From the frying pan to the fire.
Being a newspaper executive is hard, but is it as hard as heading up an increasingly online-focused directory in the era of Google? While readers may still have some need for the digital offerings of newspapers, it’s hard to argue the same about the traditional offering of Sensis, Telstra’s directory business.
John Allan, former chief operating officer of The Australian, was yesterday revealed as the man Telstra chief David Thodey had picked to head Sensis, the makers of the Yellow and White Pages.
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The announcement came after a five-month search for the ideal candidate.
Allan has directory and media experience – before he worked at The Australian, he was CEO of TrueLocal.com.au. He’s going to need every ounce of expertise he can muster to stem Sensis’ decline.
Before the internet, Sensis was one of the most lucrative parts of Telstra. It had a captive market. Businesses would pay to be listed in the inches-think yearly publication, and given their customers would regularly consult the books for their phone numbers, being listed was a business necessity.
And then Google came along. If you Google a business name these days, you’ll get to their website, and a phone number, in seconds. Even if they don’t have a website, it’s free to list a business on Google Places. Businesses have no need to use (and pay) Sensis to be found when it takes one or two clicks for customers to find them via Google.
Sensis missed the world changing. Although it eventually put its services online, it didn’t compete in that space before Google’s dominance became complete.
However, before this year, the business division was still holding onto its profits. In the 2010-2011 financial year, Sensis’ income only declined 5.9%. But then, in the first half of the 2012 financial year, Sensis sales fell a shocking 24.1%. The company noted this March that “the advertising and directories market’s shift to digital marketing is occurring faster than we expected.”
Sensis’ long-serving (now former) CEO Bruce Akhurst announced a revival strategy. The plan has led it to focus on being a one-stop online marketer for small businesses, offering website development and search engine optimisation (5000 companies had signed up by March).
Sensis is also doing some interesting things in the high-tech space. For example, it signed a deal with Media Tuners, a US company that is developing voice-activated software that will run in cars. The idea is that the product will be integrated with Sensis’ Whereis Maps database, so drivers can speak to their dashboard and get the directions they need without pressing a button.
Nonetheless, it will take a lot to stem Sensis’ bleeding. Its dilemma is similar to those faced by newspapers – online rates are only a fraction of what can be charged for print. And it has a fierce, firmly entrenched rival in Google.
Can Allan stem the Sensis bleeding and preserve the half-billion in revenue it brings to Telstra’s coffers?
He might, but he’s got two huge challenges ahead of him, according to tech analysts LeadingCompany contacted today.