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Yellow Pages Advertising

I’ve gotten more questions this past year regarding Yellow Pages advertising than at any time I can remember in the past 17 years of working with dentists. This has even been more intense in the past few months, as many renewals happen at this time of year for books being published and distributed in the spring. Here are my thoughts:

The Yellow Page industry is dying. This is a generational shift type of phenomenon due to the continued growth and popularity of cell phones and the internet.  I have two daughters, ages 28 and 22.  Both are married and have their own homes.  Neither of them has a phone book in the house.  None.  My wife asked one of them for a phone book during a recent visit.  Our daughter just laughed and pointed to the computer.

The typical offers the phone companies are making you, along with others I have seen such as “free” websites, etc., are proof of this. They are being forced to offer some type of incentive to get customers to place the same size (cost) ads as last year — or their revenue drops.  One recent example was an offer for the doctor to keep paying the same amount for his current ad ($1500 per month) and they would give him a “free” second ad in another section.  And since all Yellow Page salespersons are paid on a commission basis, they have a vested interest in selling you the biggest ad possible.  The commission basis is also the reason for the “deadlines” they push so hard.  They want you to feel pressured so you will be more likely to make a bad decision (spend more).  By the way – and sorry if I step on any toes here – but their websites are typically horrible.  And sometimes they (the phone company) will end up actually owning your URL and charge you an arm and a leg to get it back.

One promotion I have seen is a “lead tracking” offer that they are making where they calculate a “cost per lead” ($800 per month ad divided by 32 calls per month equals $25 per lead).  It would definitely be helpful to know how many calls you get as a result of your Yellow Pages ad. But just getting a call doesn’t mean anything. Does the caller make an appointment? Does he/she actually show up for the appointment? Do they accept (and pay for) treatment you recommend? The “cost per lead” is, in my opinion, a worthless analysis. The real issue is ROI. Say you spend $800 per month on the ad. Unless you can directly attribute $2400 (or more) in production per month to the Yellow Pages ad, it is a bad investment. Any advertising method or media should return a minimum 3 to 1 ratio or you should drop it.  The problem here is that you can’t just drop it — you’re stuck for a year.

I have always advocated spending about 3% of collections on an ongoing basis for advertising.Spending less generally results in business contraction. Spending more will generally result in business growth. So the 3% figure is actually a “maintain the status quo” amount. That amount of spending will generally allow you to replace those patients you normally and routinely lose for a variety of reasons (move away, die, change insurance, get mad at you, etc.). Here is an example.  Let’s assume you have a practice collecting between $135,000 and $150,000 per month — a very nice general practice.  For this type practice, 3% would be between $4000 and $4500 per month on average. Furthermore, I have also always advocated that no more than 25% of your advertising budget be spent on YP ads. So for this example, that would be in the neighborhood of $1000 per month available to budget for YP ads. In areas that have multiple books, this gets more difficult. It usually means a smaller presence in multiple books rather than a big ad in a single book.  This dilutes the impact of your marketing dollars.  If you are faced with the multiple book scenario, do these two things.  First, be sure you zealously track the ROI per book.  It is much easier to negotiate with the beloved Yellow Pages sales rep when you are armed with actual facts and figures.  Second, poll your existing patients to determine which of the books (if any) they routinely use.  Just because 3 or 4 books are delivered to a household doesn’t mean that they all get used.  Typically one gets used and the others just gather dust or get thrown away.  If there are 3 different books in your area, simply place one of each on the front counter and start asking “Which of these phone books do you most often use?”  Again, if you are prepared with these facts and figures it will put you in a better position to negotiate the rates next year.

Do you go with Full Color, Partial Color or Black and White ads? The same size color ad will probably attract more attention than the same size B&W ad. Given the choice between a larger B&W ad and a smaller color ad for the same cost, I’d go with the larger ad. But remember, these things are highly negotiable — and will likely become increasingly more negotiable as this industry declines. So I would push them for the same size ad in color at the same price as the B&W. Think about this — it really does not cost them any more to print your ad in color, if there are already other ads in color on the page.

In our current real or perceived period of economic slowness, downturn, recession, pick a term, it is imperative to not join the masses and just hunker down and wait for better times. It is time to be proactive and do more — especially in advertising. Any money you spend on advertising in this type economy will actually yield a bigger return, simply because most of your competitors will do the obvious, hunker down and try to spend less. As others do less and you do more, your advertising impact grows exponentially. You should actually see your ROI go up!  Just be sure to remember  the budget numbers above.

If you want to cut money from the Yellow Pages and spend it for other types of advertising, that would be a sound strategy. The Yellow Pages is probably not the best place to advertise specialized services such as LANAP, sedation, implants, etc. But you do need to get that message out. So if you want to decrease the Yellow Pages ad size and reallocate the money to other advertising methods, give us a call and we can lay out a plan.

Dr. Howard Farran stated in a recent Dental Town article that he was cutting Yellow Pages spending and putting it into internet advertising for his practice. He’s a pretty smart guy and seems to do fairly well. Might be something to consider.

(MG)