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Remarks as prepared for delivery by Elmer L.
Smith
Thanks, Neg. Hello, everyone. It's great to be here and great to see all of you. Neg, I really appreciate those kind words. And thanks for reminding everyone that this is my 38th year in this business. {Big smile} Thirty-eight years. Wow. Who woulda thought? I know I wouldn't have predicted I would spend 38 years in this business 38 years when I started out as a sales rep. The year was 1966. Looking back, it was an important year for a lot of reasons, most all of which were more important than me starting my career. In 1996 NASA launched Orbiter I to the moon. The Dow Jones Index hit a record 995 points. The Beatles held their last public concert up the road from here at Candlestick Park in San Francisco. And NBC made headlines by televising its entire lineup in living color! It was a year of great promise in another respect, too. For the first time, Time magazine did not choose a man or woman as its person of the year. Instead, it chose an entire generation - the men and women of America under the age of 25. Explaining its decision, Time editors wrote … and I quote: "Never have the young been so assertive or so articulate, so well educated or so worldly. … This is not just a new generation, but a new kind of generation." I'd say that new generation has lived up to its billing, wouldn't you? As they matured in the last third of the 20th Century, those Americans introduced us to artificial hearts, personal computers, cellular telephones, computer animation, high-definition television and disco, although I'm not sure anyone wants to take credit for that last one. That generation also included a lot of the men and women in this room who helped build the Yellow Pages business into what it is today … a thriving, important marketing tool and information resource that millions of businesses and consumers rely on every day. You'll have to excuse me if I sound a little nostalgic. I suppose I am. I was deeply honored to serve as the chairman of this association the past two years. I'm not planning on riding off into the sunset anytime soon, but I can't help but wonder how many more opportunities I'll have to stand before so many friends and colleagues and say thanks for the last 38 years. So, begging your permission, I'd like to take a few minutes this morning to look back … and then look forward. I'm not sure how many of you go back 38 years in this business. But if you do remember those days, you recall our business being a lot simpler. Not easy, mind you. But simpler. Heck, when I first started, we had only a handful of products to sell and the fanciest was a quarter-page black-and-yellow display ad. We were mostly competing against ourselves in those days and our objectives and goals were internal ones. A lot of what passed for marketing and strategy was really focused on getting the best people to work for you instead of someone else. People who wanted to work hard and people who understood the importance of great customer service. We were a simple medium, starving for affection and respect. If I were to pick a pivotal point and event that changed our business, it would be divestiture in 1984, when the Justice Department split AT&T into seven Baby Bells, and we added a new word to our vocabulary - competition. We had competition before divestiture, but it wasn't anything like we've encountered in the years that followed. The first competitive wave came from the incumbent publishers. Then came the first aggressive entrepreneurs who were lured by the historical margins and consistent returns Yellow Page businesses had earned over the years. We discovered color a few years later, and our customers started buying red like it was the next Hula Hoop. You remember Hula Hoops, don't you? They were these plastic loops that you twirled around your hips like … Nope, I'm not going there. The point is that our print ads started taking on a much higher quality and making a much stronger impact. And our profits took off, too. Eighteen, nineteen, twenty percent growth. No wonder we call those the "good old days." Then came the long-awaited electronic revolution. As we all know, now you can get the Yellow Pages on the Internet, on CD-ROM, wireless PDAs and cell phones. We're re-inventing ourselves all over again. The changes we've seen lately have moved the Yellow Pages from a value-added artifact of the communications industry to a powerful information and commerce business transforming the media industry. My, my, we really have changed, haven't we? {Pause} Or have we? Let me ask that question another way: Are we a hedgehog or a fox? Do you know the story of the hedgehog and the fox? Actually, it's an ancient Greek parable. According to the parable, the fox is sleek and cunning and knows many things. The hedgehog, on the other hand, is more of a plodder, not at all sleek, and sure of only one thing. And that's how to protect himself. The fox constantly stalks the hedgehog, but the hedgehog continually frustrates the fox by doing the one thing he knows, which is to roll up in a ball and spread out his spikes like a coat of armor. Author Jim Collins uses the parable in his business bestseller "Good to Great" to compare different business strategies. The hedgehog - he says - has simplified a complex world into one essential idea. He goes on to say that the people who have built great companies were all - to one degree or another - hedgehogs. They took a simple concept and implemented it with fanatical consistency. Notice any similarities? We may not be as glamorous as network TV. We may not have the size of a double truck newspaper ad. We may not have sexy models like the sophisticated magazine spreads. But, like the hedgehog, we know one thing and it continues to serve us well. We know value, and we know how to deliver it. We've been delivering value to advertisers and consumers for more than 50 years now, even longer than I've been around. And our story just keeps getting better. In his annual trends and opportunities report, Dennis Fromholzer put it this way: "The value Yellow pages is delivering to the marketplace continues to remain rock-solid with no sign of letting up." … I sure like the sound of that. He backed up that assertion with some compelling facts: The average Yellow Page advertiser now receives more than $12 in sales revenue for every dollar spent on a Yellow Page display ad. On average, Yellow
Page users spend 28 percent more than average. Like Dennis Fromholzer, I also like how the future is shaping up for Yellow Pages. There's tremendous opportunity for us among the thousands of niche-oriented service businesses springing up in every community. Non-employee, home-based start-ups are the fastest-growing businesses in this country. Consultants. Caterers. Pet sitters. Web designers. These are folks for whom traditional media are too expensive and too scattered. These are folks who need us to deliver customers to them. Our foundation is stronger than ever because of users, young and old. Yellow Page users are value shoppers who know they can turn to us to help them make informed buying decisions, exactly when they want and need information. Young consumers are turning away from traditional media and coming to us - both our print directories and our electronic versions - in numbers outpacing previous generations. They're flocking to us because they enjoy searching out information for themselves, and they like making their own buying decisions. Bless their hearts - don't you love 'em? {Smile} The potential we have to bring millions of new users to our pages through innovative distribution strategies - Internet portals and electronic search engines - is staggering. All that makes the future look pretty bright, doesn't it? In fact, I don't think there's ever been a period when I can recall our industry being in better shape. But let me add a word of caution. This is no time to let up. I'm reminded of something I heard Jeffrey Bleustein, the CEO of Harley-Davidson, say not long ago. Harley-Davidson was celebrating its 100th anniversary and had just been named "company of the year" by Forbes magazine. But Bleustein wanted to warn employees against complacency and arrogance. He said: "We have to pretend ten fiery demons are chasing us at all times." In a lot of my markets these days, I don't have to pretend. There are 10 fiery demons chasing us. As much as I think competition helped us all get where we are today, by forcing us to raise our game and improve our products and services, I'm not at all sure the intensity of the competition is good for our customers. I think they're getting confused, and I think we're blurring the value proposition for them. … But that's another speech for another time. {Smile - brief pause} The vigilance I want to encourage here today is on behalf of our entire industry. Because we all know the challenges we continue to face in our local markets, on the national front and from our friends in other media. Sure, we have to do our best to fend off local competitors. And we'll continue to do that based on individual strategies. But the more important battles are those we need to fight collectively. Those start with national advertisers. We've been fighting this battle for as long as I've been in the business, and I'm frustrated we haven't made more progress. But that doesn't mean we should let up. National advertisers spent in excess of $200 billion last year. Do you know how much we got? $15 billion. National advertisers also account for more than 40 percent of most markets in the top headings, but only 15 percent of heading revenues. We're not getting our fair share of their attention and their money. Not by a long shot. And that should put us all in a fighting mood. I know we keep courting those guys, and I know they keep taking most of their dollars elsewhere. Maybe they think we're not sexy. Maybe we're not. Maybe they think we're not easy to do business with. I admit we could be better at that. But we need to keep reminding them that we're the hedgehog, and we know one thing better than anyone. We know value. And we've simplified their path to achieving it. There are also the issues of research and co-op. Are we collecting the right data that advertisers need to make their decisions? How do we direct co-op dollars to Yellow Pages instead of seeing them go un-used year after year? These are questions that should be on the minds of everyone in this room. And they're bigger than any ONE business in this room. That's why we need to tackle them together. I've been pleased and inspired by the work Neg and his revitalized organization have done in the last year. I'm sure you feel as I do, that YPIMA is back on the right track and working hard in our mutual self-interest. But Neg and his folks can't do it all, either. These are battles that require a unified effort. And I think that effort can start right here. Because there's a great lesson for all of us here this week if we just open our eyes to it. The lesson stands just outside this hotel, in the San Diego harbor. It's the San Diego - Coronado Bridge. Have you noticed it yet? It's one of the most beautiful bridges in the world, connecting the city of San Diego and the island of Coronado. Before the bridge opened in 1969, you had to take a roundabout two-lane back road to Coronado. But now you just drive over this magnificent bridge to visit the beautiful little community of Coronado. The reason this bridge is significant is because it teaches us a lesson about the strength that comes through unity. The only way the bridge could span 2 miles and provide a vertical clearance of 200 feet is through an intricate network of braces and stiffeners, which were encased in concrete piers and driven more than 100 feet into the bottom of the Bay. Without any of the 30 piers, the bridge would eventually fall victim to the winds and currents that continually buffet the structure. The bridge finds its strength by sharing the load. Together, we are an equally impressive network of men and women. We represent hundreds of businesses that share a common objective. And that is to deliver a portfolio of information and advertising products that bring buyers and sellers together. Efficiently. Cost-effectively. Together, we need to build the bridges that continue to make those connections. We need to find the strength to stand up to those who would erode our position. We need to fight for our fair share by sharing the load. Based on nearly four decades in this business, I have no doubt we'll find the strength to do so. Thank you. Thank you for the last 38 years. They've been fun. It's been my great pleasure to be with you today. Let's have a fantastic conference. |
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