Craigslist: the scourge of newspaper classifieds
If you've read articles about a man named Craig and his free online classifieds, you've probably noticed Craig's smiling face in the accompanying photo. Well, Craig has a lot to smile about. He now has classified sites in almost every major US city and in about 100 cities around the world. Newspaper execs hate this guy. And for good reason. According to a London consulting firm, in its relatively short existence, Craigslist has "destroyed" approximately 75% of US newspaper classified pricing, rates on which just last year newspapers depended on for over 35% of their revenue. Danny Meadows-Klue in the UK's The Guardian writes, "The list is not bad news; it's terrible news. The business model cuts at the heart of newspaper profitability and does so with such elegance, and is so intrinsically orientated to the new economy, that you can't help but shrug and say 'this is the future.'" Well, yeah! Every article written about the San Francisco based .org cites the impossibility of newspapers to compete with such a phenomenon.
Example: New York Metro recently wrote an article that proves Craigslist's huge competitive advantage. Not only does the article state that Craigslist receives 50,000 new NYC classifieds a day (25 times as much as in 2001), but also, "In its pre-Craig, May 4 1999, issue, the Village Voice listed 821 rentals and 88 sublets. May 4, 2005 saw 430 rentals and only 8 sublets. On Craigslist, rentals and sales listings are now at about 20,000 and 2,000 per day, respectively. And it allowed more owners to sell or rent sans middleman (no fee!)."
Personal anecdote: I was once looking to sublet my apartment and posted a late night 500 word description for free. I had 10 responses by morning in my email inbox. I am currently looking for an apartment. Last night I found two places that I liked. I know I liked them because there was detailed descriptions and pictures, one even with a link to show me exactly in which part of the city it was. So I emailed them. This morning both landlords responded to me.
Something else I noticed. Say you're moving across the country or overseas and need to find an apartment. Craigslist has you covered since the Internet and email know no physical worldly boundaries.
I'm sorry, but you can't tell me with a straight face that a 150 character classified ad on a jumbled page of black and white that I have to pay for can beat that. I hate to be the bearer of bad news, but it doesn't appear that newspapers are going to be able to trump Craig's model. They could, however, join him, as some papers have started doing (see previous posting). Newspapers could simultaneously place advertisements in their (free) local online classifieds as a means of revenue. Local customers may end up trusting their newspaper more than a broad global phenomenon.
Sources: Media Guardian, New York Metro, The Washington Times
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Interesting read. Newspapers are going through a tough time between classifieds and bloggers. I was just informed of another site http://plugstar.com that seems to be running a new classified community for all states. This could get interesting.
Yup, Craig has defined the new model.
Now, as a big fan of the local alternative rags here in the Portland Metro area, I have always appreciated spending an afternoon at my favorite Mcmenimen's on the riverside, sipping iced tea and reading the classified s of the Willamette Week.
Funny thing: I haven't seen the number of ads diminish terribly (I could ask Richard meeker, and see if he's experiencing a rough decline).
Good rags will always have a following. Good rags that have both a print and online presence will do even better.
Any publication that uses, what David McInnis of PRWeb ( http://www.prweb.com ) calls "Fair Commerce" will thrive.
Have a free entry point. Allow folks to use your free resource. Then quietely and elegantly escalate those clients by giving them awesome additional benefits for a fraction of what it might cost in competing venues.
And keep giving, escalating the value proposition further at each level.
Now your free model has a revenue model and makes money.
Or join the luddites and throw wrenches in the machines of progress.
The internet is an amazing machine, and Craig, bless his heart, has figured out a model that works. He charges a few of his clients for job postings, and it works.
Enjoy! If you're a classified paper, get smart about your business model, and model what works. Or connect with leaders of the new World order and find a mentor to guide you through the process.
it's amazing, and I swear, change will do you good.
best of success,
Mark Alan Effinger
http://www.richcontent.com