When IAC’s CitySearch acquired user-generated business review site InsiderPages last week, it may have looked like just another deal in the constantly-ebbing world of local Web directories. But it could be a signal of things to come, as directory sites seek more ways to drive traffic to their advertisers by bolstering their SEO prowess. A new report from the Kelsey Group forecasts print yellow pages, IYP and local search growth over the next five years, showing IYP sites as forceful contenders in the directories game, in part because of their increasing search mettle.
Although local search is poised to reach $2.6 billion in U.S. revenues, up from $922 million in ’06, IYP will grow at a faster clip in that time. The “Global Print Yellow Pages, Internet Yellow Pages and Local Search Forecast 2006-2011” report from The Kelsey Group predicts IYP revenues will rise at a nearly 30 percent annual growth rate, from $624 million to $2.3 billion in 2011, compared with about 23 percent growth for local search through 2011. Print in that time will remain relatively stagnant, moving from about $14.4 billion to $14.9 billion.
In the hopes of driving visitors to advertiser landing pages, IYP firms and directories sites will want to improve search engine optimization of those pages, rather than relying solely on paid search to drive that traffic. “That’s pushing them into the SEO market,” said Matt Booth, SVP program director at Kelsey.
The recent acquisition of InsiderPages by IAC/InterActiveCorp’s Citysearch is a “great example” of a business listings publisher using SEO to reduce the costs of driving traffic to its site, Booth said. “If [Citysearch] can add more content, there’s a higher probability someone will come to that page from a search engine.”
InsiderPages competitor Yelp relies on SEO to bring visitors to its local business reviews, in addition to direct navigation and e-mail newsletters. “We spend almost nothing on the paid [search] side,” Yelp Director of Communications Stephanie Ichinose told ClickZ News.
Of course, more standard distribution deals will continue to drive traffic to IYP sites. Yesterday, for instance, Idearc Media Corp. signed an agreement to distribute its Superpages.com advertiser listings on local search site Local.com, giving them enhanced placement in the “Featured Sponsors” section.
Local search advertising is dominated by chain operations that have the ad budgets and sophistication to optimize and target a huge number of keywords, said Kelsey’s Booth. Small and medium businesses rarely have the time, knowledge or money to compete. They do, however, have long-standing relationships with yellow pages publishers eager to steer mom-and-pop dollars to IYP sites.
According to the Kelsey report, local sales forces have the opportunity “over the next several years to bridge the search gap and will offer robust SEO/SEM services to advertisers.”
In order to ramp up its search consulting services, YP publisher RH Donnelley bought local search marketing consulting firm LocalLaunch in September of last year. And in January, Citysearch opened a new sales office in Atlanta, with plans to nearly double its sales force.
The report also notes that as more small businesses spend on local search, ad coverage in particular locations and business segments will rise 7 percent. Kelsey also predicts the average ad conversion rate will increase 18 percent and average cost per click will rise 19.7 percent. Vertical search sites will also see an uptick in interested local advertisers.
All in all, said Booth, there’s no end in sight to changes in local IYP and search. “It’s so early in this game that we have years and years and years to go before there’s any big shakeout,” he said.
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