How Do Online Internet Business Directories Make Money?

November 17, 2011
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Do Business Directories Make Money

Do Business Directories Make Money

Okay so perhaps you’re a bit inquisitive and what to know if business directory sites make money, and if so, then how they do it.  Or perhaps you’re interested in starting your own business directory and want to know more about the potential revenue streams.

Well first I’ll start out by saying that not all directories are the same.  Like most things in life there are varying levels of quality and service within this industry.  In short it can be distilled down into three categories:
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1. High Usage Sites, e.g. Yell and Tompson Local
2. Medium Usage Sites e.g. Wampit, My Local Services and Free Index
3. Low Usage Sites (literally 1000′s of them)

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High Usage Business Directories

High usage sites generate a lot of traffic (over 1m + visitors per month), have been around for at least 10 years, and have well respected brands.  There are only a few of these sites on the Internet like Yellow Pages.

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Medium Usage Business Directories

Medium usage sites generate a significant about of traffic (hundreds of thousands of visitors per month), and have been around for over 5 years.  In the UK there are only a handful of these quality directories, and when you combine their traffic they equal the high usage sites.
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In all cases, they offer an exceptional level of customer service and usually provide more free content to promote your business than the high usage sites – their upgrade products are generally less expensive too. Quality directories include Wampit, My Local Services and Free Index.

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Low Usage / Low Quality Directories

Low quality / low usage sites generate very little traffic and usually publish out-of-date or erroneous data.  In most cases there is no customer service / flagging process – they are set up to publish large business lists (name / address / phone numbers) in order to gain revenue from advertising on the sites.  However, with the recent release of Google Panda (to display search results from quality / trusted sites and move spammy sites down) has significantly reduced traffic to these sites to almost nothing, and put many out of business.

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What Are The Revenue Streams?

The majority of both high and medium usage sites usually make their money from one or more of the following revenue streams:
  1.  Charging for upgrades to the free listing, e.g. Priority Status or a link to your website
  2.  Advertising banners / text links around the site and on unique advert pages
  3.  Affiliate schemes, e.g. linking to a site and gaining a % of money from purchases made on that site
  4.  Sharing registration / advert content data with other services
The ethical sites (in high and medium usage category) all adhere to industry regulations, e.g. data protection, and operate ethical practices.  For example, they won’t share your sign-up data with any other company unless you ‘opt-in’ to that during registration.  Affiliate schemes are also less favoured by the quality directories due to the negative view Google and other major search engines have on that process, i.e. pushing surfers to websites in order to make money.
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In summary, the business directory sector is extremely competitive, and it’s very difficult for new start-up directories to break into the industry.  For example, in a post Google Panda world it’s difficult if not near impossible to get major search engines to index a new business directory site that publishes similar / same content to other sites.  Today it’s all about serving quality links in search results that match the relevancy of users’ searches.
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About the Author:

James Stevens works for Wampit® as a freelance writer and blogger specialising in the media and advertising sector.  You can add your company profile to the Wampit® business directory today – one of the UK’s premier and trusted advertising services.

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