Online Directories Not Paying Off

A report by Forrester Research examining online directories concludes that advertisers are not getting a return on investment for their listings. Forrester surveyed 70 merchants that advertise on directory sites as well as directory publishers for the report.

Despite their lack of responses, Forrester found that more than half of the advertisers surveyed plan to renew their contracts, as they expect online directories will pay off sometime in the future. The companies surveyed for the report indicated they plan to increase their online directory spending by 30 percent over the next two years with median annual spending increasing from $1,000 to $1,300.

Those merchants who are deriving business from directory ads are typically advertising in niche business-to-business guides, leading Forrester to predict that the massive, yellow-page-type directories may soon be replaced by smaller, more focused directories. Forrester predicts that focused directories will increase their market share of online directory spending from 10 to 80 percent over the next five years.

Forrester found that most online directories are held back by bad data, which is caused by a lack of updates; limited information; and little consumer utility. A lack of online integration, no links to relevant verticals and no email links to brick-and-mortar businesses, also restrict online directories, the report said.

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