Should I abandon directories?

[InfabCorporation]

To say I'm new to SEO would be an understatement.  I am heading up marketing for a firm and they have zero web presence.  I've used Alexa.com to check out our competition and one site in particular has about 150 sites linking to it.  I dove in deeper and created a spreadsheet.  The majority of these links are sketchy, paid directory listings (or what look sketchy to me).  The confusing part is, they rank first on Google when I search for industry keywords.  Is it because of these directories?  Should I follow them or avoid them completely?

I'm planning on creating content and pushing that out to reputable industry sites.  I figured getting links/mentions from these would help SEO.  Should I only target these high value sites or would submitting articles to the directories with "article" sections offer any assistance?

It seems as though my SEO knowledge is limited to less-than admirable tactics, although not by choice.  I am planning to dive into paid search in the coming weeks but wanted to know of any "ground work" I could do aside from pushing content and paid search.  It seems like there are 1,000's of these paid directory sites and I find it hard to believe they will offer me a benefit...it's just the competition is on them and something is working.  Sorry this is so remedial, but I need to figure out where to go!

[KaneJamison]

So, first off, I wouldn't rely an alexa.com data for any backlink data. For that information you'll want to use OpenSiteExplorer.com and Majestic. Take a look through the links on these two sources to get a better idea of which valuable pages are linking to the site, since the highest Page Authority and Domain Authority links listed are likely giving them the most value.

Judging Directories:

If the page looks sketchy, then in most cases, that's a good indicator to not build a link there. There are exceptions, but gut instinct should be combined with checking the OpenSiteExplorer metrics for that site and that page.

Here's a good guide to judging whether a directory site is worth getting a link from: http://www.seomoz.org/blog/using-blekkos-seo-data-to-evaluate-web-directories-14678

Content Link Building:

In terms of building links for high quality content, you'll get a lot more mileage out of focusing on those high value industry sites. Anything directory-like for content is usually junk. Try B2B focused sites like LinkedIn and BizSugar for getting the content out socially, and use email outreach to existing and potential industry partners to get them to share your content with their audience. Here are some good email outreach templates to get your started: http://www.seomoz.org/blog/linkbuilder-gmail-productivity-setup-and-outreach-examples

In short, your gut instinct that those paid directory sites will offer you little benefit is correct for the most part.

[Paul78]

Hi Ryan,

Regarding directories, this is an interesting one as you hear time and time again that directories are worthless, so I thought I would do an experiment some keywords.

The experiment was targeting directories in my niche with 5 keywords which were not very competitive, however still had exact monthly searches ranging from 1000 - 3500.

Over a 3 month period I saw SERPs increase for all keywords:

Keyword 1 - Went from position 18 to 3

Keyword 2 - Went from position 9 to 3

Keyword 3 - Went from position 4 to 2

Keyword 4 - Went from position 9 to 6

keyword 5 - Went from position 9 to 6

For me this shows that directories can still work for you.