Directory submission seems to be one of the popular SEO services, as it is sometimes only one of the few ways a starting website can get incoming links. But is it worth spending your time or even $100-$200 for submitting your site to 500+ directories?
There are different types of directories: paid directories, free directories and free reciprocal directories. Each of them differs in how much value it can give to you and how much they take from you.
Paid directories are supposed to be of higher quality just because not everyone pays to get in there. They also have editorial control, which makes them more respectful than free non-reciprocal directories. But the pages that link to you from the directories don't have much relevant content on them and almost no visitors, too. What paid directories can give is links, though.
Thus, buying links from paid directories isn't as good for the above reasons, but if you have a large budget, entering paid directories may be worth it to give you a slight boost. Some argue that buying a link from Yahoo! is worth it, too.
Free directories are different from paid directories in terms of quality control. Some may even accept anything. Most will link to anyone requesting a link. That's why directories aren't trusted much by the search engines.
Free directories have even less traffic than paid directories, so don't expect any visitors from them.
There is a couple of quality free directories, such as DMOZ, but they are rare and you need to follow their guidelines strictly to get in. Submitting your site to DMOZ is a whole another story altogether, too.
If you have extra budget, you may want to get someone else submit your site to directories, but don't count on a huge impact from it.
Free reciprocal directories
Reciprocal directories are different from the free ones that ask you to link to them. Since you'd rather not link to someone who links to anyone, these should be avoided.
How to submit
If you do decide to submit to directories yourself or using directory submission services, you need to know a couple of things beforehand.
It is best to know your keywords before submitting to directories. You'll use them in the titles. But don't overdo with them - write human friendly, keyword rich titles.
If you get many links with the same anchor text (title descriptions in directory submission), those links may seem suspicious, if you don't have a heavy internal linking background. So a good advice would be to use as many unique titles as you can, probably around 3-10.
Spending months on submitting there is a useless waste of time for a business owner, so you'd rather use some directory submission service.
Some services are reliable, such as www.addurl.nu of Jim Westergren, and cost quite a bit ($250 here for 500), other services mostly have no reputation but cost about $100-125.
Alternatives to directory submission
As mentioned earlier, directory submission may be one of the cheapest way to get links. As it is, it also gives one of the types of least valuable links as well. If you want to provide value to your customers, you'd rather spend your time and money on more constructive activities.
As a matter of fact, one of the most efficient ways of getting links is creating unique quality content for your site. This is the best linking and targeted traffic strategy out there and it'll be for a while.
This is mainly done by doing a keyword research and creating content for the keyphrases.
For instance, if you get a freelance article writer, you may get about 10 quality articles on your topic for $100. (Just check the articles aren't a mishmash of other articles or a copy..that's another topic, I guess.) If you get about 30-50 interesting, in-depth on-topic articles for your site, you'll be getting a noticeable amount of traffic and links.
Of course, if your site is new, you'll need to promote your site with other methods as well.