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The YP industry exists beneath most peoples radar, as it’s not nearly as sexy as TV or Magazine advertising. Nevertheless, is estimated to control more than 25 Billion in local advertising revenue: a chuck of change that digital search companies like Google Yahoo and Live as well as SEO companies like The Search Engine Guys are jockeying for as people continue to migrate away from print media to digital search.While large YP companies such as RH Donnelley (currently the largest Yellow Page company in the US) www.rhd.com still trade above $70 a share, their stock performance may not be the best indicator of their future. I would argue that it has far more to do with consolidations, acquisitions and internal efficiencies, and insanely high margins (good management in short) than projected growth.

Simply look at your local book — and notice that it has shrunk in size. Though in many cases, the YP industry has been able to maintain the appearance of “lots of content” by including filler content often local art or filler ads for other YP services on the individual pages, not to mention the extraneous shopping guides, golf guides, maps to museums etc. More noticeable many YP books now cover a much larger geographic scope than they did 10 years ago. Often a book will cover a whole county now, which was once covered by 3 or 4 city directories, etc. The pitch to the small business owner might be — more turf for the same buck.

But come-on is that real growth? Not in my book.

Bill Gates - founder and Chairman of Microsoft made a hefty statement in an interview this past May (simply search “Bill Gates Yellow Pages” and you can find the article in 5 seconds) when he claimed that, “Yellow Page usage amongst people below 50, will drop to near zero over the next five years.”

And while Bill Gates was discussing the future of live.com (formally MSN) and his statement could be taken as evangelism for his cause, it is very safe and reasonable to see that the future of the yellow page industry is in decline and not positioned for growth.

A few factors:

1. The Yellow Page Industry thrives on two things: usage and content.

2. Usage in decline — without question, I saw it with my own eyes over from 2002-2005. As broadband access increases, access via smart phones, more people rely on search engines for information than on the Yellow Pages.

3. Content in decline - As fewer businesses choose to ante up for display ads, content declines, as content declines so does usage. A classic chicken-egg relationship, the impulse to pick up the Yellow Pages gives way to reluctance the minute you can’t quickly find what your looking for.

4. Availability - Next time your in your own (or neighbor’s) kitchen or home office, do a quick scan for a copy of the yellow pages. Is it easier to go on the web?

5. Markets - Most trends begin in large metropolitan cities then move to smaller markets. We saw the YP industry begin to hemorrhage in places like Chicago and New York long before the suburban markets, and smaller tier 2 or tier 3 metropolitan cities like Cleveland or Milwaukee. In some markets, the YP industry will remain strong for years to come. In others, it’s long past the hemorrhage stage.

6. Age Demographics - Bill Gates honed in on age as the predominant factor. Have you met anyone under 20 who has ever used the Yellow Pages? That said, the meaty belly of the population bell curve is still the group between 30-75 in America. The boomers and their kids- where the money in America is. This group clearly uses Google. The trend in this group is not back toward the Yellow Pages, but toward Search on Google, Yahoo and Live.

7. Obscurity of the search - Still to this day, if I am looking for something very obscure (say a hardware store in a certain part of town, or a shoe repair shop) I will first search on google, then if I can’t find what I’m looking for, I will pick open the Yellow Pages. Again, the growth trend will not be back to the YP, but rather toward Google & Co. That said, there are business types that have not shifted to digital search and until they do, there will continue to be some value in the content and the usage in the YP industry.

8. Additional factors -With digital search you can receive loads more information than you can receive in a static print format. You can quickly determine which store is close to home, which plumber is nearby, etc., you can more readily educate yourself and evaluate dynamic information about the product or service you are considering. Think of a ticket broker for a sports game — in the YP era, ticket brokers would jockey for placement in the Yellow pages hoping for a phone call. Now brokers can list tickets online, display prices and manage inventory electronically — drastically reducing their overhead while creating a more efficient internal market, where they can measure and better predict how to position their future ticket purchases. The end result — it is more efficient for a ticket broker to direct buyers to their website. The phone call interaction may still prove effective as the interaction may still be preferred by the buyer… but the point here, is to establish in principle how much more effective and efficient a dynamic website is, for this particular business type, than is a static display ad in the Yellow Pages.

In conclusion - there may still be value in the YP, the question is how much? and for how much longer?

The best litmus test is to test it for yourself. Look at the numbers. Think objectively about how people search. Broad strokes do you think your neighbors and friends, colleagues and aunts would pick up the yellow pages or go online to find your business? Do you think online directories are valid? Or would you rather put your website in front of the largest pool of savvy buyers (people who use digital search).

The nice thing about the digital world is the availability of data.

Test it for yourself.

You can very quickly determine and compare how people are searching online.

Go to Aaron Walds site: www.seobook.com and use his free key word analysis tool, or pay for a subscription to Wordtracker.com. You can quickly determine search trends and estimated search volumes for particular phrases and variations online.

Then ask your local yellow page company to provide stats (they can do call tracking numbers, but might not be inclined to share the results) for your business type.

It is rare to find a designer of anything who favors function over form. When you do, the “designer” may be downgraded by their peers into “engineer” status. Most designers prioritize form over function, and to their credit they probably know full well that by the time the engineers get their hands on their design, some of the form/ style will be shaved off to save money or to appease the market research crowd. In most industries there is a natural tension between design and function. Call it tension or a difference in priority — it is easy to see in a few industries (the auto and fashion industries for starters). The gestation process is clear in the auto industry as we see the aggressively new-age prototypes referred to as “concept cars” at auto-shows in London and Chicago morph into slightly improved (on a design level) if noticeable at all models by the time the cars actually go into mass production and hit the showroom. A similar process, thankfully occurs in the fashion industry. Famous designers create aggressively edgy fashion “couture” (a word I recently learned when my wife used it while shopping for ridiculously over-priced jeans) that only 1% of 1% of the world’s population would ever wear in public or fit into for that matter. And so between the runways in Milan where they showcase these designs and the actual display rack at Nordstrom most of the edgy design is lost in favor of more salable merchandise.

I guess with cars and fashion most people are just a bit too conservative to wear or drive prototypes.

What does this have to do with websites you ask?

Quite a bit actually.

The conflict between designers and engineers is very clear in the realm of websites. Web designers are aesthetically literate. They build “beautiful” looking websites. Web designers see in terms of lines, negative space, color, font, spacing, size, etc.

Where as web engineers (SEO guys) are functionally literate. They see in terms of performance, page rank, outcome, practicality, usefulness and efficiencies.

When it comes to websites: the conflict at first glance is not as obvious as the design of a car. Automakers must wrestle with far more compromise. Mainly because of most people cannot afford to spend $85,000 on a car, or $85 at the pump. So auto makers choose fuel efficiency over horsepower, and give up voice guided navigation and hand stitched Italian leather for a compass and cloth seats (and 45 other factors) to deliver a car in a more reasonable price points. Of course this analogy is not comprehensive, luxury auto brands sacrifice precious little and favor high price-point low volume production over lower margin mass-production — and from the looks of it, theirs no-shortage of people who are willing to ante up.

Back to web-design.

At The Search Engine Guys, we have a very simple agenda. We favor performance and function over design. We are pragmatists on this issue.

What is the point of having a website if prospective clients don’t view it?

What is the point of having a beautiful website if prospective clients don’t view it?

That said, we believe you can have both. We just prioritize performance ahead of design. Once a website has achieved rank, which in our book is first page placement on Google. Then let’s focus on tweaking the look, the lines, the color, the photos etc.

We are quite happy to work with web designers and commonly work on re-designs for clients.

Unlike other industries — a website is a digitally-organic thing. It can be revised continually. It never comes off the production line. So the conflict is not a natural either or.

If you have spent any time on the web, you have seen both extremes.

On a regular basis, we come across beautiful looking websites that very well could be framed and hung on the wall in the Tate Modern in London. Sites that with well balanced negative space, visually interesting hi-res photos and lines that observe all the religiously precise 1/3rd rules that they preach in art school.

The point is, that often these sites are buried on the 132nd page of Google.

The other extreme, is one you inevitably see more often. I call this extreme the “flee market approach.” A website so packed full of links, ads, content that it emits that intense vibe you get when standing in a flee-market. It’s overwhelming. Difficult to look at. It may be SEO friendly but not easy on the eyes.

Clearly there is a balance.

At The Search Engine Guys we recognize that our clients have different priorities, different personalities, and work within different industries. We strive to understand the nuances of our individual clients and implement our proven SEO processes to achieve optimal rank. Once we achieve rank, we are able to study the performance of the site in terms of how long people are spending on various pages, etc., from there we are able to test and refine both the content and the look and feel to maximize performance.

The challenge when it comes to content vs. beauty is to not “let the tyranny of either / or ruin the possibility of both / and” how’s that for a parting cliche’ for you?