Plus, CEO Julien Billot explains why B.C. is a special market for the directory company
Last week, Yellow Pages—the country’s dominant directory company, with over $900 million in annual sales—got into the consumer magazine business when it purchased two storied local brands, Vancouver and Western Living, for an undisclosed amount from TC Media. It’s all part of a push by the Montreal-based media company to strengthen its ties to the fast-growing western market, which, including B.C. and Alberta, accounts for some 30 per cent of its 250,000 clients. BCBusiness editor-in-chief Matt O’Grady spoke to Yellow Pages president and CEO Julien Billot on a visit to Vancouver Tuesday.
Yellow Pages has been rather rapidly getting out of the print business—or repositioning itself as a digital-first company. Why did you decide to purchase Vancouver and Western Living magazines?
The thinking was: more content. That’s the play. What you have to understand is that we have Caroline Andrews on our team, formerly of TC Media—and she knew these publications very well. The big play here is not about print; it’s about content. Take a look at my phone. Today, we had approval from Apple to launch our new app called YP Dine. All the content from Vancouver magazine and Western Living will help us to feed into this local app. And that’s really the play. We can feed a lot of content into our media platforms.
But to generate that content, you don’t really need to have a print product anymore, do you? What is the future of print within the Yellow Pages family?
Let’s forget about print and think about the different usages you can have. You have two types of usages from a digital media perspective. You have search, and you have discovery or serendipity. Print, for me, is more about serendipity. Our major apps are mainly about search. The two parts are very important because if I’m looking for something very precisely, I’m using the search. If I don’t know exactly what to search, and I want to know what’s in the neighbourhood, that’s a different kind of media. Longer term, we really see our evolution in these two types of media: search media and serendipity or more “flipping” type of media. Today it’s on print but tomorrow it could be a very different format—ebooks or emagazines. Some people still prefer a paper book or magazine, but for sure we want to give these magazines more digital opportunities. We are not coming in to shut down print.
Any plans to buy other city or regional magazines?
No. It was a content play and a good tactical opportunity, but we don’t have a plan to buy other magazines.
More generally, what’s the strategy for managing the migration of your business from print to digital?
Today we are a digital company because 55 per cent of our revenues come from digital. We expect those revenues to shift 10 per cent every year. Our plan for 2018 is that digital will represent 80 per cent of our revenues. If you think about our customers, roughly 65 per cent of our customers are digital-only or print-plus-digital; only 35 per cent are print only. By 2018, we expect print-only customer to be 15 per cent. We are on a fast migration. The legacy of the Yellow Pages brand, for 100 years in Canada, represented a link at the local level between users and advertisers. And we want to keep that relationship. Digital transformation is taking advantage of that legacy—but doing things differently.
Why has western Canada become so important to Yellow Pages?
B.C. is a very interesting market because it’s much more digitalized than the rest of the country. It’s like the West Coast of the U.S.—more sensitive to digital solutions. B.C. was the place where we transformed faster than anywhere else, particularly on the sales side. Today it’s the place with the largest percentage of digital revenues in our company: in B.C., almost 60 per cent of our revenues are digital; in the rest of the country, it’s close to 50.
You mentioned your new YP Dine app. What’s the thinking behind launching that and a few of your other apps?
Historically, we were very good at serving the service industry. But we were not very good at the restaurant vertical, or the retail vertical, or the real estate vertical, or the automotive vertical. So now we will have solutions to deal with these segments. We will try to deal with these segments in local markets all across Canada.
Any thoughts about expanding outside the Canadian market?
No. In every market, we would have to have local content, local sales, local media. We have 250,000 customers—there’s 1.2 million SMEs in Canada, so we have 20 per cent market share, but it’s mainly in the service segment. We have no market share in restaurants. We have no market share in automotive. No market share in real estate. So all of those are tremendous opportunities for us right here in Canada. Our major focus is to find growth and return to growth by 2018—to focus locally and grow market share locally.