Tony:
Hi and welcome to the podcast and Zoom with podcastmybusiness.com.au. Today we have John Allan, the CEO of Sensis joining us. Good afternoon, John.
John Allan:
Hey, good afternoon, Tony. 
Tony:
So we had some technical issues, it does happen, and I’m always talking about how it’s very common.
John Allan:
Technology, it’s just a delight, isn’t it? We’ve all had to learn in COVID every form of technology and how to cope and manage, especially when it fails.
Tony:
Sensis people have heard the name, known much better for Yellow Pages. Do you still have Trading Post?
John Allan:
Nope. That went a few years ago when it separated from Sensis and Telstra.
Tony:
Right.
John Allan:
No, we don’t have the… Because we have the White Pages and we have Yellow Pages and True Local, and that kind of range of other products, which we can chat about.
Tony:
Fantastic. Please let us know the Sensis story.
John Allan:
Well, I think most of you… You’re right, I mean, most people know us as probably the Yellow Pages and the White Pages, and the White Pages has been around since 1880. It sort of started when the phone got connected and people needed to publish a print directory. That’s where it originated from. We still publish today about six to six and a half million dollars, six and a half million, sorry, books, I should say.
John Allan:
The print business is still around, but the reality is Sensis today, more than 50% of the revenue is digital. Most of that revenue is attached to digital marketing and the majority of that is either for small and medium businesses or we’ve got a range of enterprise products as well. Sort of fast forward from 1880 and you say, “Well, is print still being used?” Yes, it is in regional Australia and some metro markets. But really we’ve had to completely shift to be a digital marketing services business. That’s the majority of how we generate revenue and also the customers we serve is primarily in that digital space. 
Tony:
Right. Okay. So when talking about digital marketing, is that having to deal with, and I won’t call them evil, because I deal with them as well, but the wonderful likes of Google in particular?
John Allan:
I guess, what’s interesting in this market is, we’ve got a range of assets or products that we own like the Yellow Pages online. But you’re right, many of the services now we offer are would call kind of third party services. So Google search engine marketing and Facebook advertising are two that sort of spring to mind.
John Allan:
Inside marketing services at Sensis, that means for us things like building and managing websites, search engine marketing, search engine optimization, social advertising, and content and digital display. That’s how we define that category. There’s probably other bits and pieces in there, but that’s sort of the mainstay and fundamentally for small businesses that really are trying to kind of attract a new audience, but navigating through what is an increasingly complex digital world. Our objective is to try and simplify as best we can that solution. But you’re right, we do resell various bigger organizations, products in Google being one of the mainstays in that group.
Tony:
For sure. Of course, I’ve been in advertising industry for a long time and marketing and I remember it used to be simple. You just put in a ad in the Yellow Pages, if you’re a local plumber, you’d probably have three listings under three different names starting with 10 A’s or something like that.
John Allan:
That’s right.
Tony:
Yeah. You’d get at the front and there’d be 50 or a 100 listings for that. Now they’re all fragmented. So do you think that a lot of those businesses are still spending the same amount of money or they’re spending less or what’s happened to that space?
John Allan:
Look, pre-COVID I would say, I think businesses are still spending what they were spending before, but I think it has fragmented. So we’ve got businesses today saying, “Well, I need to have my presence online and that’s where maybe directories would fit into that helps. Perhaps I’ve got to have other sort of digital marketing resources inside my business and maybe I need to be able to sort of take bookings electronically and also manage my customers more effectively with maybe a sort of basic CRM or some sort of connection.” 
John Allan:
I think what we’re seeing is this sort of fragmentation. I also think what we’re seeing… The other trend that we’re seeing is, money is moving across sort of out of straight advertising formats into more what I call digital platform formats. That bookings example is probably a great example. If you’re a hairdresser today, many hairdressers want to have electronic bookings and the ability to kind of manage their customers and they’re willing to pay a fee for that.
John Allan:
Now, that’s probably come out of the traditional spends that they might’ve spent with us or in a local paper or through some sort of other digital form. So I don’t think the pies got bigger, but I do think it’s fragmented.
Tony:
Yeah. Okay. You touched on COVID, so let’s just deal with that. Is there, I hate to put it this way, but going from fragmentation to disintegration?
John Allan:
Well, COVID’s been a really interesting time for us. As you can imagine, we’ve got a large number of customers and small businesses and we manage their marketing and every business across Australia has been impacted in some form. We’ve been helping customers navigate through that. Whether they need to pause their marketing or change their marketing, or take a bit of a risk for a minute and rethink what they’re doing. What I think we’re seeing out of that is, I think survival of the fittest, I think there will be a shakeout of some services. I think there’ll be some businesses in the media area that might not make it through to the other side. Mainly I think, it refer to really to this sort of digital marketing services space, because the barriers to entry are so low, that last time I think we counted… We said, we think there’s about three and a half thousand people that provide digital marketing services in Australia From your uncle down the road, who thinks he can build a lovely website, to an okay job, to someone who can manage Google.
John Allan:
We think what will happen in COVID is, there’ll be a sort of a shake out of some of those. That’ll be driven by their customers who perhaps need help doing codes, because they want to stop their spending, or they want to pivot to do other things. They want to take it from one medium and put it to another. Their ability to manage that for the customer ride through and for their business to do okay, I think is going to put a pressure on a number of those providers.
John Allan:
Now we were fortuitous in a sense, because of the size of the organization. Certainly not in my time, but unfortunately in Sensis’s history, we were around with the last pandemic, which is pretty amazing in a sense. So we’ve adapted and sort of… I think, with each one of these that pops along, we’ve had to adapt as a business, I think. That’s not to say we haven’t gone through the same pressures, because we have, but I think given our history and our size and our scale, we can navigate that a little bit more effectively, I think.
Tony:
Yeah. I liked the way you put it another one of these comes along, because every business should be prepared for change and also change equals opportunity. And like I mentioned, I had an interview earlier with Fred from one of the founders of finder.com and thinking like an entrepreneur. So do you think that’s what a good small business should be thinking like?
John Allan:
I do. I think really we’ve seen some amazing businesses during this COVID crisis. Businesses that have had to adapt or they’re going to collapse, whether it’s a business that might be a plastics manufacturer that’s had to make PPE equipment, whether it’s a restaurant or a cafe who has had to move to purely… Start home delivering takeaway, and sort of had to hope, very quickly in days and just kind of digitize their whole offering and pivots and completely shifted the way they operate their business. I think that the businesses we’ve seen that have sort of embraced that, some of it because of survival, and really tackled that opportunity and stand back and think, “Well, out of this crisis… I always think, out of every crisis, there’s always some opportunities.” We’ve seen many businesses seize those opportunities.
John Allan:
It was interesting in the start of the crisis, we had a number of clients that rang us and obviously very panicked and very concerned. Of course they want to be prudent with their spending and they want to perhaps pause or change their advertising. Then we had other clients who rang up and said, “Actually I see this as a great opportunity. As my competitors stop, I’m going to double down in a couple of areas.” They might be geographic footprints. So maybe where there… Perhaps not got as much market share as they would like, so they doubled down on some activities, because they sort of thought their competitors would probably stop.
John Allan:
If I go back to those customers from the early days, it’s not to say it’s been a perfect run, but for many of them, I think that’s been a good decision and it has paid dividends, because they were just less competitors around on those early days of COVID. I think businesses have to be brave and I think they should seize these opportunities if they presented themselves.
Tony:
Yeah, exactly. There’s that wonderful example I remember from marketing school of Cadbury and the Second World War, no product is sold, kept advertising in the Second World War. Product came back, everyone just wanted Cadbury, didn’t even know who the other people were.
John Allan:
Yeah. I think this is very similar, but on a kind of localized scale for sure. I think, there’s some challenges… We know, Melbourne at the moment is a real challenge to small business. They’re sort of week two of a sort of six week lockdown and that’s where our head office is located. We’re living that issue right now, but I do think businesses that are in lockdown and are restricted are already planning at how to come out of it and how to really seize the best out of I guess, what is a pretty bad issue for them. We’re sort of helping them ascertain what those opportunities are.
Tony:
Yeah. It’s interesting. When I first started Podcast My Business back in March just before COVID and luckily I do online interviews, but I spent more time thinking than doing, and I think this is a good opportunity for businesses to spend more time thinking rather than just doing.
John Allan:
Exactly right. If you’re at home or you’ve got some spare time, this is a nice opportunity just to stand back, I think, and say, “Well, where are those opportunities? What things can I do or perhaps my competitors doing that maybe I don’t ever pay much attention to?” So this is a good opportunity. I think it’s also an opportunity to talk to different partners and providers and talk to them about what trends and ideas they’re seeing as well, because we’re seeing that on scale in some areas. We’re happy to talk to clients about what we see as opportunities. 
John Allan:
I think the other thing that’s been interesting, of course, we referenced earlier, we own Yellow Pages and White Pages, so we have all the search data. We can tell you where all the search is occurring and what’s occurring, where they’ve dropped and where they’ve spiked. Now, of course, in the early days, things like cleaning services and beer making kind of went off the scale, which is all very entertaining. But underneath that is… I would say to businesses, if you’ve got partners you’re working with, go and talk to them about what information they’ve also got available, because quite often we have these things at our disposal that might be valuable for a small business as well.
Tony:
Well, and yeah, and every business has a website that has Google analytics, as simple as that.
John Allan:
That’s exactly right. Great opportunity I think, to take stock. I do think businesses, those that take a little bit of bravery or think, or apply a little bit of bravery, I think you can win out of this crisis.
Tony:
Yeah. Reminds me of that wonderful book by Richard Branson, Screw It, Just Do It. Yeah.
John Allan:
Yeah. Maybe don’t overthink it and don’t play the farm on it. But I think the other thing too, is that businesses… We’ve seen businesses respond really quickly. So those that have adapted fast quite often have sort of got ahead quickly and haven’t sort of, I think, overlabored the point either.
Tony:
Mm-hmm (affirmative). Yeah. I’m definitely seeing that there’s opportunities for smart businesses that can move fast. So if I was setting up a business now, what would be some tips from you in relation to doing that?
John Allan:
Well, I think the first thing I would say to any business is to make sure that your presence, your digital presence is well set up. Now, in my mind, there’s a few things to that. There’s of course, a website. I think that we’ve seen in a time of incredible pressure on finances and marketing expenditure, is in fact our website part of our business that’s gone up, not down during COVID. That’s very interesting to me. Some businesses have said, “Well, our website’s critical.”
John Allan:
The other thing I think is the, what we would call kind of digital presence, and making sure that all the content and things that you can get across the web, many of it for free, you maximize and optimize that. I think that is super important. That for me, I think is sort of the mainstay. Then I think, I’d then be saying to businesses, “Well, clearly you want to bring new customers into your business. Think very carefully about your target audience and then work with your partners to ascertain where you should be focusing your energies.”
John Allan:
There’s been some shifts I think in COVID. For example, we know social media is very high. If we’re talking about mainstream media, we know that TV consumption is higher at the moment, but we also know that radio is down dramatically or out… Down dramatically. So all of the traditional media right now, some of it I think is perhaps not delivering as much audience as it used to. Then I think on the digital side, I think there is definitely less competition for digital. We have a big search engine marketing business. We work heavily with Google and Bing. We saw the cost per click during COVID drop dramatically. Why? Because there’s less demand.
John Allan:
That’s interesting if we can deliver more value to customers during this crisis than we were pre-crisis, most of our clients are getting a lower cost per click or lower cost per call now than they were back in February. Now, it is starting to come back a little bit as demand’s ramping up. So I think my other advice to businesses is everything has sort of changed since February. So take stock, review what you’ve got and then pick very carefully the things that’s going to drive immediate return on investment. It’s interesting, I was thinking about all that marketing, they’ve got a marketing saying, which is, “I know that 60% of all my marketing is kind of wasted. I just wish I knew which 60%.” 
Tony:
That was Henry Ford I think that-
John Allan:
That’s right.
Tony:
That is attributed to-
John Allan:
That is Henry Ford.
Tony:
Yes.
John Allan:
Yeah. I’ve probably plagiarized the key components there, but I think that’s still very true, but in digital, of course, it’s very measurable. My advice to businesses would… This is a great opportunity to take stock and don’t assume something that was perhaps working two or three months ago is still working. See and look at those new opportunities that may be available.
Tony:
Now talking about opportunities, I’m not going to try and tap in some of your big data here, what industries do you think would be big winners and what industries do you think are going to be the big losers?
John Allan:
Well, I think back to what a consumer’s doing at this point in time and where is money being spent. If I sort of come back above that, I still think with us not traveling and with us sort of stuck at home, I think if you’ve still got your job and your income is reasonably stable, I think people are going to be spending money around the house. So my view is anything that relates to those industries. I think the trades and home services industry we’ve seen actually that industry perform quite well during COVID. Maybe in Melbourne, you can’t get anything done at the moment, but the rest of the state, you can get the painter in and the plumber and the electrician and get all of those sort of things fixed. So I think those industries are going to do okay out of COVID, would be my view.
John Allan:
We know online retailing, of course, that big shift of consumers. I look at the performance of the big guys like Kogan and Temple & Webster’s who’ve seen huge shifts of consumers to them. I think that is an opportunity for smaller retailers. I think the challenge we see sometimes with smaller retailers is they’re not well set up digitally for things like e-commerce and be able to transact. But I think if you are a business that’s tackled that challenge there, I think you’re well positioned.
John Allan:
I think as it comes back to where people are going to be spending money, naturally, some industries, as we know, are doing terribly, the travel industry or the entertainment industry or the arts industries. I think there going to need some time to recover. I think we’re just also starting to see sort of some of the health industries return. As an example, we know that during COVID we saw a lot of our dentists customers for period there, just didn’t have any customers at all. That’s now starting to come back online. So my view is, I think the trades and home services category will do okay, and the retail category will do okay. But the rest will take, I think, a little while to recover.
Tony:
Mm-hmm (affirmative). Talking about, a little while, so let’s look into the crystal ball and this is an interesting question, when would you see that, even for international travel, when next year that will start to recover?
John Allan:
Well, that’s a tough one. From a personal level, I wish we could do international travel tomorrow. I’m sure like many of your listeners, we’ve all had to defer or we’ve said in our household, had to defer some international travel. None of us I think, liked the thought of not being able to travel. I think it’s a very difficult question. I’m optimistic that we will be able to travel next year. I can’t see Australia remaining in a world bubble beyond early next year, would be my view, because I think that will have a significant downstream impact to the country beyond what we’ve already got. 
John Allan:
I’m optimistic It’ll be next year. Clearly, it’s going to be better if we’ve got a vaccine, but if not, I think we, as a nation are going to have to learn to work out how to cope with this COVID-19 as opposed to remaining a bubble from the rest of the world. That’s my view.
Tony:
Mm-hmm (affirmative). Yeah, I agree on that, because I think you can be a turtle and just keep your head in the shell for a while and learning to live with it. I remember, was it that movie with Peter what’s-his-name, Learning to Love the Bomb, or something like that.
Tony:
I think we’ve got to learn to love COVID and for now, but yeah. Okay, so just quickly, do you see that that could potentially lead to a lift in domestic travel? I heard something today, it was like $10 billion worth of international spending, that hasn’t happened. So where is that money and where’s it going to go?
John Allan:
Well, I think right now, I agree we’ll go domestically into the economy, because I think we’re all… If I just think about our friendship groups, all my friends at the moment talking about traveling domestically, they all want to just be able to go. If you live in New South Wales, you just want to be able to go to Queensland. If you live in Victoria, you probably want to go to New South Wales and Queensland and so on. So we’re sort of all desperate and getting a bit stir-crazy I think, being at home. So I do think that money will wash into the domestic economy. I think the challenge is though the longer the borders are closed, I think the harder for some of those domestic travel operators. Some of them, will they survive on the way through?
John Allan:
So I think a lot about some of perhaps the mid to higher end tourism companies based in Queensland. They’re heavily reliant on people from Sydney and Melbourne to come and spend money with them. If they can’t travel through the borders, they don’t really have a business. So I am worried, particularly worried about tourism sectors that are reliant on interstate tourism.
John Allan:
I think intrastate will be okay in the short-term. It would be terrible to see some of those businesses not make it through to the other side, but I think it’s a risk the longer the borders are closed. Now I get why the borders are closed and I think we all start from kind of a health basis first. But it doesn’t lessen the economic impact of that decision in terms of the small businesses that rely on tourism. My view.
Tony:
Yeah. Look, I agree. I can foresee some huge bargains coming up towards the end of the year, especially in Queensland. There’ll be lots of desperate deals up there. Maybe you could call it Dan’s Desperate Deals or something like that.
John Allan:
Yeah. Well, I think for consumers, we will hope they’re the sort of deals at float arrived. I think in this stage we would just like as much surety as planning their holiday as well. I think this is the other difficulty, is that the longer the borders go on, I think for many of us as consumers, planning and wanting to go on holidays, you want a surety of the timing when you can do it. I think again, telling my kind of view, is the longer that goes on, poses a bigger risk I guess, to the whole tourism industry and the small businesses that rely on it.
Tony:
Yeah. I think that tourism is one of those industries where small businesses, or there’s a lot of small businesses attracted or attached to tourism, and even overseas. I mean, you’ve probably been to Bali. We’ve all been to Bali and different places in Asia and you jump on the boat to go touring to an island and they stop halfway for those little sandbars and they rush out with their little deck chairs and that’s a business. I mean, that’s a family being fed that isn’t being fed at the moment. So, yeah, it’s having a huge impact.
John Allan:
Yeah. The trickle will impact all the way down the line I think. As I said, from flying there, to the person that transports you round, to the people that cook your meals, to the person who makes the… To manages the shop that you buy in, or the restaurant cafe, all of those businesses are going to… And are materially impacted and wouldn’t it be great if all of that international spending money went into the domestic economy. That would be, I think, a great outcome. But that is pretty restrictive, if we could only travel in a state that we live at this point in time.
Tony:
Well, that’s right and I believe we, in the rest of Australia, we’re all praying and hoping for everybody in Melbourne that they get over this hump. It appears that it’s progressing as well as expected. I do that with coffee shops. I don’t say, “How you doing?” I say, “Look, you know what, let me answer it for you. You’re doing as well as expected and just leave it at that.”
John Allan:
That’s right.
Tony:
Yeah. What do you do? Okay, John, is there anything else you’d like to add?
John Allan:
No, I think it’s been a great conversation, Tony. I think that’s it. I’m optimistic for small business. I think we see it as our role at Sensis as helping businesses get back on their feet and explored opportunities for the business. I think that if you talked to anyone in my team or my office or come and hang out with me in my study at home where I’ve been since March as is every employee in our company, our obsession is about how do we help businesses get back on their feet? If they get back on their feet, then the economy gets back on its feet and that’s really what we’re obsessed about. 
Tony:
Mm-hmm (affirmative). Yeah, exactly. And that’s the whole purpose of the Podcast My Business channel, is to give advice and support to businesses so they can see where they should be going, where they should be heading. Great. All right.
John Allan:
Which is fantastic.
Tony:
Thank you for your time, John.
John Allan:
No problem. Thank you, Tony.
