R.H. Donnelley 1998 Annual Report
Directory Advertising Services
Bell Atlantic and Sprint:
Directory Advertising Services includes two long-standing and strong relationships: Donnelley's businesses with Bell Atlantic and Sprint.
Donnelley Builds on a Foundation
of Strong Relationships
In 1998, Bell Atlantic awarded R.H.Donnelley the contract to service the Buffalo, N.Y., (above) and North Country markets in upstate New York. Sprint's Orlando, Fla., market (below) is another high-growth area served by R.H.Donnelley.
"Nineteen ninety-eight was a year of substantial progress in both the Bell Atlantic and Sprint businesses," says Dave Swanson, president of Directory Services. "The introduction of new products and pricing plans, as well as the acquisition of important new markets, have set the stage for continued future success."
Bell Atlantic Relationship
Positioned for GrowthThe relationship between R.H. Donnelley and Bell Atlantic is one of the most enduring in the industry, tracing its roots to a contract signed with New York Telephone in 1909. Donnelley currently serves as sales agent for the 119 Bell Atlantic yellow pages directories in New York State.
The Bell Atlantic relationship posted mixed results in 1998. While sales were below expectations for certain New York City area directories, the year was highlighted by Bell Atlantic's decision to award R.H. Donnelley with the contract to service the Buffalo and North Country markets in upstate New York. The agreement adds 26 directories to RHD's coverage, significantly expanding Donnelley's alliance with Bell Atlantic.
"Winning this contract was a tremendous boost for R.H. Donnelley," says Swanson. "Bell Atlantic delivered a strong vote of confidence in RHD's ability to serve its customers."
Achieving future growth in the Bell Atlantic markets requires meeting customers' needs with new value-added products. In 1998, the foundation was laid for delivering multiple-media solutions to Bell Atlantic customers by adding Internet and cable television advertising to our highly productive sales channel for print yellow pages. These new and exciting options were introduced in several Bell Atlantic markets last year, with further expansion planned for 1999. In a remarkably short time, Donnelley's Bell Atlantic sales organization already has become highly effective in selling Web sites. In addition, sales of yellow pages cable television advertising (YPTV®) packages met or exceeded objectives in 80 percent of the markets. YPTV is an innovative multiple-media product that combines yellow pages advertising with local cable TV spots.
Sprint Posts Strong Results
R.H. Donnelley currently provides sales, marketing and publishing services for 42 Sprint directories in Florida, Nevada, North Carolina and Virginia. Donnelley's Sprint sales team posted strong results in 1998, with sales up 7.7 percent, or about 3.5 points above the industry average. Sales growth exceeded expectations in all markets, led by an especially strong year in Las Vegas, which posted double-digit gains for the fifth consecutive year. Over the last five years, the Sprint sales team has been a consistently strong performer, generating average annual sales growth of 7.9 percent. Value-added offerings, including YPTV, were successfully introduced in two Sprint markets in 1998, following a test-marketing effort in 1997. In early 1999, Donnelley began selling Web advertising in Sprint's Las Vegas market through a relationship with InfoSpace.com.
Strategy for Growth
Donnelley's enduring relationships with Bell Atlantic and Sprint have created solid businesses, which will grow by capitalizing on the strengths of the respective companies.
"With very strong market shares and rates of customer renewal, Donnelley intends to leverage its highly effective and efficient sales force to bring more value-added solutions to its customers," says Swanson. "Given the more than 260,000 customers in these markets and the penetration rates we are already experiencing with these new product offerings, we are excited about the future. We're bringing YPTV to more and more Bell Atlantic and Sprint customers. We're bringing more and more customers onto the Internet. That translates to more value for both the advertisers and Bell Atlantic and Sprint. So everybody wins, and that's what it's all about."
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