Newsletter Archive - Corner Office
A discussion with Jerry DiPippo, President - Data National
04/09/2004 - Data National is an independent Yellow Pages publisher of 132 titles operating
in 12 states in the mid-Atlantic/southern regions in both print and electronic
form. Recent expansions into several new markets such as Georgia, Florida, and
North Carolina have made Data National one of the most successful independents
in the community directory niche of the industry. The books are branded as “The
Community PhoneBook” and typically have a usable 6X9 trim size. The company’s
website (www.communityBook.com) has listings only for the areas that it publishes
in and is considered by the company as a “value-added service”.
Jerry DiPippo is a well known person in the yellow pages industry, not only because of his long tenure in the business, but also because he projects a cordial, easy going personality that makes him approachable by people of any level. What we found as we talked with him is a much deeper person, one who has a complete understanding of the inner workings of this business, one who is very direct and straightforward with his team, but also a business leader who has a clear understanding of where his business is headed. He is not afraid of change and has demonstrated a keen sense for knowing when change is needed.
We talked with Jerry about his career, the direction of his division, and the state of the industry in general.
YPT: How did you get started in the business??
I was actually educated to become a history teacher. But there wasn’t much money in teaching so I decided to get into something that paid a little more. I went to work for Volt. They put me into the parts listings program for government components. Every time a new part came out that the government purchased, they needed a part number assigned to it. I assigned numbers for about a year and half for things such as radar systems. In the early 50’s, Volt’s business was the technical writing of military manuals. In the late 60’s, I became the sole sales person to military and commercial publishing groups such as Sperry, Lockheed, Random House and Doubleday at a time when Volt was developing the first computerized composition systems.
At the time there were no editing systems – one typeset exactly what he had. One had to produce final pages to proof read. Proofs were expensive to see--something like $10 a page. We often discovered simple mistakes requiring us to redo entire pages. We realized that we needed a system to do the editing so we developed “Volt Text” – a system that used an IBM Mainframe 360 Computer. Data was entered on regular typewriters where it was converted into magnetic tape from which we then printed galley pages. Now we were able to produce columns and columns of galley’s which could be reviewed and edited before typesetting it.
I recall that the first job for computerized typesetting that we were awarded was the Mobile Travel Guide, South West edition. At the time, it was a complicated hot metal job with lots of special symbols. We digitized all the symbols and produced that edition using our composition software. I might add we lost a lot of money on the job, but it was a good learning experience
Eventually, through some heavy sales work we landed the Random House account. This gave us access to editors like Horace Havermeyer III who was responsible for the Jacques Cousteau Underwater book series. These books were originally composed and printed in France. In an effort to save money, the first three primary process colors were over printed and were incorporated with a new black plate in English. When French is translated to English, there is a loss of certain characters which shorten the text of paragraphs. We had to manipulate the leading and vertical columns so that we could get the English text to line up on the same page to the corresponding pictures as the French versions had. This saved them from having to print the book at two separate times. It made us pretty popular at Random House which lead to us producing many more titles for them.
YPT: So how did you end up in the Yellow Pages business??
Around 1973 Western Electric put out a notice about bidding on mechanizing Yellow Pages. I went with our late Vice President, Mike Grejtak, to a bidder’s conference. We bid and won the job to do the Bell of Pennsylvania work. We had 18 months to come up with system using the original “Volt Text” system as our basis. We produced our first book in 1976. We still use the same concept of that original system today with obvious technological updates. We had a contract database and an ad database. We put the two together to make pages. At one time, we did most of R. H. Donnelly’s pre-press work when they were a large sales services provider to the Telco’s, and probably about 60% of all the industry’s work.
In the early 80’s, I wanted to enter the publishing business but the corporation, particularly our Chairman Mr. Shaw, didn’t think it was right to make a living producing their books and then compete against our customers. It was probably a smart decision at the time.
After the divestiture of AT&T, it was clear that things were going to change. In 1986 we acquired Data Comp and they had a small publishing operation in the southern Philadelphia area putting out some small neighborhood books. I was given responsibility for the operations area for these books in addition to all the other publishing work we were doing for others. As personal computers became available and companies started developing alternative systems and doing their work in-house, we needed to transition as we were steadily losing service work. We never lost a job because we didn’t produce well or didn’t provide a fair price.
Around 1996-97, I could see that the trend wasn’t going to change back and I pleaded my case again to the Chairman that we needed to enter the publishing business ourselves. This time he agreed. At that point, I got full responsibility for the Data National business. At that time, it was about an $11 million dollar business which we have now grown to around $52 million through internal expansion and acquisition. We publish premier quality directories; we are the number one usage book in some areas, and certainly in other areas our books are very well received.
Editors Note: One of the surprises we found is that Jerry is the holder of a
patent, (#5,243,531) which he obtained in 1993.
The Patent is for a method of routing and scheduling operations on elements of a work product in a paperless production system.
YPT: Who was your biggest mentor/supporter in your career??
It really was a bunch of people. A lot of credit goes to Bob Epstein, my early boss who taught me a lot about the manufacturing side of the business. Bob Stickle, who has since passed away, taught me a lot about systems. Bill Shaw provided a lot of education on business dealings. And I’d be remiss if I didn’t acknowledge Mike Grejtak. He taught me a lot about dealing with people, sales, and marketing.
YPT: Is there such a thing as a Career path in Yellow Pages, if so, what does it look like??
If we are talking about the publishing industry at large, yes, I definitely think there is. I accept the fact that, at some point in time, the printed product as we know it will be a thing of the past. But the reality is, the key parts of the business, dealing with the database, the creation of the ad material, the sales, all of the operational parts, will still be needed. I don’t know of anyone that goes out to spend money on advertising just for the heck of it without being convinced that ROI is going to be worth what they are spending it on. Unless you have people supporting the product, promoting the product, it can’t happen. Probably the biggest asset we have is a terrific sales force which services 45,000 + accounts that mean the world to us.
YPT: What does a typical week look like for you??
I’m usually involved in status meetings on sales or system development projects. I’m deeply involved with our clients because my name is on the website. So I constantly get calls from people wanting to discuss business issues and I make a point of responding to all of them. I try to make it to most of the sales offices at least every 6 months, monthly for the larger offices. Traveling now is so much more difficult, so I just can’t physically make it there as often as I would like. The rest of my time is looking at the numbers to see where we are or where we are going, working with the marketing people to discuss strategy in our next markets, and participating in the YPIMA Board functions.
My biggest challenge is scheduling since I’m getting pulled in so many directions and I want to be sure that I give everyone the time they need.
Perfect meal? Italian style meal -- light soup, some lovely pasta, a good piece of veal for the main dish, and a good solid red wine
Favorite movie? Patton
Best way to spend a day off?? Playing golf
Golf Handicap??: 9, but I’m tired of giving strokes to everyone.
Born? Age? In Brooklyn, NY. I’m 60
YPT: Other CEO’s/Presidents have noted that despite most people’s beliefs, they also have a boss. Who is your boss, and what are his expectations??
William Shaw who is the Chairman and founder of the company is my boss. He is very active in the business and we talk at least 3-4 times a week. If they accept my budget they then expect me to meet or exceed it. The pressure to perform is significant. The requirements of the Sarbanes/Oxley Act have become very time consuming and expensive.
YPT: How would you describe the Jerry DiPippo management style??
I don’t play games with people. I always try to make our goals common goals for both myself and our people. I’m just really straight-forward with people. They know right away if I have a problem with them.
My predecessors were more top line oriented. I worry about the bottom line. I’m constantly teaching my people that it doesn’t make sense to do something that makes the top line budget if its going to cost you three times more in the bottom line than it was worth. For example, I don’t believe in campaign extensions to make a budget. When the campaign is due to close, it closes. Otherwise you’re into this extend, extend, extend cycle which eventually causes other problems.
I also run the business with a longer term mindset than most, looking at what works best for the employees and our customers, for their future, for their jobs, or for their businesses. If it takes four years for an effort to payout and the payout doesn’t come until the third year, as long as that payout is good enough to support those three years I needed to wait for the results, I’ll do it if it makes good business sense.
YPT: How has your strategic focus changed from previous years??
We’ve been adding 4 color to most of the books. We’ve tried to make the book pleasant to look at as well as having valuable content. We’ve revised community pages to make them more useful. We’ve added more usable fold-out maps. We want the quality level to be extremely high and complete delivery on-time.
YPT: You have most of the major types of ads that other publishers have. What new offerings might appear in the next few years? What is going to get advertisers excited to advertise in your products??
We try to sell value. We just added a companion book in a “visor” size with just selected headings. It’s our version of a mini-book. It has a smaller number of headings than the full size book, only those that you are apt to need when you’re mobile.
We’ve tested it in Northern Virginia. There are no free listings in the book; you have to pay to be in it. There is only one display ad per heading, so advertisers have to bid on it. The reception has been amazing and we will look to roll it out in other areas.
For our regular books, I’ve seen a lot of things that others are trying of which I’m not very fond of. We don’t believe in leader ads. I have too many good accounts that are too important to me to usurp them by putting a smaller unit at the front of the heading. I don’t believe in triple trucks, which really don’t work in our trim sizes. We do have double trucks, but I’m not a real big fan of those either.
YPT: What are the demographics of your employees, years with company, level of experience??
We don’t need to hire very often. We don’t have much turnover. At our central staff, we average about 16 years with the company, many upwards of 30 years. Those in sales that last for about 5 years usually stay beyond that. But turnover in sales is very much a factor of the market in which they work --- in good markets, sales people will do well and they will stick around. If the market is not doing well, it will be tougher on sales and there tends to be more turnover. We don’t inhibit the sales earnings of people - there is no max. We have recently changed the requirement to qualify for our Presidential Awards Trip – you must grow the account base in addition to growing your revenue over last year’s. Increasing the account base has been a big awakening to many people and a major focus for us. We cannot afford to continue to lose advertisers in spite of the fact that we are growing revenue.
YPY: What have been your organization’s major achievements over the past year??
We have continued to implement and improve our in-house developed Customer Interface management system. It’s a paperless environment where we have all of our key information available: ad sheets, tear pages, all correspondence, copy sheets, contracts, and payment information. Our employees use the system to provide customer service functions, accept payments, email, or fax documents to each other or to our advertisers.
We have moved a lot of our books from 4th quarter where they use to be all grouped. It took a few years to complete. For example, our Hilton Head is now a spring book, not a fall book like it was. It makes more sense for it come out in the spring, but it means you’re only going to see 10 months of revenue each time we move it a couple of months.
YPT: What have been your organization’s biggest disappointments over the past year??
I’m impatient. My biggest disappointments are in things I wanted to get done but aren’t ready as soon as I wanted them. For example, our automated commissions program is 8 month behind schedule. That’s been a very big disappointment to me.
I’m disappointed that some employees haven’t been as accepting of our new technology. Some time you need to bring them along dragging and kicking. It’s just disappointing that they haven’t seen the benefits it can bring as clearly. I try to incorporate everyone in decisions. I’m not looking for complete consensus but I do listen to their feedback. We all know something. We don’t all know everything. It’s not unusual to contact a customer for their input, for example, when changing an invoice format.
YPT: Data National already competes head-to-head with some of the bigger publishers such as Bell South and Verizon. How do you see the landscape changing over the next five years since we now have incumbents from the utility publishers, an expanding Yellow Book, the electronic Yellow Pages entrants, and the emerging Yahoo!/Google/etc, all competing for advertiser dollars??
From a print product perspective, we have a unique niche, one which is different from where Yellow Book and RBOC publishers are going head to head on a price basis. Data National sells value in its markets, not price. Our books are well received and recognized. We keep our cover designs consistent to support branding. We note what edition it is to further identify our longevity in that market. The community knows who we are. In newer markets, it may take a few more years to reach that level. Our books make it easy for users to find what they are looking for. We structure our products around communities and shopping patterns. We make the book usable, we make it very friendly. In many ways, it’s very similar to the original model that Yellow Book had when they first started in the Long Island area of New York. They were classic community books, great books, and well recognized. We’re going to keep to our existing structure.
In electronic products, I think the current sources provide too much information, make you go through to many machinations to get what you want, just like a big book. There is so much information in there that the user really has to figure out how to get what they need. If you look at our books and our electronic product, it’s very focused. Maybe our position will change over the next 8 to 10 years when the software gets good enough to limit what you need to a reasonable level. Then, the capabilities of that product will be no different than our print product. But these electronic products really need to be smarter first. I am sure that Yellow Pages will eventually be all electronic.
YPT: Industry results show the National segment struggling, and the local channel doing ok. Independent publishers such as Data National have always had to fight hard to get the same percentage of National ad dollars that the bigger publishers attract. What steps is Data National taking to get its fair share of the channel?? What do you see as the future of the National channel??
We’ve improved our share in the last four years from very little to 7-8% of our total revenues by working hard with the CMRs to let them know about our products. We’ve heard from some CMRs that they only buy advertising in the utility books. Well, if they were doing their job for their clients, then they really should be placing advertising in the books being most used - Telco or independent. Some CMRs just don’t do their homework. I find the most depressing part can be those that are supposed to act like a national sales channel but, in effect, buy locally.
In my opinion, I think the industry has missed out on opportunity advertising where a company is promoting this or that for a limited time period. While print Yellow Pages may not be the best place for all of those advertising dollars, I think we’ve really missed positioning Yellow Pages as the anchor for all of these limited-time advertising programs. We should have ads that promote and get you to that local dealer or their website so you’re not running all over the place trying to find them.
YPT: There is a lot of discussion about the impact of "paid search" and “paid local search”. How is it affecting the Yellow Pages business in general and Data National’s business in particular??
It hasn’t really helped or hurt our business. A big transition still needs to take place. We have CMRs coming to us now looking for pay for this or pay for that. To me, that says our books have no value. Instead, I would suggest that if the advertiser pays a certain amount, that for all the calls above what’s expected, they should pay a premium. Many of the advertisers seem to want their cake and eat it too. But our products have proven value, proven usage, and truly trackable results. I’m ok to some deals on a pay per call basis, providing we see that premium for better performance. It needs to be all about ROI, because that’s the value we bring.
YPT: What keeps you up at night??
Other than all those strokes I have to give on the golf course??? Number portability. YPIMA needs to continue to seriously press this issue with the government. It’s going to cause all of us an endless amount of grief. I’m really afraid we are going miss something, or worse yet, print a wrong or an old number, and the industry is really not equipped to track this yet. If you combine that with possible FCC changes in cellular phones rates/structure , we are all going to have a huge challenge ahead to keep the listings accurate.
The other one, but somewhat related, is that the Telco business office software is horrible, hasn’t been improved in 25 years, and is causing even more listings problems. We buy the white pages from the best source we can – the Telco’s, and yet, they still contain errors. But I am optimistic that we will collectively be able to resolve the problem.