Back in the day, the Yellow Pages ruled. Business names were sometimes based on where they would end up in the book (that's why there are so many accommodation options starting with A and, as this story starting at 12.52 on Radiolab shows, the Krasilovky Brothers took that to extremes with their long-running listing battle). According to MYOB, only 34 percent of SMEs in New Zealand operated a business website in 2013, so many still list in the book, but for many consumers the online realm is a much more efficient way of finding a business and Google has taken its toll on the print-based directories and forced them to find new revenue streams. So why are there still so many online business directories?
Have a look through the search results and many of them look fairly spammy, and they hardly have any information about a company on them, or the full picture of everything that's out there. They will generally only have the bare-bones information about a business – their name, website, address, phone number, maybe a description of what the business offers. So, to most of us, direct and organic links on Google seem far more trustworthy and relevant. Independent marketing consultant Sheldon Nesdale says these other directories are there solely to increase a company's ranking on Google, almost like a Chinese box scenario of directories inside a dominant directory. A business can put their business on a directory themselves, but the directory is trusted more by Google if it's "human-edited", or run by a team of people who vet the business for authenticity, so these ones are more useful to list on.
Nesdale says he always puts a new business' website on the top ten businesses directory sites "so that Google knows it’s real".
|Business directory / search page||New Zealanders who visited the business directories in the month of June 2014 (Nielsen figures)|
"It’s always good to kickstart a new website, really valuable for a start up, when in the initial period each link counts. But Google knows whether a directory is human edited or not. Things like links going live as soon as a website is created, or not having a postal address or phone number," he says.
Many business directories also have paid options, where they will carry out further SEO and add to/tweak a company's content on the directory to match Google's latest algorithms, which are forever changing (the latest one, Pigeon, was released recently). The algorithms change because Google wants to produce the most accurate search results based on what users might want when searching for a specific phrase (and then selling advertising around it). The results are generated by popularity and common usage and are aimed at helping consumers, not businesses. And while a generation of SEO experts originally claimed they could game the system and get businesses on to the all-important first page, Google's proven to be too smart for that and its recent change put more emphasis on more relevant local listings.
Where business directories might actually be tempting for users is when they head into review territory and users can get referrals from other users. Finda does this, and so too do Localist and Yelp, which launched in New Zealand last year. According to a Nielsen study in 2012, recommendations from people you know and online recommendations are the two most trusted forms of advertising.
General manager of Localist Christina Sayers Wickstead says Localist started as a print directory, a decision questioned by many. It eventually went 100 percent digital and, with a large digital directory of 100,000 SMEs, most of which have unpaid listings, it's looking at further combining the database with popular opinion to modernise it and make it tempting for users to leave Google for (Google has also attempted to bring a more social, recommendation-based element to its listings through Google+, with mixed results).
"What we're doing is looking at a directory that reflects public opinion. For example if people love a cafe, they can 'love' it on our site, and you can find it online if people recommend it."
Localist does first offer a free service, which it calls freemium, and people can then upgrade and pay to drive more traffic to their listing.
"We have a get-started package, with added photos, videos, Adwords, and other content for a page on Localist. It will maximise page search but also organic search. We call it 'activating a business'; getting people onto your website," she says. "Referral is the strongest sales lead but also the oldest sales lead out there—and this is just using a modern platform to activate it in a new way. People tend to believe they are spontaneously viral, and that pages rank out of luck, but people like us have a craft and know how to make digital platforms work. The ability to activate now is so much easier than it was years ago, you can activate a business while you're sleeping. There's not nearly as much energy required."
Yellow is second only to Google in terms of page visits, but the fact that, unlike Google, it only showed paid listings, got Monica Wales' back up in a piece on Idealog back in 2011.
Yellow chief executive Michael Boersen says its print business is still declining, although he says external research shows there are pockets of increased usage. "For example, in Nelson and Marlborough, we had a couple of competitors for about three years. But neither succeeded – why invest in a declining industry? They found it tough and pulled out. So those users went back to Yellow. Christchurch was another one, perhaps with the disruption the easiest thing was to just pick up the book, especially when there is no power and no internet.” He says the South Island in general is more traditional and loyal to the book than Auckland (for the first time, householders can opt-out of receiving next year's Yellow and White pages books).
Boersen says digital now makes up 35 percent ($46 million) of Yellow’s revenue. The rest of its revenue is largely made up of print and the 018 directory number (remember that? For a small charge to your phone bill, they’d find you someone’s phone number and address. How quaint).
He says although directories are still core to the Yellow business, the gains to be had from directories both on and offline has been in decline, and, like Localist, it’s now putting investment into other opportunities that come out of directories, such as search engine marketing (SEM), mobile apps and website builds (it launched the Yellow Toolbox in 2012). He says the digital part of the business has had year on year growth and next year he expects digital to make up 43 percent of Yellow’s revenue (60 percent of this will be directories, and 40 percent will be other digital products). He says competing with Google as a directory is "a big challenge on a regular basis," and there's no doubt it has taken plenty of wind out the directories business sails. But it's also something of a frenemy (if you can't beat them, try to at least profit from them). As Google doesn't have a huge sales force in this market, it enlists resellers who have connections to SMEs to sell Adwords and Localist, Yellow, APN, Gopher and ReachLocal NZ are among them in this market.
“They invest time in Yellow to train our people to deliver SEM for small businesses. Our director of digital services also meets with them in New Zealand on a regular basis, and he spoke at their conference last year.”
In a statement, Google says: "We work with a number of partners in New Zealand to help make our products accessible to more small and large business, and we work closely with them to make sure they're offering something that's of value to their customers. If we receive complaints about third parties we will, of course, investigate those quickly."
So while the dominant player appears to be becoming ever more dominant, and deservedly so, there is still room for the birds to ride on the rhino's back.
Google's algorithm changes