Should you outsource your directory business?
For many publishers, especially in the B2B world, directories are a reliable yet resource-intensive source of revenue and content. Directories and buyer’s guides often require large amounts of data to be updated yearly by editorial teams, while sales staffs sell premium listings at a fraction of a typical print or online advertising campaign.
"Directories are a headache for editorial staff. They'd rather work on more fun stuff," says Hale Fulton, founder of Fulton Media, a consulting firm that manages mostly tech equipment buyers’ guides.
Adding to the directory woes, many publishers struggle to translate their long-successful print directories to the Web. As a result, dozens of third-party vendors have created businesses out of taking on the online directory workload. For publishers that are looking to get out of managing their online directory entirely, some vendors will take over every aspect of the directory process handling data collection, technology, sales and payments.
“Publishers are more than willing to hand [directories] off,” says Viki Zabala, VP of Marketing for Jazd, one vendor that takes on the entire directory workflow.
These “complete suite” vendors take a publisher’s existing data, often the remnants of a print directory, and create an online offering with the vendor’s technology and the publisher’s branding. The vendor will then take a revenue share of the total sales. Mediabrains, for example, takes 70 percent.
"They say: ‘Here you go, make us some money’," says Jay Steffey, sales director at Mediabrains.
In Jazd’s case, the company spends a week researching the publisher’s users, existing taxonomy and branding. Depending on how much data is provided by the publisher, a directory can be operational in just over a month.
However, some experts caution against publishers surrendering complete control of their directory business to a service provider.
"You can outsource some of the mechanical aspects, like web development," says Russell Perkins, founder and managing director of information publishing consultancy InfoCommerce Group. "But it’s dangerous to yield too much of the process to third parties. You want to stay relatively close to the data."
For those who would like to maintain a little more control and responsibility, there are vendors who offer the directory platform using a “Software as a Service” (SaaS) model where publishers pay a yearly subscription to use the vendor’s technology but still maintain control over the content in the directory.
“The revenue pie is bigger [when outsourcing the entire workflow], but publishers are giving away so much more of the revenue,” says Sue O'Keefe, director of marketing at mBlast, an SaaS vendor.
mBlast offers its technology for $7,995 a year, placing the sales and data collection responsibility with the publisher. With some technical knowledge, publishers can fit their directory into an existing template or use the company’s API to integrate the data with other data products.
Such vendors typically offer a feature to allow users to add content to the directory but will not take on any of the data collection responsibilities. While O’Keefe says mBlast can track the sales process, the company won’t dedicate staff to publisher directory sales. That’s a deal-breaker for some publishers.
"My clients are often relieved to turn sales over to an outside vendor,” says Fulton, who says he subcontracts sales to telemarketers.
According to Fulton, sales staffs often struggle to sell online directories, because they were typically free add-ons to print directory buys. However, as print directories become antiquated, it is difficult to assign a sales staffer to sell against the online directory, as the cost and commission are much lower.
The often-difficult transition from a print focus to a digital focus is a key reason publishers choose to outsource to vendors in the first place.
“When you move from a print to an online directory it’s a change of attitude,” says Steffey.