Print to Remain Stable Thru 2015

 

Dr. Dennis Fromholzer, in his earlier paper entitled “Calls to Yellow Pages Ads Increased at Double Digit Rates in 2011,” stated that the increased calls to Yellow Pages over the last three years are part of a longer term recovery for Yellow Pages from the Great Recession. 

 

This premise is intuitive and logical: when consumers aren’t spending, they don’t use the phone book.  But now that consumers are cautiously spending again, increasing calls to Yellow Pages advertisers support his contention.

 

His forecast for print assumes that there is an underlying downward trend in print usage, but that some usage will return as the economy recovers. This benefit from a recovering economy and the underlying downward trend will balance each other out, leading to relatively flat print usage for the next three to four years.

Everyone is aware that the past five years have been challenging and difficult: the bursting of the housing bubble in 2006, the credit crisis, and the subsequent Great Recession. Rather than bouncing back, the economy has virtually stalled. Housing prices continue downward, unemployment remains high, consumer confidence is low, and people are deferring many life events (such as marriage, having children, changing jobs, retiring, and moving) until signs of recovery are stronger.

 

Yellow Pages usage has declined during this period as well. A significant reason for Yellow Page's usage decline has been the collapse of the housing market and the corresponding $9 trillion loss of wealth. There is almost a perfect correlation between the Shiller National Housing Price Index and Yellow Pages print references. The bad news is that housing prices have not hit bottom yet - prices were down again in the first quarter of 2012. The good news is that most expect prices to hit bottom this year and then begin a long, slow recovery.

 

What can be expected in the next few years? Will usage continue its decline, or will usage return as the economy recovers and consumers start spending again? These are critical questions facing the industry with no simple answers.

 

Forecasting is a difficult business - most forecasts are nothing more than a quantification of the forecaster's underlying assumptions. Yet forecasts are critical for business planning. To cover the range of likely "futures", CRM Associates has created four usage forecast scenarios. Each scenario is discussed in detail in the appendix to Dr. Fromholzer’s paper..

To read all the findings from Dr. Dennis Fromholzer, CRM Associates, including a breakdown by headings and statistics relating to the research, click here.