local business directory

5 Reasons to Launch a Local Business Directory

The biggest business directories in the world are generating millions of dollars in profit for online publishers.

Launching a local business directory is a no-brainer for digital publishers right now. Using sophisticated content management systems, publishers can create directories that are nearly autonomous. Self-serve portals allow businesses to generate and pay for online listings themselves, while publishers sit back and watch the profits pour in.

With a net revenue of more than $218 million last year, Yelp has become one of the most influential directory publishers for local businesses. The company saw paying advertising accounts grow 21% year-over-year, with approximately 163,000 businesses now advertising on the platform.

While those figures are substantial, they also show that there’s still plenty of room for growth in the local business directory space. The U.S. Small Business Administration reports that there are more than 30.2 million small businesses operating in the U.S., which means the advertiser market for local business directories is substantial.

Here are five reasons why digital publishers are rushing to launch local business directories — and why you might be interested in launching one of these directories, too.

1. Generating Ancillary Revenue

By far, the primary reason to launch a local business directory is to create a new form of ancillary revenue. Businesses typically pay a fee of $5 to $10 per month to have their listings included in local directories, providing digital publishers with a reliable stream of revenue that they can count on. Consider this: A local directory with 1,000 listings, charging businesses $10 per month, generates $10,000 in income for a publisher. Although there are a number of other reasons to launch a local business directory, the opportunity to create an entirely new stream of ancillary revenue is something that most publishers can’t afford to overlook.

2. Providing Advertisers With More Options

A growing number of advertisers are moving away from display advertising, fearing that the medium itself has gotten stale. Instead, they are pushing for more unique, relevant advertising experiences. Sponsorships and paid listings are just two examples of “new” advertising avenues that businesses are excited to explore. Sponsorships, in particular, can be lucrative for digital publishers, since advertisers will pay a premium to ensure their logos are the only ones featured on the directory’s homepage for a given period of time.

3. Increasing Search Traffic

Search engines like Google and Bing love online directories, thanks in part to their local focus and keyword-rich listings. The smartest digital publishers are capitalizing on the search traffic that their business directories bring in and converting those visitors into readers of their publications. “Related Content” tags and links to articles about the businesses featured in each listing are two examples of ways that digital magazine publishers are bringing directory visitors over to their publications.

4. Reinvigorating Subscription Programs

Online subscriptions can be a hard sell, especially for digital publishers that already give away a certain amount of content for free and those that rely on display advertising for revenue. Instead of placing a paywall around their articles, some publishers are giving subscribers access to VIP benefits or services. One of these benefits can be a subscribers-only directory. This strategy works better for niche publishers (such as industry-specific online magazines) than local newspapers, but it’s still a concept worth exploring for any publishers looking to increase the value of their subscription programs.

5. Building Connections in the Community

Although we focus a lot on the revenue that online directories generate, the reality is that a local business directory is more than just an advertising service. Like community calendars—which we’ve written about previously—business directories actually serve an important function in local communities. In smaller towns, especially, a local business directory can become a hub of information for both everyday citizens and business owners.

If you have already launched a local business directory, reach out and tell us why you decided to jump onboard. We’re always interested in learning about other publishers’ experiences with emerging platforms.