Some of you might have heard the news that Dex One announced they became a Google AdWords “Certified Partner” this week.  This seems to be the trend all major yellow page publishers are moving towards as their print directory ad sales are decreasing each year.  The question many wonder though, will a partnership with almighty Google be enough to stave off eventually going out of business.

Becoming a Certified Partner is a good step for Dex One and all of the other publishers.  However, I believe they are putting a bit too much hope in this one service to help them grow their digital revenues by 50% for the next two year.  The partnership is not as exclusive as Dex One would lead you to believe (take a look at the entire list of available ‘Partners’ in your area here).  Additionally, not everyone is ready to jump on the SEM bandwagon just yet when there are so many other options to explore.  Believe it or not, most SMB are still trying to get a handle on establishing a strong web presence while simultaneously exploring all of the less expensive and/or free options such as social media.

I will be the first to admit that Dex One and other publishers such as Super Media, Berry and AT&T have one built in advantage working for them; the yellow page publishers already have yearly appointments scheduled with their advertisers wherein they can bring this option to the advertiser’s attention. (See an earlier post on how yellow page sales reps are positioning their new products)  This annual sales call will give them an inherent advantage over all of the other SEM firms that may or may not be a Certified Partner of Google.  Now, if you have ever tried to implement your own AdWords campaign, or even hired another firm to do so for you, you know that setting up the account and getting it started is the easy part.  The difficult aspect AdWords or any other SEM is the ongoing management of your campaign and tweaking your keywords to achieve the maximum ROI.  This brings us to the inherent problem the publishers have to face; selling the product will be easy but managing it to the point the advertiser is happy and renews it next year will be difficult.

The danger zone for the directory publishers is going to be maintaining their advertiser’s SEM account to maximize ROI while maintaining cost margins to make offering the product sensible to them.  Look at this way: Dex One has to pay the sales rep who sold the product a commission, pay the digital consultant to set up the account, pay the outside vendor (someone like Marchex for example) to manage the account because they don’t have the capital to hire enough knowledgeable account managers, cover the salaries of their top heavy organization, cover the losses from the print advertising side of the business and still show a profit.  That is a lot of money that could go to buying more clicks for the advertiser who will be disappointed that it is being spent other ways.  If you like to see sales reps squirm, here is a fun activity for you: ask your yellow page sales rep what percentage of your budget they keep if you purchase an SEM product from them.  Every SEM firm I have spoke with has been very open with their margins and how much they actually spend – usually 10-12% of your budget.  I have never gotten an answer from a publisher rep. (If you can provide this answer, with verifiable proof, this author will treat you to fancy lunch at the local Mexican restaurant just down the road from his office!  How can you pass this offer up?)

If these new ‘multimedia’ sales rep can get the advertiser to see them as more than a print rep, selling an SEM product the first year should not be a problem.  In fact, it should not be unexpected for Dex One to go beyond the sales projections for the first year.  Having the customer maintain their ‘digital spend’ will be the difficult part as the publishers are not currently designed for ongoing management of an advertiser’s SEM account.  What will eventually happen is the advertiser will see that SEM works but becomes unhappy with the true cost of each click, thus turning to an outside SEM firm with lower cost margins.