like a local ad agency that’s a one-stop shop for small businesses.
“At the end of the day, you really want a sales rep that’s talking to you and finding out what you need as a customer,” he said.
Federman and YP hope that proves true, as YP has seen its revenue shrink substantially since it was spun off by AT&T Inc. of Dallas in 2012 and a majority stake of the company was purchased by New York private equity firm Cerberus Capital Management. In 2013, YP reportedly had revenue of about $2.5 billion, a drop of nearly 25 percent.
Federman would not release more recent figures, but said digital ad revenue now makes up 44 percent of the company’s total revenue, up from about one-third at the time of the spinoff, indicating digital sales are either growing or shrinking more slowly than its print publishing business.
Old anew
When a business owner calls YP, they are partnered with a YP sales rep closest to their location. A tailor in Pasadena who calls YP, for instance, would be set up with a sales rep in the firm’s Glendale office.
Every rep works with between 10 and 70 clients, depending on how active those accounts are, and can offer a variety of YP services. The company can offer help designing websites, including mobile-friendly ones, and with making sure a business comes up in searches on Google, Yahoo or Bing. It also scours hundreds of online directories to make sure clients’ business information – such as address and hours of operation – are accurate. YP also sells mobile ads and even direct-mail advertising.
Depending on which services a client needs, YP can charge as little as $150 a month or as much as $9,000.
As the firm has hired more sales reps, it’s also partnered with more tech-focused companies, including online restaurant-reservation firm OpenTable, food delivery company GrubHub and, most recently, movie ticket retailer Fandango. YP also made its first acquisition last year, buying New York mobile ad company Sense Networks, which analyzes consumer mobile data.
Still, the firm’s focus is heavy on humans, and that makes some skeptical. For example, Jason Crilly, co-founder and chief executive of mobile ad company NearWoo, said self-service ad-buying platforms can be more convenient for small-business owners, especially those with little time to sit and speak with a sales rep to map out a marketing strategy.
Most business owners, he said, would rather go online, quickly make an ad buy and get on with their day.
But Tom Alexander, founder and chief executive of digital media company PK4, is more bullish on YP’s model. He said the company is putting itself in an attractive position because there’s still an appeal to working with people instead of simply buying ads online.
“The automation in technology is great and necessary, and it’s absolutely useful,” Alexander said. “But having a dedicated person who, if something goes wrong with an ad campaign, you can call up right away is definitely comforting.”
