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May 17, 2004

Vertical Digital Directories Serve as Bridge to Online and Paid-Search Advertising for Many Local Businesses

New Kelsey Group report examines the role of vertical digital directories in local advertising; profiles leading vertical categories.

Princeton, NJ (May 17, 2004) – In a new 63-page white paper entitled, "Going Deep: Vertical Digital Directories," The Kelsey Group examines the role of vertical directories in local advertising. A "vertical digital directory" is an online property that provides deep amounts of structured content for a niche category, such as travel, real estate or home improvement.

Among the report's key findings is that vertical directories are currently serving a valuable dual function – providing content to search engines in response to local queries, while also offering a gateway to paid-search advertising for small and medium-sized businesses.

"Online vertical directories have the resources and expertise necessary to buy pay-per-click advertising and compete successfully with sophisticated, large advertisers for limited ad inventory on search engines," explained Greg Sterling, director of The Kelsey Group's Digital Directories: Interactive Local Media Continuous Advisory Service. "Many verticals have also adopted the search engine model for both consumers and advertisers."

By offering search marketing services to their users-whether directly or indirectly-vertical directories such as Lawyers.com and HomeGain.com are helping facilitate paid-search advertising adoption and educating local businesses about search-engine marketing.

Additional findings contained in this report include:

  • Verticals are increasingly mimicking search engines, adopting the "search box" as a primary way for users to find information. Many also offer advertisers a pay-for-performance lead-generation ad model similar to that used on Overture and Google.
  • Search engines are generally benefiting from the existence of vertical directories, even though the two are potential competitors for advertisers. By investing in paid search, verticals are delivering valuable content and local listings (typically indirectly) to the search engines.
  • Vertical-search engine/portal relationships will, in the short term, benefit both sets of parties. Partnerships appear to be the best strategy for both groups to, in the case of search engines, acquire local content and, in the case of verticals, drive traffic to their sites.

"Going Deep: Digital Vertical Directories," features a detailed look at verticals in the legal, health care, auto, shopping, real estate/relocation, home-improvement and restaurant/entertainment categories, and includes in-depth profiles of leading Internet properties within these key vertical segments.

This report is available to clients of The Kelsey Group's Digital Directories: Interactive Local Media Continuous Advisory Service. For more information regarding this service, contact Steve Vasil by phone at (905) 765-5910 or via e-mail at [email protected].

About The Kelsey Group
The Kelsey Group is the leading provider of strategic research and analysis, data and competitive metrics on Yellow Pages, electronic directories, small-business advertising and local search. Beginning in 1986, the company has built a reputation as the leading analyst firm covering the directory publishing community, providing advisory (The Kelsey Report® and Interactive Local Media), publishing (Global Yellow Pages™ and Local Media Journal™), consulting (more than 300 individual assignments) and conference services (60 events).

For more information contact:

Eileen Pacheco
(781) 556-1026
[email protected]

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