Local Insight Yellow Pages Forces Advertising Contract Extensions

Local Insight Yellow Pages is informing its advertisers that their contracts are being forcibly extended – at their existing monthly rates – for three additional months. 140 of the company’s 900 directories are being delayed.

While the company says the move is to allow time to install new printing equipment, it is also obvious that the delay will prevent advertisers who wished to cut back their ads from doing so.  In Lincoln, the billing of yellow page directory advertising is linked to your telephone service.  If you refuse to pay the bill, Windstream will cut off your phones.

In effect, the delay will allow Local Insight to delay what would most certainly be cuts in small businesses yellow pages advertising budgets.

A few weeks ago I received a letter form Local Insight Yellow Pages informing me that they were delaying the release of their 2010 book by three months.  Instead of its normal release in November 2009, the 2010 book was being pushed back to February of 2010.

Printing Equipment Delay Does Not Make Sense

The delay of the 2010 book and the subsequent contract extensions from the 2009 book is explained by Local Insight as the need to install modernized printing equipment to print the directories.

However, a January 2008 press release from Quebecor, the company that prints over half of Local Insight’s phone books, indicates that they just upped their printing volume in January of 2008.  Since the Lincoln, Nebraska directory is printed in October, that means that no Lincoln directory has been printed under the new agreement with Quebecor to date.  Why replace equipment you have never used to print a book?

A more likely explanation is that they needed stable revenue and earnings to complete the merger of their Local Insight directory and regatta online directory into their other division, the Berry Company.  Without adverting contracts, a yellow pages company is worthless.

Yellow Page Advertising is Dying – Faster Now than Ever

Yellow page advertising has been losing ground rapidly to the host of online alternatives that are available to potential customers, the need for businesses to advertise online, and their failure to assemble any meaningful online presence themselves.

Local Insight specializes in phone book sin smaller markets like Lincoln, NE.  These smaller markets have been impacted by the recession to a lesser degree, which has helped Local Insight avoid some of the revenue losses that other, larger phone books are encountering.

However, as the recession deepens and extends into those smaller markets, Local Insight stands to lose massive revenue if small businesses cut back their ads or remove them all together to opt for less-expensive online options.

A 90-day delay allows Local Insight to gain an additional fiscal quarter of revenues that business owners based on pre-recession information.  Lets put it this way…  If Local Insight expected businesses to spend more money on the next book, would they delay its publication by 3 months?

What You Can Do To Protest

As I mentioned before, if you are still in business, you have little choice but to pay the bill.  In Lincoln, NE is you fail to pay your yellow pages advertising bill, Windstream will simply disconnect your phones.

In an interview on bizjournals.com, Cincinnati business owner Vicki Bezak said:

“I think they’re really in trouble. The phone book is a dinosaur, and nobody’s using it any more,” said Vicky Bezak, exclusive marketing agent for Satisfaction Yacht Charters Inc. Bezak estimated the directory delay would cost her company $300 a month – if she pays it.

“I’m going to call Cincinnati Bell and tell them that my contract with (Local Insight) terminates on June 1, and I’m not paying the ad costs listed on my current bill because I didn’t renew it,” she said.

Ms. Bezak’s approach might be hit or miss depending on how the telephone company handles the complaint.  Local Insight also has a toll-free number that they invite any customer who fells “they are not receiving value” from their yellow pages advertisement to call.  It is not clear what the company plans to do for those customers.

If you want to give it a whirl anyway, you can call Local Insight’s toll-free number at 888-237-8570.