Understanding AT&T/SBC's New Yellow Pages Discount Policies          
By Michael Warner

AT&T(formerly SBC) is merging with Bell South to form a coast to coast Yellow Page giant. The problem for the expanded AT&T Yellow Pages is the fact that sales are declining at 5% a year while internet revenue from local advertisers is increasing 27% a year. To stop this bleeding and to capture the internet revenue AT&T has established a discount program for their new and currant Yellow Page advertisers and is pushing businesses to list on AT&T/Bell South's YellowPages.com.

My Yellow Page advertising agency has many AT&T advertisers as clients, so we faithfully follow discount options for them. The new discount plan is completely different from anything offered before. Up till now AT&T advertisers could negotiate their own discounts with their SBC (now AT&T)Yellow Page sales rep. This would often mean businesses with the same ad size and features would pay wildly different prices.

The new AT&T discount program is designed to standardize the pricing for all advertisers. The discounts can be as much as 50% or as little as 15% off of an ads full price. Most of my clients are in California and Nevada so the examples I show are from California, but the pricing policies are the same in all AT&T directory areas.

The one thing that is the universal in all of AT&T areas is to receive a discount rate for your ad you have to spend more than you did last year. You have to spend one dollar more for a 15% discount, 10% more for a 35% discount, or 20% more for a 50% discount (Some discount if you end up spending more. )

The amounts of the discounts vary from directory to directory. The more successful AT&T is at selling new advertising and renewing existing advertising in a given directory, the less the discounts. Sonoma County's AT&T directory discounts are considerably less than San Jose's, which indicates that San Jose is a tougher area for AT&T to sell advertising in. (AT&T has competition from both Verizon and Valley Yellow Pages in San Jose, but only from Valley Yellow Pages in Sonoma.)

Here is AT&T's 2006/07 discount program:

Full price : You pay full rate for your ad.   In every display ad size there are three different prices: black and yellow with or without spot color, white knockout with spot color, and white knockout process color. The only people paying full price for a display ad are long-time advertisers who have not changed their ad in at least three years, and advertisers who have downsized their ad.

Value Ad Enhanced (VAE): This is the largest discount offered (percentage off of the full price of an ad.) To be eligible for this discount you must increase spending by 20% over last year's contract. The amount of the discount varies from directory to directory. In Contra Costa Central and San Jose the VAE discount is 50%, Simi Valley 55%, and San Diego 45% off of full rate.

Value Ad Pricing (VAP) : To be eligible for this discount you must increase spending by 10% over last year's contract. This discount is available in all directories but the percent off of full rate varies. In San Jose the VAP discount is 40% off the full rate for your ad size and features.   In Sonoma, the VAP discount is 35%, Bakersfield 30%, San Diego 35% and Simi Valley 45% off of full rate.

Value Ad Loyalty (VAL) : This becomes the de facto full price for all display ads and in-column ads. All advertisers are offered this discount if they maintain last years contract revenue. The VAL discount is 15% off of full rate. If the rate you're paying for your ad is 15% or more below full rate, you will be offered a Loyalty renewal. In other words you will always pay 15% off of the full price for your ad as long you spend at least $1 more than last year. If you want to reduce what you are spending by removing color or reducing size you will receive no discount and pay full rate for your advertising.

If you are paying full rate now for your ad you will be offered a Loyalty (15% off) discount for your ad. Does that mean you will save 15% on your AT&T advertising? Of course not. You have to spend $1 dollar more than last year to get the 15% discount. You accomplish this by buying additional advertising in the same directory.

Heading Growth (H.G.) : Any heading not in AT&T's top one hundred revenue-producing headings with no ad larger than a DHC (quarter page) receives 50% off of full rate.   

The rules to be eligible for any discount offers :

To receive any discount you have to buy an ad in AT&T's internet YellowPages.com. The minimum cost is $40 a month, but most ads run from $79 to $350 a month. Every discount offer depends upon the advertiser spending more every year in the Yellow Pages and maintaining their internet listing.

  One thing to consideration if selecting either the VAE or the VAP discount is what will your advertising eventually cost. There is no guaranteed price that either a VAE or VAP discounted ad will cost next year. I have asked an AT&T sales manager what the increase will be next year and he said he wasn't sure. Historically AT&T/SBC has increased first year discounts by 12% in following years till full rate (now Loyalty rate) is reached.

The problem for all AT&T advertisers is that there are no price lists available. You are at the mercy of the sales rep to tell you what an ad costs. Do you think a sales person would fib about a price if it would increase their commission?

  There are strategies that can enable you to take advantage of AT&T's mysterious and confusing new discounts without spending more. If you would like to explore some of the possibilities, or would like to know what is in your AT&T price list contact me at my website, www.DrYellowPage.com, or e-mail me at Michael@DrYellowPage.com.   Copyright © 2006 by Michael Warner.

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