01-01-05 | Printable Version

Classified Outlook 2005

by Jim Townsend, Editorial Director, Classified Intelligence

As a publisher, you face the same challenges in 2005 that you did in 2004 - a slow slog through a marshy economy back toward solid footing. But here’s a new warning: The competitive threats that were only nagging little ankle-biters nibbling at your revenue have since grown claws and fangs.

You can’t avoid the muck you’re in already. You can avoid getting sucked under.

Threats in 2004

Among the issues the industry faced in 2004 were retailers closing stores, local-search advertising on the Web, new ad initiatives from yellow page publishers and expansion by Craigslist (now 25% owned by EBay).

It got harder and harder to maintain interest in the newspaper among your big classified advertisers – employment agencies and major employers, real estate brokers and car dealers. Granted, employment showed double-digit growth, but it’s hardly a healthy franchise.

Craigslist, with its free-advertising networking model, launched its 75th city. If not yours, yours might be next.

EBay launched an instantly successful “want-ads” section, bought real estate site Rent.com and spent nearly $1.3 billion to acquire e-commerce and classified advertising properties in the U.S. and abroad.

Finally, employers will soon get a new Internet extension – dot-jobs – that could easily become job-seekers’ preferred shortcut to searching for a new position. For example, want to work for Boeing? Type “boeing.jobs” and you’ll see all the jobs Boeing has posted.

More in 2005

Here are some trends we’re watching.

Craigslist keeps growing as a tough competitor – partly because it’s run like a counter-culture service for friends, not a traditional business. And EBay keeps growing because it’s probably the smartest business out there. When EBay sees an opportunity, it gets competent – real fast.

Yellow pages are combining with classifieds. Putting the strong, frequently updated database of a local classified advertising publication with the rich directory data of telephone yellow and white pages may create the best local online shopping experience for users.

As more users turn first to search engines for products and services, and Google and Overture (among others) surround those results with useful targeted ads, local advertisers are learning to post pay-per-click ads to generate business.

Many publishers are using databases compiled online to output material for new print publications. Great cost-cutting potential; excellent new-product development opportunity.

Customers buy things online. They want to place ads online, too. And when they do, if you make it easy for them, they spend more money. These services are growing steadily, as they should.

How to Respond

Each of these trends is changing your business. The single, most fundamental thing you can do to compete is to change your mind. Reframe your references – a little humility wouldn’t hurt – and the rest will fall into place.

They’re not readers; they’re customers. Remember that every minute, every dime a person spends with your products is by choice – and not a high-priority choice at that.

Information interests are highly personal. No one, ever, reads your paper cover-to-cover. Understand the importance of delivering content – news and ads – that’s most relevant to each individual consumer, and figure out how to do it.

What are you doing to build a sense of community within your community? Are you fostering interaction between its members or are you merely blasting one-way messages to them? How are they interacting with you?

Think of your business as a conduit – connecting each individual to his or her community. Certainly think of your ad business that way: Your mission is to connect buyers and sellers. It always has been.

Finally, don’t forget you’re in a service industry. If you serve your audience – no, audiences – with useful, relevant information, whether it’s editorial content or advertising content, and you serve your advertisers with the best ad products they can find in your community and internationally, you’ll have a strong, growing, sustainable, profitable business.

Classified Intelligence is a consulting group that works with newspapers, dot-coms, broadcasters and yellow page companies to help develop more successful interactive classified advertising services.