Likely Result Of San Francisco’s Yellow Page Law

The Mayor of San Francisco acknowledged that many people “use yellow pages” but signed into law a bill that will require residents to opt-in to receive the phone book.

The logic being that those folks who still use it can opt-in and receive it. This is one of those weird logic things that makes you wonder if the world has gotten too complicated for politicians.

Where they will go to opt-in? How will they be informed of this?

And here is the big question? Is the City of San Francisco going to take on the expense of publishing the book? Certainly, creating this law will remove the profit from creating and distributing a phone book. So, if not the city, who? I genuinely believe, many people believe there will be a phone book to opt into following this law. Obviously, you can’t pass a law that sucks the profit out of a business and expect the business to continue to operate. There are likely many who have that expectation, probably even the mayor.

It’s ok for you and me to fail to recognize things like that, but not for elected officials. Again, it makes me wonder if the world is too complicated for politicians.

I am an interested party. I am a partner in an agency that sells internet advertising and yellow pages. Our yellow page business is in decline and will continue to decline, likely to Zero. The only question is when. Our internet marketing business is growing rapidly. As our clients spend less on yellow pages they will likely spend more on internet. It’s heads my client wins, and tails my client wins. As long as, and here is the major point, the decline happens naturally. If it doesn’t happen at a pace dictated by the free market system, there will be consequences for the local economy.

Let’s Look at it from the point of view of a small business that I am familiar with in the the bay area. This business has a sophisticated internet marketing program and a 6 figure yellow page spend. The yellow page spend represents hundreds of calls from new customers each month and the largest portion of the advertising budget.

If this law takes effect, he will have to cancel his yellow pages. Although, yellow pages provides a high volume of calls, the cost per call is much higher than on the internet and I can’t see how it could remain profitable with the drop in usage an opt-in program would cause.

With the volume of new customers reduced so much, he would be forced to lay workers off. I guess he would see a bump in internet calls but not nearly enough to offset the loss in call volume. My guess would 5-7 guys would be laid off.

I think most other small businesses in the area that advertise in those books would make similar decisions. Which means more layoffs from small business.

Now I’m going to guess and say yellow pages in the bay area is a 20 million dollar industry, give or take 10 million. Does it make sense to just take this money out of the economy. What does it mean to the people who sell the ads?, deliver the books?, recycle the paper?, sell recycled paper? and on and on. It means lost jobs, lost revenue etc.

All of this will happen eventually, as progress slowly and steadily advances. There is no need for government to interfere. They’re not selling crack, their selling ads that contribute millions to the local economy. I understand why the casual observer thinks this is a good idea. They don’t have access to the data one would need to make an informed decision. Elected officials do have access to the numbers and should be able to make better decisions.

In a post related to the Seattle law, Treehugger.com asks “Whether Yellow Pages are a right?.”

And the answer is of course! Do I not have the right to sell a legal product and earn a living? Do my clients have the right to advertise their business in a medium that is effective and helps them grow? Do people have the right to access local business information in way they find most convenient?

I think this decision is being made a group of people who think they are smarter than other people and either have never looked at the numbers or have chosen to ignore them.

The yellow page industry filed a lawsuit last month. Scary how quickly a government decision can force a business to start paying big money to lawyers.

The likely result of San Francisco’s Yellow Page Law? Everyone loses but the lawyers. What else is new? (For those wondering, being relieved of the burden of having to recycle your yellow pages doesn’t qualify as a win. Not when the stakes are this high. )