If you run a directory, then you would be aware that there are many competitors offering advertising products to your advertisers and charging them on a performance basis. Eg. groupon, google, servicemagic, myhammer, yelp …. eg. John the Plumber, you need only pay me for the leads that I send to you) – rather than charging John on a subscription basis eg. John, pay me $600 to get your listing in my directory.
The problem with the subscription approach is that it provides no upside for a directory for increasing its consumer traffic – and therefore other players who do have an incentive to increase consumer traffic (like yelp, google, groupon …) are increasing in relevance as yellow pages are declining.
Today, if a yellow pages directory doubles its traffic, it will not double its revenue – however, if google doubles its traffic, it can double its revenue.
Directories can resolve this conflict by introducing a pay per performance product which increases directory revenue as the directory increases the volume of traffic to its site. This is done by integrating a performance marketing offering into the paid inclusion listings – in a staged approach (vertical by vertical) without cannibalizing revenue.
We have reviewed the major models in the lead generation space and have found the Request for Quote model to be best suited to directory businesses because;
- Marketing funds can be allocated to known ROI’s because revenue is indexed to consumer growth,
- The additional RPS (revenue per search) allows directories to command higher ranks on Paid Search – which increases your share to the detriment of your competitors
- The CPL model reduces individual advertiser risk. Unlike listings, if any single advertiser withdraws they are replaced by another maintaining the RPS (Revenue Per Search)
Previously the addition of this ‘Request a Quote’ capability has been expensive to develop and requires unique skills to manage – with Quotify’s RFQ in a box solution, directories can simple plug and play and start capturing a new revenue stream.