Part 2 – The Local Search Advertising Business Model

by on November 28, 2011 · 2 comments

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Welcome to the second post in this series. In the last post I touched on the results I’ve had creating a specialized directory-style website that captures niche local traffic. The example I supported was a restaurant website that hosts downloadable PDF menus for over 70 restaurants in the Southside of Pittsburgh. In this post I’d like to explore the possibilities of this business model and demonstrate creative ideas to expand the concept beyond restaurant type websites.

For those of you joining now here is a link to all of the posts so far.

Using YellowPages.com to Brainstorm Ideas

To help open the door for more site ideas, go to www.yellowpages.com. Rather than typing in a query, browse by category and take a look at some of the most popular categories. These are types of business categories Yellowpages receives the most searches for. Consider how many options there are to create niche sites and rank highly in search engines.

Using Google to Identify a Niche

In order to succeed you must select a niche and area that has established traffic. In the example of Southside Pittsburgh Restaurants I knew the term “Southside Pittsburgh Restaurants” was searched at least 1,500 + times per month on Google, with other variations of that keyword phrase searched often as well. I will go over how to use Google tools to find a high traffic niche in the next post.

Defining a Good Niche by the Area & Number of Competitors

When brainstorming a niche to choose, consider the size of the area you want to target in relation to the number of businesses to list. In terms of the Southside there are about 70 restaurants in the area. This is enough so that visitors to the website value the convenience of having the menus listed in one place. At the same time 70 restaurants is plenty to keep up with on my part.

While Southside is a neighborhood tailored to restaurants, there are other possibilities for a city-wide niche. One example may be a website listing Pittsburgh DJs. This is a niche were competitors often travel and there are fewer businesses within a large area. This model thrives when the number of competitors in a given area is high enough that there is strong competition and consumers are faced with several choices.

Consider how these sites could work with fewer competitors. For instance, 3-4 yoga studios competing in an area like Georgetown. But, inevitably this reduces the potential pool of advertisers. Each niche has different variables. It’s reasonable to think that if a site ranked number one for a highly targeted keyword and listed 3-4 businesses without visibility on the first page of Google the value of the site would be high. In the next post I’ll breakdown how to evaluate a niche based on Google results.

Revenue Models

This part of the business model is subject to some debate and I believe is dependent on the amount of sales effort you’re willing to put forth. I’ve had a lot of people ask me why not just charge each business a small fee to be included. I like the idea in theory but scaling the sales effort is difficult.

A major problem is that I would need to develop a revenue-generating relationship with usually 20 to 30 business owners. That is going to put a lot of stress on making this model profitable (unless you love sales or don’t care how much time you’re investing), and may require several months of diligent sales work. The upside is that you could create a paypal payment portal which would automatically charge a business owner’s credit card a small fee every month. Another upside is that you could charge as little as $10-20/month to be listed and hopefully find enough businesses to agree to a long term sign up.

Personally speaking, I’ve opted for the 1 advertiser model. I strive to develop a relationship with a few owners and pitch the value of getting premium listings on the site. I also believe experimenting with affiliate relationships, banner ads, or Adsense is a good idea for those of us less inclined to do the ground work on sales. Again the revenue and sales is undoubtedly the X factor of this business model. Building a user-friendly site and SEO is very predictable. I will have a full post dedicated to sales concluding the series.

Conclusion

This post was meant to provoke a deeper understanding of the possibilities and expectations of this business model. As mentioned above, sales are the X factor in regards to potential earnings. Every niche is different and every niche has potential for successes or failure. A huge positive is that outside of time, the fixed cost to create a site is quite small. Over a 5 year period your hosting and startup costs will not exceed $250, plus multiple sites can be hosted on one account, further helping to scale costs. Here are some guidelines when pondering these sites.

  • Choose an Area & Niche With at Least 10 Competitors, Maximum 50 to 75.
  • Study the Google Results & Look for Organic Ranking Opportunity Above Map Listings.
  • An Area Can Be As Small as a 20 Block Stretch or an Entire State.
  • Launch Sites Close to Where You Live; This Enables Face to Face Sales.
  • Include PDF Downloads/Listing; PDF Downloads Can Be Tracked Using Google Analytics.
  • Follow Search Trends; Select a Site Based on Keyword Search Data Provided by Google.

Using the SmallBiz Theme for Local Websites

This series shares advice related to all aspects of building local listing websites including sales, choosing a niche and web design. I build my sites on WordPress and recently switched to the using the SmallBiz Theme for these types of sites because of the speed at which I’m able to launch a quality site that is supported with help forums and a platform that is search engine friendly.

Go here to learn more and tour the SmallBiz Theme.
Go here to visit my site example for Ballston Restaurants and Ballston Hotels

About Jeff

Jeff Howard has delivered SEO results for major consumer oriented websites all the way down to local businesses and writes a column for Search Engine Guide.

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Jeff has written 21 articles on Expand2Web

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See my disclosure about advertising and affiliate links

{ 2 comments… read them below or add one }

Charley November 30, 2011 at 5:04 pm

So using the Southside Pittsburgh restaurant website as an example, you earn revenue through the paid sponsors – Mallorca and Ibiza – and then with the Groupon ad? Is that correct?

Reply

Jeff Howard December 2, 2011 at 8:24 am

Hey Charley,

I’ve tested the Groupon over 2 months now and it has done nothing. So I don’t believe that the website gets enough traffic to do Groupon. I’m always trying to brainstorm ideas for affiliate style ads rather than do local advertising.

It would help if the site got Facebook advertising, or I had cards / banners in the restaurants / local stores. Mainly with this series I’m trying to show the technical side, business basics, and SEO model and open a discussion with a larger audience for ideas.

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