Directory innovators Gopher gold
"They knew in major markets they had been suffering a double-digit decline. They knew that was the canary in the mine shaft."
So said Werner Powers, an attorney for creditors in a US$9.5 billion lawsuit against communications giant Verizon in Dallas last month.
Creditors charge that Verizon, knowing its directory business, Idearc, was declining, loaded it up with debt and sold it. Idearc filed for bankruptcy protection just over two years later.
The directory business used to be a licence to print money. Not any more. Popular wisdom, pointing to $1.6 billion of writedowns at Yellow Pages last year, would have it that New Zealand is no different.
But one local company thinks differently, and has grown strongly in the market until last month it became only the third local Google premier AdWords partner - behind Yellow and NZ Post-funded Localist.
Gopher was launched in August 2007 by John Campbell and his business partner B J Sviestrup. The self-funded company now has 150 staff, nearly three times more than Localist.
It has twice featured prominently in Deloitte's Fast 50 programme, which tracks high-growth businesses. It has also done something the other two local directories haven't - gone international, with a business in Indonesia and a launch in Thailand looming.
Gopher started out as a directory, but now offers digital advertising and technology, social media and mobile services as well as Google AdWords. It targets small- and medium-sized businesses, often with fixed-price packages aimed at driving traffic to clients' businesses.
Campbell, who said some people describe him as "relentlessly demanding", puts that success down to Kiwi ingenuity. "We do things differently. We use the bulk of the money we get from customers to ensure their businesses get found," he said. "It's about investing in our customers' profiles rather than ours."
Gopher's job, therefore, is not to market itself, but to market its customers. Gopher also invests in technology, vital in a space that is moving very fast. Campbell said the Google AdWords platform the company uses is entirely proprietary.
Gopher has developed almost all of its platforms internally, with the exception of its customer relationship management system. And it continues to invest in those systems.
That's because, Campbell insists, Gopher faces the same "legacy" technology challenges as any established directory businesses, even though it is still a young company.
"Technology is advancing at such a rapid pace that everyone is dealing with legacy issues within a couple of years," he said. The effort has to be ongoing.
Technology gives Gopher its competitive advantage, he said. It also helps the company to be agile.
"It sounds a cliche, but there is some truth in it," he said.
Gopher is a young company and the average age of its staff is also young. Campbell describes his team as "super enthusiastic".
"If anyone comes to us with an idea, we try it and if it doesn't work out we try something else. There's no blame," he said.
"It's not a bureaucratic or stifling environment."
Campbell said winning the Google AdWords partnership is validation that will "raise eyebrows" in a competitive market.
It shows, he said, that Google considers Gopher a significant player and that Gopher was able to meet Google's stringent requirements.
He said even after such a deal is inked, Google continues to work closely with its partners. The company is very protective of its brand.
"They tell us we are good to work with and quick to respond," he said.
Campbell said with only a third of New Zealand businesses having a website, there is plenty of work to be done.
"How can you run an effective business if people can't locate you?" he asked.
Most of these smaller businesses can't afford their own marketer, so Gopher offers 12-month fixed-price contracts to allow them access to quality advice and services.
Sunday Star Times