|Agency: Schkelderup-Lund, Bendixen and Partners||Author: Haldor Haarvik|
There's Nothing the Yellow Pages Can't Help You With
Or how advertising generated value for users, employees, advertisers and owners
A direct translation of the payoff is difficult. The meaning is however that Yellow Pages can help you with everything. The context will hopefully make it clear the way this slogan was used. Advertising has helped the owner Telenor Media with (almost) everything with regards to Yellow Pages.
In a speech on 1 May 1995, Labour Party prime minister, Gro Harlem Brundtland, made the following statement: '. . . or to borrow a phrase from advertising. There is only one thing the Labour Party cannot help you with the opposition.
Although it is flattering that the Prime Minister in this way demonstrates how an advertising slogan has become part of everyday language, it is not the Norwegian people who have been the primary target group for this advertising. The target group has been existing and potential advertisers in the Yellow Pages, i.e. those responsible for advertising in small and medium sized companies across the country. What characterizes them (e.g. florists, plumbers, and hairdressers), is that they are not professional advertisers. An ad in Yellow Pages is often the only form of mass media advertising they use. In many respects, the target group resembles ordinary consumers more than professional advertisers in the way they process advertising information.
We will demonstrate that, through advertising, we have achieved our target of having advertisers perceive Yellow Pages as so important for ordinary consumers that they had to place an ad there almost at any cost. We will further demonstrate how the advertising has had an effect on users of Yellow Pages. Since users do not pay for the product, the major economic effect from advertising stems from advertisers. It is here that we find the pure economic effect.
Advertising for Yellow Pages has had two main effects:
- The volume of ads has increased by 135% in the period from 1994 to 1999.
- Telenor Media has in the same period been able to increase its prices by 7.7% annually.
We will demonstrate how the advertising has been a cornerstone in a longterm strategy which generated increased value in excess of NOK 800 million. In addition to this, the advertising has benefited in several other ways. It has made it easier to recruit skilled personnel, to boost motivation among the sales force and throughout the organisation, and enhance the position of Telenor Media within Telenor.
In this paper, due to space limitations, we cannot go into details with respect to every activity or report all results. Building brand equity over a long period of time gives the company a sustainable competitive edge, but at the same time it is challenging to demonstrate advertising effectiveness. We will therefore concentrate on key elements. The demonstration of the effectiveness of advertising must be seen as the sum of all indicators, all of them important antecedents for an increase in financial value.
Access to data represents a particular challenge in this category. No panel data are available. Traditional models used in fastmoving consumer goods do not apply.
In 1993, the situation was as follows.
According to advertisers
- Yellow Pages is a low interest medium, even among those who advertised there.
- Advertisers feel they know enough about the product.
- Yellow Pages is not included in the media plan (Source: Feedback).
According to users
- Users do not want rational information about Yellow Pages.
- It is difficult to reach users in a position where they will process information, due to lack of interest in the product.
- Users do not accept that Yellow Pages should spend money on advertising.
According to employees
- Lack of pride and motivation among sales representatives.
- Difficulty in recruiting personnel among graduates.
- Lack of acceptance of, and commitment to, market activities in the organisation.
Yellow Pages was in need of higher brand salience. It was important to be a part of advertiser consideration set among media. Advertising targeted toward endusers could easily be rejected due to lack of relevance. Competitors in this category had an unwelcome media focus, as a result of questionable business methods applied over the years. We needed to increase trust. A demanding challenge indeed, the question was, could advertising help in any way?
SETTING NEW GOALS
Yellow Pages is not a traditional product. Users get the catalogue delivered to their door at no cost. The vision from top management in Telenor Media was clear. They wanted help in building a strong brand. How could this be accomplished? Three areas were seen as especially important:
- Increased brand awareness and brand knowledge. Qualitative and quantitative research prior to 1994 showed that Yellow Pages had a low shareofmind. Associations with the brand were few, e.g. predominantly telephone catalogue and trade register. We had to increase brand awareness and brand salience.
- Increased use, and perceived value of medium. If Telenor Media were to sell more ads at a higher price, it was important to change advertisers' perceptions. An ad in Yellow Pages had to be looked upon as an important place to be, if you were to attract customers. Increasing the perception of how important Yellow Pages was as an information source when consumers chose among retailers was important.
- Increased motivation among employees. It was crucial to enhance pride in the sales force. One of the communication tasks was to support the sales force in their everyday job. An important sideeffect would be a higher degree of implementation of marketing activities at the customer front.
The advertising should clearly position Yellow Pages and be instrumental in achieving results in three areas: brand salience, perception of use and internal motivation.
WHAT ADVERTISING CAN DO
How do you go about making effective advertising for a product in this particular case a product nobody is interested in? Who shall the target group be? How do we increase awareness? What should the message be?
Initially, we had to make a strategic choice regarding target group. A choice that turned out to have important long term implications:
Target advertisers directly
This is a common practice in many categories. Selection among communication tools would be different. Direct marketing would be more costeffective. The question remains what about brand salience and other communication objectives? Could we possibly achieve the necessary change in perception using direct marketing?
This would allow the use of communication tools suitable for building a strong brand. We could increase share of mind. In addition, research showed these advertisers to process advertising information similar to normal consumers. By targeting endusers, we could influence advertisers very effectively. To conclude, targeting endusers made it easier to convince advertisers that Yellow Pages was an important medium. It was, however, important to develop the communication strategy further.
Remind users of Yellow Pages. Increase share of mind. Increase the willingness of consumers to process information about the product.
Insight about users
Sociological demographic: men and women aged 25 and above. They have an above average income. They have university education. They live in urban areas.
Psychographic: modern people want to reduce time and effort related to the purchase of goods and services. They know that it is possible to make more educated decisions based on available information prior to purchase. They have not developed a fixed pattern related to the use of information sources (source: Forbruker og Media).
Only when I use Yellow Pages can I get access to simple and comprehensive information that makes me a more educated consumer.
Proof of brand claim
It is comprehensive, and covers all relevant categories, regions and outlets.
It is smart, helpful, entertaining and effective. It saves you money.
Telenor Media decided initially to spend most of their marketing budget sponsoring the weather forecast on TV2. This added another challenge to the list: how to deliver an effective advertising message in 10 seconds for an unknown brand.1 The use of the communication tool was not necessarily optimal concerning communication objectives to hand.
WHAT WE ENDED UP DOING
Although a programme sponsor gets high frequency, results from earlier attempts showed a low success rate concerning attention to the sponsor. On average, attention ended up in the range between 10 and 20% (source: Carat). This would not be satisfactory. We had to get a higher share of mind using the same amount of money. Noone had developed a clear link between the programme and the sponsoring brand. At this point in time, this form of advertising was a relatively new phenomenon in Norway.
Budget constraints made it clear that we needed an integrated branding idea, useful in all channels. The branding idea had to be relevant and credible for the brand and have a clear link to the programme. In addition, it should work on other channels as well (not related to weather sponsorship). The branding idea should be an inspiration in all forms of communication.
We developed the following payoff: 'The only thing Yellow Pages cannot help you with is the weather.' The message satisfies the criteria: relevant, credible and with a clear link between brand and programme. However the claim is very strong, which means that the execution has to be 'overthetop' to make it stick.
Advertising for the main brand, Yellow Pages, can be divided into the following main areas.
The 'Yellow Pages Man' is launched, 30 advertising commercials starring the 'Yellow Pages Man', two commercials are made 'Goldfish' and 'Date'.
The 10 first commercials show how the 'Yellow Pages Man' ingeniously solved problems related to bad weather. The task was to increase attention, and to start expanding the brand territory.
In the second part of the year, we launched 20 new commercials. Since most people associated Yellow Pages with categories like plumbers, painters, etc., it was important to broaden usage situations. We introduced unexpected products and services you could look up in Yellow Pages. The form is consistent over time. The 'Yellow Pages Man' has a problem, which he solves in an unexpected and creative way.
During commercial breaks, a new approach was used. A problem was established before the weather report, and the solution was given directly after it finished.
In 1996, another 26 commercials were made. Since the audience knew the code by that time, we could stretch the plots even further with respect to the types of problem and unexpectedly creative solutions.
Commercials for television related to sponsorship
To be able to broaden the communication from the brand, we made two ordinary TV commercials which were shown throughout the year. They were based on the same branding idea. The 'Yellow Pages Man' played a major part. He was soon becoming an important brand property, adding values like friendly and helpful. The commercials are called 'Date' and 'Goldfish'. Research showed that sponsoring had contributed to awareness, and the TV commercials gained the brand more depth and consumer involvement.
End of programme sponsoring
In 1996, it was decided to end the association with the weather report. Awareness was hard to increase further in a costeffective way. A contributing factor was new regulations, which reduced the possibilities of making effective advertising related to programme sponsoring. Limitations on message and form were set. It was time to say goodbye. Change of main communication vehicle made us rewrite the payoff to make it less weather dependent. The new payoff became: 'There is nothing Yellow Pages cannot help you with'.
Now we entered a critical stage. What would we lose as a result of lower media frequency? What about attention, and brand salience?
At the same period of time we altered the payoff, we expanded situations to focus on the advertising, from crises and emergencies to everyday activities and nicer things in life.
Kenneth Dean had limitations when we wanted to develop the brand further. He had become an icon, and a major brand property, but it was time to move on. The communication concept, however, stayed the same. A combination of problems, and at the end always an unexpected and entertaining solution. In 1997, we made three commercials lasting 30 seconds, and three short ones to keep up frequency. The commercials are called 'Pole', 'Typewriter', and 'Harley'.
In 1998, we made 'Reunion', which was more emotional and focused on a pleasant area where Yellow Pages can be put to good use.
Print and outdoor media
In 1995 and 1996, we produced print advertisements related to special events such as national holidays. As these events normally take place outdoors, they are weatherdependent, and we again demonstrated the usefulness of Yellow Pages. In 1998 and 1999, we introduced riddles in newspaper ads. They all had solutions in the form of a category in Yellow Pages. Through the years 1995 to 1999 we employed solely outdoor media in connection with sales campaigns, focusing mainly on urban areas.
EFFECTS OF SPONSORING AND ADVERTISING
In January 1994 we got started (Figure 1). In December 1993, Viking car tyres had gained a small foothold, but what is more striking is the number of people who claimed not to know who the weather sponsor was. In March 1994, Yellow Pages had already passed Viking, they scored 14% and 6% respectively in unaided sponsor awareness. So, what brand associations are linked to the brand at this stage?
Associations linked to Yellow Pages prior to sponsoring
At this point in time, Yellow Pages has few associations linked to its brand. Some perceive it to be a register for retailers in different categories. For the majority, it is just another telephone book (Figure 2).
Associations linked to Yellow Pages in 1998
In 1998, a test of brand associations was performed. This study shows that the advertising has created a rich brand personality. According to one of the users:
'Yellow Pages should not be dull. Everybody sees a phone book as something boring. This one is yellow, bright and fresh. Maybe the advertising has been a tool to freshen it up a little bit?' 2 (Quote from focus groups. Source: Gallup)
Some of the associations linked to the brand are (source: Gallup):
Used by everybody
This is an abstract of some of the associations linked to the brand. Some of the associations are intrinsic cues directly related to the physical product, and others are extrinsic cues based on inference from advertising.
The brand personality is being described as: he is good at dealing with practicalities, he knows a lot, he can be relied upon, he is somewhat materialistic, and will be missed if he went away. He has many pleasant personality traits. It would be nice to spend some time with him. He is easygoing, and has good relationships with other people.
Increase in awareness through the period of advertising
As we can see from Figure 3, there is a considerable growth in awareness during the period when Yellow Pages was sponsoring the weather forecast. In the last period reported (March 1996), 91% of the population knows that Yellow Pages is the sponsor. As a comparison, the most successful other advertiser up to this point scored unaided awareness up to 18%, spending the same amount of money. At this point, it was no longer costeffective to build awareness any higher.
Evaluation of Advertising Among Users
Users perceived the message, 'Yellow Pages can help you with everything except the weather', as relevant and credible. If it did not show up the viewer would wonder where the weather forecast had got to. A dominant characteristic differentiation for Yellow Pages, compared with other sponsors, is the clear link between programme and sponsor (source: Nielsen Norway 1996).
Evaluation of advertising among customers
In the category 'telephone catalogues', Yellow Pages was perceived to be the only trustworthy alternative. None of the others were seen as direct competitors. Advertisers saw Yellow Pages as an effective medium for attracting customers. Some even had empirical data supporting increase in traffic after buying an ad there (source: ScanFact 1997). The sponsorship and the advertising had added trust and reliability to the brand. The message had got through to advertisers and users. It was perceived as relevant and credible. To sum up, advertising had given the brand a rich personality.
DID WE GET THERE?
All advertising that works in the long run, also works in the short run. This is one of the lessons from advocates of the 'strongforce' school of advertising (among them Jon Phillip Jones is perhaps the most well known). 'Strongforce' theory claims that for advertising to be effective it has to convince people, and sales volumes will change as a direct function of advertising. 'Weakforce' on the other hand claims that advertising works differently. The right message and execution will primarily strengthen loyalty among users, as a best case scenario, and not shift market share in the long run. Anyway, the immediate results after the advertising was launched were:
- Brand awareness went up.
- It became much easier to recruit graduates as sales representatives.
- There was an increase in sales of advertising.
In 1994, while the media market showed a general increase of 10%, Yellow Pages increased sales by 21%.
The increase in turnover in the first year was NOK 42,730,000. The highest increase was in 1996. In this year the growth was NOK 66,227,000. On average, the growth is around NOK 40 million every year, as we can see from Figure 4.
The number of customers grew from 40,878 in 1993 to 47,177 in 1999. The growth rate increases towards the end of the period (Figure 5).
Income per customer did grow more in the beginning (e.g. 1994, 1995 and 1996) than in the later years. This is to be expected, as market penetration implies that we are reaching fewer and fewer customers as we move on. Another main characteristic of a strong brand is the possibility of charging a premium price in the market. Also, see Figure 6.
As we can see in Figure 7, we are able to charge customers a higher price every year throughout the period. The largest increases are in 1995 and 1996. As a comparison, the general price increase in Norway varied between 2.6% and 1.4% in the same period.
OTHER REPORTS ON COMMUNICATION EFFECTS
As a part of delivery of Yellow Pages in 1998 a questionnaire was enclosed. Among other elements, aided advertising awareness and liking were measured. 'Harley' and 'Typewriter' achieved an aided advertising awareness of 80.8% and 84.5% respectively. 34,932 persons returned the questionnaire, which shows a remarkable involvement in the brand. 46% answered that they liked 'Typewriter' 'extremely well', for 'Harley' the result was 37.2%.
FINANCIAL RESULTS FROM THE ADVERTISING
Yellow Pages has, in the period covered in this paper, increased its turnover a little less than NOK 300,000 million. Yellow Pages was launched on the Internet, generating an income of NOK 40 million during 6 months of operation. If we assume the profit to be 20% on turnover, which is not an inflated estimate in this category (it is more on the conservative side), would one way of estimating financial results from advertising be to look at how much we could get from the brand in the market? Telenor is not yet a public company, so no price exists in the market today.
Using a traditional financial approach we look at turnover and profit, and can then estimate brand value.
'Telenor sells the catalogue companies Lokaldelen in Norden AB and Telenor Företagsinfo AB (TFI) to Tele Danmark for SEK 1,030 million. The turnover in these companies are SEK 372 million in 1998. Their profit was SEK 78 million (1998)' (source: Telenor).
As we can see from the quote above, Tele Danmark pay 2.77 times the turnover, and make 13.21 times profit. Emphasis on turnover or profit varies from country to country. Focusing on profits is considered to be more risk adverse. If the result is 80 million every year for 5 years, does this equal getting paid NOK 400 million today? A person with some knowledge of finance would prefer NOK 400 million today to the alternative. The target with respect to return on investment would vary depending on how much risk one is willing to accept. Higher return on investment is normally correlated with higher risk. Risk in this case could be new entrants, or technological changes. Leverage exists in the form of brand extensions. Yellow Pages can grow on the Internet, or one could exploit the customer base to further increase revenues from existing customers.
If we assume profits to be 20% of turnover, use the same method of valuation as already described, and relate value to the price obtained from the sales to Tele Danmark, advertising has generated value of over NOK 800,000 million.
OTHER SIGNS OF INCREASE IN BRAND STRENGTH
A strong brand can support extensions better than a weak brand. A main strategy for Telenor Media is to deliver valueadding services to existing customers. Products and services shall be made available at a lower cost, using new channels of distribution. Focuses on convenience are dominant throughout the organisation. Yellow Pages' strong foothold on the Internet tells us that the brand is useful within the overall strategy, and can be used in penetrating new markets.
Yellow Pages and its success story are known to everybody. Its advertising is famous and has boosted pride in the organisation, as well as helped sales representatives sell their brand with confidence.
Over the year, more qualified people are applying for a position at Telenor Media. Partly as a result of advertising, this provides more positive signals about our work there.
New entrants in the category have had a tough time because of the brand strength of Yellow Pages. Storbyguiden was backed by resources, but failed when sales were under budget. The owners tried to sell it off eventually. A strong brand has been an effective defence against competition.
The advertising has been the engine in all internal and external communication. The advertising got attention, and was liked by advertisers and users. The advertising has given employees confidence and added confidence in the brand and organisation. We have demonstrated that large financial values have been created, as a result of characteristic and relevant advertising over a period of 6 years. Increased brand strength has given Telenor Media an opportunity to grow in new categories. Internet represents one such unique opportunity. We have learned that an effective way of using advertising is to target endusers, although the aim was to sell more advertisements in Yellow Pages. We have also exploited the synergy of using a branding idea that worked in all communication channels.
The advertising has pushed Yellow Pages from being a grey telephone book in a business portrayed as being crooked, to becoming a strong brand with millions in profit every year. This brand strength has made it more difficult for new entrants to achieve success in the category.
NOTES & EXHIBITS
FIGURE 1: UNAIDED SPONSOR AWARENESS, DECEMBER 1993
FIGURE 2: UNAIDED SPONTANEOUS ASSOCIATIONS LINKED TO YELLOW PAGES IN DECMEBER 1993 AND MARCH 1994
FIGURE 3: DEVELOPMENT IN SPONSOR AWARENESS
FIGURE 4: INCOME FROM SALES OF ADVERTISEMENTS (TURNOVER 1989 TO 1999)
FIGURE 5: NUMBER OF CUSTOMERS FROM 1993 TO 1999
FIGURE 6: INCOME PER CUSTOMER FROM 1993 TO 1999
FIGURE 7: PRICE INCREASE FROM 1994 TO 1999. INCREASE IN PERCENTAGES ANNUALLY