The fight to hang on to its lucrative classified dollars is growing tougher for newspapers. Another Web threat has emerged to join the Craigslists of the world in taking away classifieds from publishers.
Broadcasters, such as local television stations, looking for online revenue streams for their Web sites, are pushing into the market and forming alliances that newspapers are still in the process of developing, new research says.
In a report release by Classified Intelligence LLC entitled “Broadcasters and Classifieds: Major Growth in Major Markets,” 95 percent of top 10 market Web sites reviewed now offered ads in one or more of the major classified areas: cars, homes, jobs, and general merchandise. In smaller markets, that number is lower at lower 59 percent. Cable and radio also are showing increased interest.
“Business has become very difficult for newspapers. Real estate has fallen off, recruitment has moved steadily online, and automotive advertising has just tanked in general,” said Peter Zollman, founder of Classified Intelligence.
While classified ads are newspapers’ cash cow, traditionally feeding an important part of a paper’s budget, publishers are seeing a growing impact on that revenue from Craigslist, eBay, and other marketing sites.
And it’s not as if they’re just sitting on their hands, either, according to a statement from Beth Lawton, manager of digital media communication for the Newspaper Association of America.
“Newspapers have always been a strong source for classified advertising, and that continues to be true. In fact, newspapers are strengthening their position by using new technologies, such as mobile and enhanced online classifieds in creative ways to help readers with their jobs to be done.”
Newspapers aren’t the only media undergoing advertising transformation. Television is based on 30 second ads, and technologies like digital video recorders that allow you to bypass ads are shaking up broadcasting, Zollman said. Broadcasters are pushing to capture their piece of the online revenue pie. They are hoping to ride the ubiquitous Web 2.0 movement with Web site community building efforts, and that includes local classifieds.
While the competition between the different media Web sites is intensifying, newspapers are not bowing in defeat.
The latest numbers from Newspaper Audience Data show a continued growth in visitors. In the second half of 2006 , newspaper Web sites averaged 57.3 million visitors a month, up 15 percent from the same period a year ago.
In addition: Nearly three out of four adults in the top 50 markets (about 115 million people) read the newspaper over the course of a week. 65.8 percent of 18- to 34-year olds in the top 50 markets read a newspaper during the course of a week 76.9 percent of 35- to 54-year-olds, and 84.2 percent of those 55 and older, read a newspaper in the previous week
“We have to keep our perspective. Newspapers are still the kings of the hill here,” Zollman said.
Faced with broadcasters looking for new methods to lure viewers and readers to their sites, newspapers are looking for new ways to generate revenue through classifieds. In some cases, the two are choosing to work together, combining resources to create news services and portals that also incorporates partnerships with other business rivals, such as Monster.com and Cars.com, said Zollman.
Another area of potential growth is the mobile arena, which appeals to newspapers and broadcasters alike because it includes dipping a toe into the magic Web 2.0 pool. Fledgling mobile classified ads services are offering mobile phone users the opportunity to post or pull classified ads to their devices, and are incorporating video and photos into that mix.
Targeting the handheld market means targeting a more specific marketing audience, said Brad Holcomb, VP of Operations for IQZone.com, a mobile service for creating and receiving classified ads. “We’re targeting a group that is age 35 and under.”
The use of the mobile phone for classifieds is in its infancy, but should grow steadily, said Zollman. “What’s appealing to advertisers is that with the phone, we know where you are and we know who you are. For example, if you’re looking for a home, I can send you video clips, pictures and directions,” he said.
Regardless of the delivery mechanism, be it a Web site or a mobile device, IQZone’s Holcomb sees overlaps in the partnerships of the media organizations growing.
Partnerships make sense, said Zollman. “For many broadcasters, they would be building this from scratch.”
