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Google Algorithm Changes Benefit Directory Sites at the Expense of Local Businesses

  |  August 20, 2012   |  Comments

If local search results continue to favor directories and listing aggregators, you must adjust your local strategy so you have a favorable position in the local listings section.

Back in May, as part of a number of designed experiments related to local search, we observed a big shift in the Google search results for a number of local service and retail queries. I documented some of the observations in May's column: "Was the Penguin Update in Fact the Honey Badger Update?"

I hypothesized that the Google Penguin update favored directory sites; both Internet Yellow Pages (IYP) sites and vertical listing aggregator sites at the expense of actual local business sites. This was odd because for the past two years, Google had been favoring and featuring local listings over these directories. So much in fact, that the traffic levels at most IYPs had declined.

Here is an example of a Google search engine results page (SERP) from May:


Since May, Google has made a number of algorithm changes. This week I reran the same queries. I was surprised to observe that the directory listings were still occupying the most favorable "blue link" organic positions surrounding the local listings. In fact, the first true local business isn't listed until the fifth organic position.


Just for comparison I ran the same queries on Bing. Below, the query "Plumbers Danbury" is displayed.


While not as many directory links were present, still the first two organic positions were occupied by yellowpages.com and elocalplumbers.com.

This made wonder if the changes had impacted IYP usage and traffic. As we pointed out in the 15miles/Localeze Local Search Study conducted by comScore, IYP traffic and usage have declined over the past year. So did the algorithm move by Google breathe new traffic into the IYP and directory vertical?

While not a scientific cause-and-effect study, the following results from Google Trends might indicate that there has been a relationship to SERP change favoring IYPs and traffic increases:


Note the increase in traffic starting in the April/May time frame. Yellowpages.com and superpages.com have both experienced substantial increases in unique daily visitors.

My original advice from May's column was:

"I propose advertisers monitor their positions for now and take a wait-and-see approach. The local search space is vital to Google's success and future growth. As Google shifts its strategy to more semantically-based search algorithms, I am sure we will see many anomalies that it will quickly revise. So give it a month; if it hasn't changed, I'll be refreshing my old column on directory advertising optimization."

Based on the fact that the local search results continue to favor directories, listing aggregators, etc., it's time to adjust your local strategy. First, review your local website traffic generation over the past few months: has it declined from last year/quarter? If yes, take a look at your specific organic search traffic to see if that is the root cause of any decrease. If yes, review your website content to ensure the content is optimized with localization (city, town, neighborhood, etc.) keywords and phrases. Review your website's local inbound links: do you have links from local sources like the chamber of commerce, business partners, the BBB, etc.?

Second, review your local directory and IYP advertising strategy/plan. If cost-effective, consider investing in performance-based ads to recapture any lost leads as a result of the position changes.

Of course, the best scenario in today's environment is that your business appears in a favorable position in the local listings section. Next month we'll update our list of techniques for optimizing your local business listings.


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Gregg Stewart

Gregg Stewart is founder and president of 3rd Act Marketing, a full-service marketing agency and consultancy, specializing in digital solutions, headquartered in Connecticut. 3rd Act supports businesses and agencies of all sizes, including Fortune 500 companies. With more than 20 years experience, Stewart applies his successful tenured career in interactive advertising and local search to the ongoing development of digital and mobile solutions for his clients' online-marketing campaigns. Through his strategic counsel, national and local brands become better equipped to target and reach niche consumers for increased leads and sales. In addition to his ClickZ columns, additional columns can be found in the Search Engine Watch archive. In 2013, Stewart was recognized with the ClickZ Hall of Fame award.

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