MONTREAL – Yellow Media is aiming to get as many people as possible searching its online sites, such as Yellow Pages, as it continues to move beyond print directories and become a digital company, new chief executive Julien Billot said Friday.
“The objective is always the same — grow the audience because basically what you want to provide advertisers is a return on investment,” Billot told analysts as he briefly sketched out the company’s strategy.
While he didn’t go into detail, Billot said that means Yellow Media’s digital services have to respond to “key marketing trends” and be relevant to businesses.
Billot, a French digital media executive with more than 20 years experience, takes over the challenge of continuing the transformation of Yellow Media while competing with big search engines Google, Yahoo and Bing as well as small digital companies to attract consumers who are using tablets, laptops and smartphones to search for products and services.
Billot, expects the process to take time while he instills an “overall digital culture” in the Montreal company.
The company has already expanded from business listings to digital services, including producing videos, building websites and Facebook pages for small- and medium-sized businesses. That’s a long way from its beginnings in 1908 when it printed its first directory and was still part of Bell Canada.
“To succeed in its digital transformation, Yellow Media’s marketing solutions need to provide better return on investment relative to its digital marketing peers,” Billot said.
He also didn’t rule out acquisitions to expand Yellow Media’s online presence.
“You need the biggest audience you can get.”
Yellow Media (TSX:Y) has said that 43 per cent of its revenues are from digital services and has been aiming to raise that to 50 per cent. The Yellow Pages print directory is still offered, but consumers in major markets can opt out of receiving it.
Canaccord Genuity analyst Aravinda Galappatthige said Yellow Media is quickly coming to its “crossover point” where half of its revenues will come from online.
“In many situations, the Yellow sales person is the only one walking in the door of the small and medium enterprise with a broad marketing/ad offering,” Galappatthige wrote in a research note. “This we believe is a vast, predominantly untapped opportunity.”
But Galappatthige said Yellow Media is likely to face growing competition online and a loss of online audience is a “key risk.”
Former CEO Marc Tellier, who left in August, started the company’s transformation in the last decade to an online company.
He bought up online sites Canada411.ca for finding businesses and people; RedFlagDeals.co, a shopping deals site, and Restaurantica.com, a restaurant and nightlife site. The company also launched its Yellow Pages mobile app for smartphones.
But Yellow Media also needed a major financial restructuring during Tellier’s tenure and cancelled its dividend. It also sold Trader Corp., home of AutoTrader magazine, to London-based private equity firm Apax Partners for $745 million, much lower than its purchase price.
Yellow Media recently cut about 10 per cent of its workforce, mainly jobs related to print directories, but it has hired about 175 people for information technology and digital media jobs. It now employees about 2,800 with about 1,000 at its head office in Montreal.
Billot, 45, was most recently head of the media section of France’s Solocal Group, formerly PagesJaunes Groupe. Prior to joining Solocal, Billot was CEO of Lagardere Active’s digital and new business group.
He said the directory business in Canada and France have some similarities, noting both face competition from the big U.S. search engines.
While Billot said he was working to continue the company’s digital transformation he would not comment on its strategy for mobile device users.
Shares in Yellow Media were down four cents at $22.34 in afternoon trading Friday on the Toronto Stock Exchange.