I am in the process of working on an onling city guide for a
metropolitan area af roughly 1 million people. My question revolves
around the revenue generating capabilities of such an endeavor.
I realize there are some big players out there such as CitySearch and
Digital Cities, bot of which have a presence in my city. However, my
target to those would be that my directory would be locally based, run
by a local, small business and would be focused strictly on providing
local business a cost effective means to advertise to the largest
growing market segment, internet users. As an aside, the city I am in
was rated in the Top 10 most wired cities in the US by Yahoo! Life
Magazine. Here is how I see things right now:
1) Obviously I am going against traditional advertising mediums such
as newspapers, radio and local television. These mediums can be cost
prohibitive to a lot of small businesses and their effectiveness,
especially radio and TV, is difficult to track. I am thinking of
offering free, basic listings which would list the business in a
single category with basic information (address, phone #, website link
and a map link) which would be listed in alphabetical order within the
category. An enhanced listing, which would have an annual fee, would
allow for the basic contact information, as well as a description,
online coupon that can be changed by the business owner at any time,
company logo or photo, customer reviews and ratings, and the web link
would be in the parent window as opposed to spawning a new window.
The enhanced listings would be listed at the top of the categories,
above the free listings. The owners of enhanced links would be able
to see the number of hits from my site that their link received (other
than their own web logs).
2) Marketing. Tough thing with this as it is a Catch-22. To generate
traffic, I need content. To get merchants to spend money, I need
traffic. There are several things I have looked at, but I keep coming
back to two of them: Google Ad-Words and Overture pay-per-click
listings. Being that the directory is regional/local, the cost for
Overture keywords is very inexpensive, outside of the big ones such as
Real Estate, which even then, is not that bad for decent listings.
Having researched over 100 key words and combinations of words,
example, CITYNAME Restaurants, CITYNAME Dentists, CITYNAME Florists,
etc, and seen the traffic reports, etc, I could easily generate
traffic to the site. They key would be getting visitors to see value
in visiting the site and want to return, which leads to content.
3) Additional Revenue streams. Banner advertising doesn't work. Or
does it? I would offer the ability for merchants to sponsor
categories, such a Chinese restaurant would be able to "sponsor" or
place a banner that would appear at the top of the Restaurants -->
Chinese category or even the Restaurants Category.
My question is how viable is this model? Long term goal would be to
roll sites out to additional cities over time, sticking with
populations of 1MM or less. If you can provide some example sites
that are similar in nature, that would be icing on the cake. Also, if
you can find any statistics on online business directories, etc, would
be nice also. I don't guess I am looking for concrete answers, but
would like opinions from business people, etc. If you want more
clarification, just ask as I have a rough business plan already
started.
Thanks! |
