10 Reasons Directories Still Have a Place in SMB Marketing

Disclaimer: I am a (online) product manager at the largest directory publisher in Canada.  Despite this bias, I firmly believe that the knowledge acquired working on the inside allows me to simply be more confident in my analysis.

I’ve often written on this blog, and around the internet, about finding the right marketing mix, and I’ve always included directories as part of that mix.  I’ve taken some heat for that from fellow internet marketers. They see directories as dinosaurs on the verge of extinction.  Therefore, in this post, I will take the time to defend my position and outline ten reasons why directories still have a place in this world of search, social and mobile.

1) Not everyone uses the internet to find businesses

The standard assumption among most tech-savvy marketers (and most marketers are tech-savvy, because that’s what’s cool nowadays) is that everyone uses the internet to find what they’re looking for.  That’s easy to assume while watching the crowds of iPhone-toting Gen-Yers, and Blackberry-toting Gen-Xers.  However, there is a significant segment of the population that does not immediately turn to the web when looking to make a purchase.

My father taught me everything I know about computers from how to assemble one, to how to get online.  Last summer he needed a roofing contractor.  Imagine my surprise when I saw him haul out the Yellow Pages.  My mother is less tech-savvy, and she would never even dream of turning to Google to find a business. To her, Google is where you go to get information for your kid’s school project.

I could also go back another generation and talk about my grandparents, but I think you get the idea. You can restrict yourself to online advertising and get me as your consumer, but you’ll be missing two generations of my family that would probably be far more lucrative.

2) Mixed media value

The idea that directories are only the big yellow books that get delivered to your door is wilfull blindness.  The fact of the matter is, every important Yellow Pages publisher in the world has become a media company that offers print, online, video, search, mobile and more. Often, YP publishers offer these media in bundled packages for a value that small businesses would be hard pressed to find elsewhere.  Purchasing all of those media segments independently would be too expensive for a SMB marketing budget, but directory publishers that understand the SMB market, have crafted bundles that make sense to the small business.

3) SEO value of being in an online directory

SEO is all about the quality of the sites that link to your website.  Online directory sites, especially the biggest and most reputable ones, generally have excellent search engine rankings, and obtaining links from these directories is easy and cheap.  While the SEO value of a link from a directory should never be your primary reason for purchasing online directory advertising, it is an excellent side benefit.

4) Competent marketing advice from a knowledgeable advisor

The best thing about Google Adwords is also the worst thing about Google Adwords: It is self-serve.  Google does an excellent job of giving advertisers tools and getting out of the way.  In the context of large companies with marketing departments that have the time, resources, and money to spend on figuring out these tools, this is wonderful.  These companies can do things in house that they used to have to hire agencies to do for them.

For SMB’s however, this is not as appealing.  As a small business owner, you have dozens of hats to wear, and you don’t want to spend twenty hours a week optimizing your $100/month Google Adwords campaign.  In fact, do you even know for a fact that you should be spending that money on Adwords?

Small business owners are experts in many things, from their own industry, to managing the day to day operations of a business, but they are not marketing experts.  Directories employ people — whether they call them sales reps, account consultants, media advisors or anything else — who understand the media and the marketing and who can act as a guide through a confusing landscape, so that business owners can concentrate on running their businesses.

5) Trustworthy source of advertising

One of the biggest things that directory publishers have going for them is that they have been around for a long time, and are trusted companies in their own right.  In Canada, Yellow Pages Group has been an industry leader for over 100 years.  That history and brand carries weight with it.  If you’re an advertiser, are you going to trust your marketing budget to a company that has been around for a century and has a proven track record, or are you going to trust the guy who opened up shop in his parents’ basement?

The example is extreme, because in the US, the directory industry is filled with a lot of smaller players, some of whom are no more trustworthy than the guy in his parents’ basement.  However, the big players in the US, (YellowPages.com, SuperPages.com, YellowBook.com and a couple others) have an equally strong brand.

6) The demise of any medium is always slower than originally forecasted

I recently read an article from 1993 talking about the demise of the newspaper industry.  While the newspaper industry is by no means in good shape, I’d like to point out that it is currently 2010, and it is still hobbling along 17 years after people were predicting its extinction, and it will likely continue to hobble along for several more years.

I have no delusions that my children will ever use a print Yellow Pages directory, but as I mentioned above in point 1, the generations that do still use it are still around, and are going to be around for quite a few more years to come.

7) Protecting market share

While I don’t like using this as an argument to advertise in any medium, because it feels coercive, it holds true nonetheless:  If you don’t advertise in a directory, your competitors will.  This simply means that not only are you missing eyeballs by not being in a certain spot, but that those eyeballs are going directly to your competitors.  While marketing for defensive branding purposes isn’t appealing, it’s sometimes necessary.

Comprehensiveness of listings

On the flip side, there’s a certain trust that’s built around having a directory listing.  While Google prides itself on giving relevant info (almost) every time, directories for their part, are generally recognized as being comprehensive.  As such, a business’ absence from a directory conveys the sense that he’s not really fully arrived, while his presence conveys an established place in his industry.  It’s as if the space taken up in a certain heading is a validation that you are in fact a player in a given industry, and that is a small step in building trust.  Whether that trust is based on something real, or based solely on customers’ perception doesn’t really matter, because perception is reality.

9) Directories drive innovation and competition

How can a yellow telephone book drive innovation? The argument of the directory nay-sayers is that the industry is stuck in the past. In fact, the industry is going to great lengths to reinvent itself and pushing the envelope.  In the past year alone, I’ve watched YP.ca launch a simplified search marketing solution that tracks leads rather than just clicks; a bevy of online video options; two really cool mobile applications (the YP.ca app, and the Urbanizer app); a ratings and review platform; integration with Facebook; and much more.  And it’s not just YP.ca that’s doing these kinds of cool things, YPs in the US are pushing the envelope as well, most recently YP.com’s Buzz platform has caught my attention (even if the name choice is questionable).

It’s also not just about what the YPs are doing themselves, but about what they’re forcing competitors to do.  Google’s current Enhanced Local Business Listing product (aka Tags), is an attempt to win SMB business away from YP publishers.

The fact of the matter is that in the local marketing space, YPs are the incumbents, and to displace them, other companies are doing cool things to win SMBs marketing dollars.  The winners in all of this are the SMBs.

10) They work: actual customers see actual results

The final reason is really the only one that really counts: Directories, online and off, still drive results. Advertisers are still seeing a positive ROI. YPs have had a hard time demonstrating this because in the days of their domination they didn’t have to.  Now, with the transparency of the internet, they’ve probably been too slow pulling back the curtains on the results they deliver, but not for fear of what’s behind it, but simply because large ships have a hard time changing course quickly.

More and more, though, directories are providing this kind of transparency with call measurement and tracking, and even advertisers are being surprised by just how much of their business they owe to their directory advertising.

I’ll leave you with this link to a recent study conducted by Burke and comScore that supports much of what I said above.  SMBs need to decide now what’s more important, the results, or buying the quick and easy line that “YPs are dinosaurs.”