On Jan. 1, Julien Billot begins the race of his life.
The French media and telecom veteran becomes the new president and chief executive officer of Yellow Media Ltd., and the clock is already ticking on efforts to remake the struggling company into a major digital player.
Digital revenues need to come in faster to offset the steep declines in revenue from print directories. That means spending to build up Yellow Media’s online and mobile services, finding innovative ways to attract and keep advertisers, and transforming it into a new company that can survive a post-print era.
Mr. Billot certainly comes with an impressive resume. He was most recently executive vice-president and head of the media unit at French search and directory company Solocal Group SA, formerly known as PagesJaunes. Before that, he was CEO of French multimedia publisher Lagardère Active’s digital and new media group. He also has 13 years’ experience in senior management positions at France Telecom, notably as chief marketing officer for Orange, the company’s mobile subsidiary.
“Solocal is a company that Yellow Media had always admired in terms of their ability to grow their online audiences,” says Yellow chairman and interim CEO Robert MacLellan.
Mr. Billot fits the bill as someone with a proven track record of transforming a traditional directories company into a digital age player, said Mr. MacLellan.
At Solocal, Mr. Billot’s mandate was to stabilize the print audience and accelerate the shift to digital. Over the span of four years, revenues from digital sources increased to 58 per cent from 35 per cent.
He’s expected to work the same kind of magic at Yellow, whose digital revenue is growing and stood at 43 per cent of total revenue, or $102-million, in third quarter. That’s the good news. The bad news? Print directories are declining so fast that total revenue still dropped 11 per cent, and the company lost 36,000 advertisers in the 12 months ended Sept. 30.
Another asset Mr. Billot brings is his experience working in the fishbowl environment of a public company, said Mr. MacLellan. “He’s enormously charming. He’s a great listener. He knows the business cold and he’ll hit the ground running,” the chairman said. “My experience of him is that he’s a very detail-oriented person.”
“He’s going to bring this overall knowledge of how they’ve done it [at Solocal]. He has that digital mindset,” says David Goddard of IMS Local Search Authority. “Mobile search now is really the key to going digital.”
A growth area Mr. Billot is likely to want to expand is the provision of digital services to small- and medium-sized businesses, such as website development and marketing.
“One of the things the company is trying to do is to get advertisers who have three products or more. You become more of a service provider and have a long-term relationship with the customer,” said Mr. MacLellan.
For example, the company offers customers its multimedia “360 Solution” program providing tailored online, mobile, print and search-engine solutions that include results analysis and strategy updates.
Mr. Billot “comes a lot more out of the digital media world than he does out of the Yellow Pages business,” notes Charles Laughlin of BIA/Kelsey, a research and advisory firm that focuses on local advertising. And, he adds, Yellow is the relatively good financial shape after a restructuring.
Net debt at the end of September, 2013, stood at $601-million, down from $782-million at the end of the year before that.
Under former CEO Marc Tellier, Yellow sold off assets, such as classified publisher Trader Corporation, and went through a painful restructuring that left it with a more manageable debt load.
In November, 2013, the company announced a head-count reduction of 300 people as it continues to implement rigorous cost-cutting measures.
One key to Yellow’s success – its salesforce – has also been undergoing change. “It appears that Yellow is in the mid to late stages of the transformation of its sales team from one that was primarily print order-takers to more pro-active marketing consultants,” Canaccord Genuity analyst Aravinda Galappatthige said in a recent research report.
“There has been a great degree of reinvestment and churn in the team during this process. We believe a well-equipped, well trained sales team opens up major opportunities for Yellow Media going forward: for the million plus [small- and medium-sized enterprises] in Canada.”