Let’s say Vinnie just opened up Vinnie’s Pizza in Brooklyn New York and he’s evaluating a variety of different websites and publications to advertise his new business on. He’s narrowed it down to a few publications such as :

• New York Daily News
• New York TImes
• Brooklyn Ledger
• Brooklyn.com
• EatBrooklyn.com
• BrooklynPizzerias.com

Even though he’s narrowed these down to pretty specific, niche publications, he could eliminate The New York Times out of the picture almost solely on cost. It’s not cheap and measuring the ROI in a Newspaper isn’t easy. As someone running a new business, Vinnie knows the importance of measuring his ROI. He could advertise on New York Daily News because he knows their circulation spans across the entire city, but his message stands a better chance of getting lost in the shuffle and as a city-wide publication in New York, cost could still be prohibitive. Furthermore, even though Vince knows the Brooklyn Ledger is a good, relevant publication, it’s where people go to read local news, not necessarily find lunch or dinner. Why does Brooklyn.com and Eatbrooklyn.com or BrooklynPizzerias.com look so promising? Simply put, Vince knows the reason why people GO to sites like these is to FIND businesses like his. They’re looking for restaurants in Brooklyn and he can’t imagine a more targeted demographic to be hitting.

This is why online directories generate revenue. In a world where businesses can make more educated, targeted ad buys – where everything is about ‘local’ and ‘hyper local’ niche sites, online directories are finding their way into businesses advertising purchases as the premier place to list their business. When I open up my Pizza shop, I’m not going to cross my fingers hoping the ad buy from newyorkdailynews.com drives traffic to my restaurant, I’m going to be able to know that I’ve targeted my ad to a thin, ideal demographic, and get analytics on how my ad performed.

And now put that all into perspective. Vince is one of many customers of mine, as someone that owns BrooklynPizzerias.com. In fact, Vince may only pay me $100 a month to be a Spotlight listings customer, but every month, through recurring billing, he’s paying $100 a month, along with 50 other business paying the same rate for other business listings…month in and month out. And this is only those paying for Spotlight listings – this doesn’t include those that are paying to post Daily Deals, Events, Articles , Classifieds or banners. As a publisher, directories offer a business model driven by recurring revenue over multiple streams of revenue on the site.

If I’m a personal injury lawyer, why wouldn’t I advertise on a directory where people GO for the sole reason to find a personal injury lawyer? These directories, whether they be locally focused or industry focused, are premier advertising vehicles for businesses both small and big.

We work with publishers like WholeFoods Magazine to launch directories specific to their publication, like Whole Foods Magazine Source Directory, where visitors can find thousands of Associations, Distributors, Industry Suppliers, Manufacturers , Publishers and more. If I run a magazine or website about Boating, what better place for Bayliner to advertise their line of 2012 boats than a directory of new boating products, parts, accessories and shows? People use online directories to sift through thousands of businesses to find the one they are looking without having to go through dozens of search results and hundreds of results pages to compile a list of businesses. For publishers, this information packed directory becomes a vital component to their publication, and with it, an additional source of multiple revenue streams like listings, events, deals, articles, classifieds and more.

Remember the Kayak example — why do people like Orbitz and Travelocity? Because it’s better than going to Budget, Thrift, Southwest, Sheraton, Hampton and United’s websites to book a trip. Why do people like Kayak? Because it’s easier than going to Orbitz, Travelocity and Expedia to book a trip. The more consolidated you can present your information, and make the experience for your visitors that much easier, you create an unparalleled opportunity to capture a great deal of ad revenue that’s trickling down to smaller publishers.