The company known for dropping hulking print directories on your doorstep is now looking to turn more Web pages yellow.
Yellow Pages will announce on Tuesday the launch of a new online advertising and marketing company, to be known as Mediative.
The move represents an attempt by the Montreal-based company to broaden its client base to include larger national advertisers. Currently, 91 per cent of Yellow Pages revenue comes from local ads. Its core customers for print and online directory advertising are small- and medium-sized businesses.
But in an era where print advertising growth is constrained, parent company Yellow Media Inc. is also hoping that it can move its business beyond the book.
"Clearly, offering traditional print advertising wasn't enough for these national advertisers," said Yellow Media chief executive officer Marc Tellier, adding that national advertising already brings in more than $100-million annually for the company. "We felt there was a unique opportunity to … bring this together to essentially serve what we think is pent-up demand."
The company is also announcing a series of acquisitions it has made to prepare for the launch. In recent weeks, Yellow Pages has bought Internet ad firm Uptrend Media; Enquiro, which handles search engine marketing and research to help companies get their brands noticed through searches on websites such as Google and Bing; and retail advertising agency Ad Splash Media. All those companies will now be folded into Mediative.
Those firms bring with them some big-name clients that will now turn to Mediative to sell advertising on their websites, including Toys "R" Us, Martha Stewart and insurance company Allstate.
Yellow Pages also has a minority stake in another search engine marketing firm, Acquisio, and has now struck an exclusive licence agreement to sell Acquisio's software to clients. The product allows companies and agencies to bid on ads with different search engine websites through one service. It also tracks what they spend and how much attention they attract from each of their media buys. Next week Acquisio will also be announcing an expansion into ad sales and tracking on Facebook, and will be working on expanding its service to more social media.
In total, the acquisitions cost Yellow Pages Group approximately $60-million, with $35-million paid in cash and the balance to be paid in the future depending on how well the new subsidiary performs.
The president of Mediative, Patrick Lauzon, said the company will also target advertising agencies that want to expand their clients' online presence.
"A lot of the national agencies are not in this space because they've been challenged to make money with this compared to traditional media," Mr. Lauzon said. "If you look at the overall media buy, newspapers have been going down, losing a lot of traction. Online's been going up. Online is the third-most bought medium now. … It will surpass newspapers, I'd say probably this year or next year. There is definitely a crossroads coming in the next two years. Online growth is massive."
The company will also focus heavily on mobile advertising in coming months.
"This is a growth market," Mr. Tellier said of the digital advertising space. "This is continuing the strategy we embarked on a number of years ago to extend past traditional advertising."
BY THE NUMBERS
Number of unique visitors Mediative says it can access through the 37 websites owned by Yellow Media, such as YellowPages.ca, AutoTrader.ca, and through the websites where it now sells display ads, such as CFL.ca and MarthaStewart.com.
Number of employees who will work for the new subsidiary out of four Mediative offices in Toronto, Montreal, Vancouver, and Kelowna, B.C., including 20 to 30 new hires.
Approximate annual revenue Yellow Pages Group estimates will be generated by the three companies it has acquired to build Mediative.
Yellow Media Inc.'s online revenue in 2009.