How Many Categories Should A Local Business Have?

When dealing with someone, the first thing that you want to know, is who that person is. In the SMB world, this boils down to what category a local business belongs to. In the old days of the yellow pages, consumers were used to knowing search the pages for, and media companies were used to selling to many distinctly different categories of SMBs.

However, in today’s online reality, we find that many local businesses fall into multiple categories. For example, “L & G Drain Cleaning” from Falls Church, VA, has 5 categories on Superpages (Plumbing Contractors, Sewer & Drain Cleaning Service & Repair, Plumbing Service & Repair, Water Extraction & Damage Restoration, Fire & Water Damage Cleaning & Restoration).

I wanted to take a more scientific view of the matter, so I asked my team at Palore to run a few queries on our database, which covers millions of data points on SMBs’ online activities throughout the US.

The following chart shows the number of categories per business in a couple of large IYP sites around Alexandria VA, covering some 62,000 SMBs.

Number of Categories per Business

As you can see, while 40% of SMBs have just one category, most have two or more. This is not necessarily a bad thing; the fact that L & G Drain Cleaning has 5 plumbing related categories (see above) is beneficial for both consumers and the business owner.

However, anyone who has spent some time looking at SMB categories knows that there are quite a few mistakes and cases of abuse. Take a look at Empire Golf School from NY that is listed under the general “Schools” category, right next to colleges and Christian schools; or nearby Land’s Home Remedies that is listed under no less than 46 categories!!

From the business’s perspective, being listed under multiple categories is not a big problem. L&G Drain Cleaning probably would not mind being listed under the “Pizza” category in addition to his real categories . While he may get a few irrelevant calls, he probably would not mind getting the free advertising.

However, missing out on your main category is a big deal, as noted in David Mihm’s Local Search Ranking Factors, associating your listing with proper categories is critical for being found by potential customers.

From the consumer’s perspective, mis-categorization can be a cause for frustration – no one likes finding plumbers after running a search for “Pizza.” And this, by extension, becomes a problem for the local search sites. Search engines and, to a lesser degree, Internet Yellow Pages, are gradually replacing the categories model with a keyword-based model, but like any hundred year old tradition, it’s a habit that is hard to break.

Categories were great in the days of print yellow pages, where each business (usually) appeared under one physical section of the book, but nowadays, when a business can be listed under 46 categories, the time has come for a change.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Other | Small Is Beautiful


About The Author: is CEO at Palore, a provider of local businesses' advertising data and information on their online activity. He also blogs at The Palore Blog. This column is researched and written by the marketing department at Palore, which is led by Hanan.

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  • mcentorani

    Interesting article…and even though the largest % of SMB’s were only listed under one category in your findings, it would be even more interesting to find out all of the various ways each of those businesses make money. For example, after working closely with SMB’s for 25 years, rarely do you find that \A Plumber is a Plumber is a Plumber\. If you take the time to ask the right questions and really attempt to understand their business, most SMB’s have more than one focus area for their business, as is the case in the example you use with L& G Drain Cleaning (although one of the reasons they are listed in five categories with is because that is their standard number of listings they make available for all of their advertisers). However, with the various sales organizations across the US (specifically companies who sell SEM or IYP to SMB’s), many sales reps don’t take the time to really uncover, identify, and establish all of the various aspects of person’s business to make sure that they are represented properly under all of the possible headings/categories where they make money…and unfortunately many SMB’s don’t take the time either. So, many end up being represented under only one category or setting up only one ad group with one set of keywords and not giving themselves the opportunity to attract potential customers for all of the various ways they make money. It makes you wonder if this may have anything to with the high churn rates that many companies are dealing with who sell IYP and SEM (or the SMB’s who self-provision).


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