Why It’s Important to Categorize Your Business Properly in Local Search Engines

When creating a local listing for your business in search engines like Google, Yahoo!, Best of the Web, and Bing, you will be prompted to choose two to ten categories that describe your business. This is an incredibly important step. Local SEO experts cited proper category associations as the most important signal of relevance.

Search engines use category data to determine which businesses to show for particular searches. In the early days of local SEO, Yahoo! Local’s Shailesh Bhat provided a very sound explanation of the function of categorization:

“In cases where we do not have a self-serve listing, where the merchant has not provided any data, but we have data from other sources, we essentially look out for the degree of agreement between various sources. That is one heuristic element that helps us in figuring out the right category.

In 2013, local search expert Mike Blumenthal stated:
“Categories are a critical piece of how Google determines the relevance (not rank) of a listing in local search … “

In general, search engines will consider your business listing as being primarily relevant for sets of keywords that relate to your chosen categories. Failure to choose categories or miscategorization will severely limit the visibility of your local business listing. You’ll find yourself edged out of the results by competitors who have properly categorized their businesses.

Mike Blumenthal highlights a humorous example of a miscategorization of advertising agencies. In the last several years, the search engines have since done a pretty good job of cleaning up dramatic mistakes like this one, but it helps to underscore the need for proper categorization.