Competing against free classifieds can be done
January 13, 2016
By Peter M. Zollman
AIM Group | Classified Intelligence
Everyone’s heard it: “Newspaper classifieds are dead.” Or, “Craigslist killed newspaper classifieds.”
It’s not that simple.
Many newspaper companies are still in the classified advertising business, bigger and stronger than ever. Two of the largest classified companies in the world, Schibsted and Naspers, are “post-newspaper media companies.” They generate a large part of their revenue and profits from classifieds, even though many of their classifieds are free.
“But how can we compete with free?” I can hear you screaming.
First answer: “It’s not easy.” However, it can be done. You can strengthen your revenue, your readership (in print and online), and your community with classifieds. Even free classifieds. Yes, revenue from free. It’s called “freemium,” and it’s the new business model worldwide for classifieds. If you want to be in the classified business, you’d better embrace it. The old model is dying. Maybe dead. So what you do now has to be radically different than “what we used to do.”
“Protect print” is dead. Or it’d better be! If you think you can “protect print,” ask your daily newspaper colleagues: “How did that work out for you?” You know the answer: It didn’t.
By focusing time and energy on classifieds, your revenue will go up and you’ll be serving your community better with your classifieds, both online and in print. Because, after all, everyone needs a place to live, a car or a bike or a boat, a job or a few new employees. Or they have stuff to sell or buy (especially after the holidays!).
What do you need to do?
• Go from “print-centric” to “digital-first” with classifieds. I’m not talking about editorial content here. But if you’re taking the classifieds from your paper and “putting them online,” to quote a New Yorker, “fuhgedaboudit!” That’s the perfect opening for competitors, which offer much more than a few lines from print. You can beat them at local. You must. That’s the only advantage you have. Don’t roll over and play dead, even though the competitors are already in your market—whichever market you’re in.
• “Protect print” is dead. See above. It didn’t work in the U.S., it didn’t work in Europe, and it won’t work for you.
• Critical mass is (pardon the pun) critical. If you don’t have almost as many listings as the leading auto site, property site, recruitment site or “stuff” site (for c-to-c and small-business single-sales to individuals), you’ll lose. Build critical mass. Which means you have to offer free classifieds and profit in other ways. Get used to it.
• Freemium is the future: You have to start with free ads and find ways to get people to open their wallets or checkbooks. It’s working. Everywhere in the world. So you can do it. Ask your technology vendor how. (Or ask us; we’ll show you.)
• The ultimate upsell is print: Freemium doesn’t have to mean print is free (although it’s a good idea for “stuff” ads). Run ads online for free; charge to put them in print.
• Work with other companies, even competitors. Schibsted did it; Naspers did it; you can too. Even work with other newspapers. Why not? If everyone wins, everyone wins.
• Become “device independent.” And that includes newsprint. You need newsprint, it needs you. But newsprint is just another device. if you’re not also outstanding on mobile/website/desktop/tablet, you’ll be beaten like a drum by the competitors who are.
• Encourage advertisers to place ads for themselves, for print and online. It’s a time saver; it’s a money saver; it’s a revenue generator. Just do it. And you don’t have to replicate your print process (or pricing) to make this work.
• Build sales. At one point, classifieds just came in the door (or into the phone room). Not any more. With so many choices, you actually have to sell them. And not just with ads in the paper; that’s called “preaching to the choir.”
• Focus on mobile, mobile, mobile. Soon it’ll be 80 percent of traffic. (In some places, it already is.) Go where your audience is.
• Invest, invest, invest. You can’t make this happen with nothing. You don’t need millions, or even thousands. Invest time, if not money. The right vendors can help you for free or for a piece of the pie.
• Be willing to experiment. Be willing to try new things. Be willing to fail. Or you surely will. © Peter M. Zollman 2016
Peter M. Zollman is founding principal of the AIM Group/Classified Intelligence, a global consultancy based near Orlando that helps newspapers and other companies strengthen their classified advertising revenue. E-mail firstname.lastname@example.org, call 407-788-2780 or visit AIMGroup.com.