Borrell: Local sales people fighting against robots

headed for the tarpitsGordon Borrell and his team are out with a new report about the dim future for Yellow Pages directories, and it contains some remarkable and telling information about who is selling the Web locally. The evidence reveals a situation for print Yellow Pages publishers that is “eerily similar” to what newspapers faced when they began losing classifieds revenue to the Web.

But this report, more than any I’ve seen from the company, absolutely nails the reality that is online sales at the local level, so it’s actually about much more than just Yellow Pages or directory sales. In terms of feet-on-the-street, the local newspaper and the local directory companies dominate, accounting for 84% of the overall online sales force at the local level.

newspapers and directors account for 84% of the local online sales force

While these people are competing against each other, the bigger picture is actually quite different:

This army of local online reps is fighting against robots — the fully automated online ad selling machines that have been deployed with considerable success by companies that have no local sales reps. These systems are pulling billions of dollars out of local ad budgets without anyone actually talking to the advertisers. Their sophisticated user interfaces are designed to give advertisers — small and large — the ability to design, purchase, place and monitor their online ad campaigns without the expense of personal help. Google is the preeminent but by no means only example of this approach. The interesting questions here are how many more SMEs are left that are willing to take on that level of daily ad management, and whether face-to-face selling can pry many early adopters out of the robots’ clutches.

In an email this (Wednesday) morning, Gordon Borrell told me that beating these robots is a safe bet.

When it comes to local ad sales, feet on the street will kick robots’ tin asses every time. That’s because every small advertiser has a nagging case of Wannamaker-ism — that is, he believes that half of his advertising works and half of it doesn’t, and he can’t tell which is which. Enter the friendly local salesperson, whose son plays soccer with the businessman’s son, or whom he sees at the Kiwanis Club meetings or at church. Those midnight credit-card transactions on Google buying up keywords like “Albuquerque plumber” or “Used cars in Duluth” will fall victim to the same feeling — that half of those Google words don’t actually work. Local advertising is sold on trust, and it takes people to cultivate that trust.

He added that yellow pages publishers are ideally suited to take back some of the money going to robots.

The yellow pages publishers have made some good strategic moves on the Internet in the past several years, including acquisitions and cross-training of its sales force. But the secret weapon that they really have is all those front-line salespeople who know how to sell to the millions upon millions of small businesses. It’s an efficient, compelling, low-priced sale pitch — as opposed to a heavily prepared, glossy, high-priced pitch that the newspaper and TV salespeople are trained to make. We think a lot of the higher-level ad spending from major advertisers has already fallen to the net, so the next big thing is the smaller local advertiser. Reaching them is going to be difficult unless a sales staff is prepared — from sales psychology to compensation structure — to sell a lot of $1,500-a-year contracts.

I’ve been part of two attempts by local TV stations to get into the directory business. Both fell short of expectations, entirely because the media companies weren’t able to put together a sufficient sales force to make the dynamics work. And attempts by such companies to automate the sales process — to create their own robots — have all failed. I still believe in the model, but I think the database from which the directory draws needs to be beyond a simple search for addresses and telephone numbers.

I also recommend to clients that they look at the local yellow pages sales force when hiring online sales people, because they are the most logical pool from which to draw. A little money from a lot of sources adds up, but it’s hard to see that when you’re only accustomed to staring at big numbers. The local yellow pages sales force doesn’t suffer from this blindness.

(Originally published in AR&D’s Media 2.0 Intel newsletter)

Comments

  1. The game changer here is that it’s completely feasible for an online directory to prosper with no robots and no sales reps. Brownbook.net, for example, charges 20$ a year for full access to the site (for notifications of customer reviews, adding videos, etc) for any business. They don’t have sales reps or “robotic” ad purchasing tools.

    Having a paid local sales force with client connections is an advantage for the traditional phone book, but it’s an expensive advantage. Supply and demand are a more potent force.

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