Aligning the folders in your directory path with the structure of your web site not only improves SEO but also eases navigation – each category naturally contains a menu page for the topic in its folder. SEO-friendly URLs coincide with user-friendly navigation.
The web site of The New York Times provides an example. It organizes its content by topic – often starting with a traditional news category, such as sports – and then by subtopic, such as baseball, hockey, soccer, and so forth. The SEO-friendly URL for the menu page of the sports section is http://www.nytimes.com/pages/sports/, but shortening it to http://www.nytimes.com/sports/ works, too.
A hierarchical structure that includes main topics and subtopics, all identified by their folder names, shows both readers and search engines where your information resides, helping search engines accurately categorize your site’s content.
Another practice that benefits both users and SEO is to break up the content of a page into sections marked off by subheadings that contain an HTML anchor. Longer pages should include a TOC. For more information, see my article on using HTML headings tags for SEO.