A New Age of Classifieds

By: Steve Outing Since writing last month's column, I've been on a bit of a personal buying and selling binge. I sold a car as well as several household items that have been gathering dust in my garage (including a desk and some light fixtures). I bought a new (used) car and a mountain bike. And I found a free trampoline frame (to replace one that went flying in a recent windstorm).

I did all of that without consulting or doing business with any of my local newspapers. With the exception of the car (purchased via eBay), all the purchases and the free transaction were done via the Denver-Boulder Craigslist Web site.

Were it not for Craigslist operating a very active community classifieds site in Denver, I likely would have spent money placing a classified ad to sell my car in my local newspaper. I probably would not have bothered placing a newspaper classified to sell the desk (the $35 my local paper charges would have taken too big a chunk of the $150 sale price); I'd still have all that stuff gathering dust and taking up space in my garage.

I'm just one of millions of people who have experienced a better local marketplace. And I say that my Craigslist experience is an improvement over my previous use of newspaper classifieds largely because of one word: Community. Craigslist has turned classifieds into a community experience. Using the site, it feels like I'm part of a community (even though Craigslist is an organization based in another city).

That's interesting, eh? A service based out of my state hooks me in better with my local community than does my local newspaper.

It's time for newspaper classifieds to utilize the power of community.

I'll say up front that I don't think that newspapers need to wholesale copy Craigslist. But they should learn the lessons it teaches us, copy some of its better features, and create new features and marketplace strategies that do a better job than Craigslist and other free community-classified sites. I love Craigslist (it's put a bunch of money in my pocket, so why wouldn't I?), but I think it's got plenty of weaknesses where competitors, like newspaper Web sites, can do better. (One newspaper online manager complained to me privately that Craiglist is "just plain ugly." Indeed, it leaves much to be desired aesthetically, but it's the functionality that counts -- and it works.)

So, how do we transform traditional newspaper classifieds from the current model into something that can compete in a world of Craigslists and eBays? How can we turn newspaper Web classifieds into exciting, vibrant communities? I'll explore that in this column. And I've enlisted the aid of a colleague, Peter M. Zollman, who publishes Classified Intelligence Report and is a guru when it comes to online classifieds. The ideas presented here are a mix of his and mine.

More than an ad

Let's start with an idea some no doubt will find radical: allowing people to participate in a classified ad.

Some news sites (sadly, a minority, still) allow readers to post comments about a story they read; the comments are appended to the original story. That's a powerful tool for reader interactivity. It allows people to point out or correct mistakes made by a reporter, add new information that the reporter wasn't aware of, or just express an opinion.

Apply that concept to classified advertising and you get an interesting result that helps the public better find what they're looking for at the right price, determine the credibility and reliability of sellers, and supports discourse between seller and buyer.

For example, imagine classified car ads that include a public-comment component. Someone who's done business with a seller, say a used-car dealer, would be able to add a comment about his experience with that dealer -- either good or bad. A listing advertising the services of a plumber or a bicycle-repair shop might include comments from previous customers. A potential buyer could ask the seller a question about an item, and the seller can respond in the ad. (Such an ad becomes open-ended, not just a one-time listing that's dead after initial publication, but rather a living ad that continues to inform over its life.)

On Craigslist, such consumer discussion about goods and services being sold already occurs, but in a less formal way. Because it's so easy (and free) to post on Craigslist, people sometimes post a new "ad" that actually is a comment on another person's ad. Here's an example, in which the poster wrote in response to another ad: "You paid $650 for a stock Trek 7300? Even if that included the rack and u-lock shown in the picture, you were taken."

From the consumer's perspective -- needing to know if the price on that Trek bicycle is reasonable -- that's not the optimal way to present this information. It'd be better if such supplemental information could be linked to from the ad itself.

The transition to free placement

Classifieds managers are by now probably thinking, "There's no way I want that kind of information to be attached to ads that people are paying me to run." And if it is a paid ad, that's reasonable. But because of the trend toward free community marketplaces, more and more ad categories will need to switch to free-placement. If most private-party bicycles are now sold on Craigslist and other free channels, newspaper classifieds likely will need to switch that category to free to compete. And for free categories, adding the community comment feature is appropriate.

With this community and buyer-seller interaction displayed for the entire marketplace to see, the classified section of a news website becomes much more useful. If I'm looking for someone to come build a fence at my house, I can see what other people who've had fences built think of those advertising fence-building services. That's so much better than static three-line classifieds in a newspaper website's classifieds "Services" category. Or if I'm looking to buy a used car and someone has posted a message noting that the model advertised was recalled by the manufacturer, that's valuable to me as a consumer. No conventional newspaper ad can do that.

This concept of community interaction also is an important step in competing with local business directory services like Yahoo! Local, which support consumer feedback of listed businesses. The business directories of the future will include aggregate consumer feedback of listed companies. For a long time, e-commerce sites like Amazon.com have included consumer reviews. It's time for newspaper classifieds to catch up and start offering those kinds of experiences.

Ads as entertainment

Have you ever looked through the classified section of a newspaper web site just for fun -- to see what people were selling or saying? Probably not. But lots of people regularly peruse Craigslist sites. Because Craigslist allows you to sell just about anything (but no firearms or weapons), it's entertaining to skim through the listings. I routinely glance at a few for-sale sections just to see if there are any good deals on items I don't know that I want.

Craigslist also is fun to watch for its oddball categories. Its "Missed Connections" feature publishes "ads" from people who are trying to connect with people they met or maybe spotted on the street, but didn't get their phone numbers. (Example: "Saw you in hotel - m4m - 37 (danville / san ramon) ... You were walking back to your room last night from exercise room ... you are a cute guy especially when sweaty ... contact me.")

So why is Craigslist offering such creative classified categories, and not most newspaper sites? Perhaps a task for newspaper classifieds managers should be to brainstorm new free categories to spice up their sections online -- and thus bring greater readership to the entire classifieds section. If a newspaper Web site's classifieds area is a mix of paid- and free-placement categories, then have some fun with the free categories. Think about turning the classifieds into not just a marketplace but a fun community.

OK, so some of the more "entertaining" Craigslist categories are too sexy for most newspapers. But as Zollman points out, when newspaper companies set up online classifieds services separate from the core brand, meant to appeal to a younger demographic, there's good reason to push the limits. Keeping a distance from the legacy newspaper brand, classifieds can be "edgy" enough to appeal to younger people and gain their loyalty.

Work at forming communities around categories

Take a look at the listings for garage sales in most newspaper-site classified areas. (Here's a typical example, from ChicagoTribune.com.) There's not much there but text listings and maybe a special feature like a map to the sale locations.

Garage sales are but one of many categories that should be turned into a community experience. A lot of people take garage sale-ing seriously, and there's value in offering them more than just simple listings of sales. For instance, start a forum area -- categorized by neighborhood -- where people can discuss garage sales with each other. (Topics: This is a good/bad sale; I got a great deal at this sale; that sale offers free cookies ... you get the idea.) Garage-sale ads can be "living," with the advertiser given the ability to update it through the day of the sale. ("I'm lowering the price of my couch sectional to $150"; "I have these items left as of 3 o'clock:....")

An auto category for particular cars could have forums to encourage communication between, say, owners and fans of Volvo SUVs. Build up a bunch of classified communities like that and you have something to sell to advertisers seeking to reach niches (like Volvo repair shops and auto-stereo shops).

Zollman also recommends adding editorial content to categories. That Volvo car category can have news about Volvo recalls, car reviews, etc. He points out that most newspapers will have previous coverage they can tap to enhance the editorial offerings surrounding the ads.

I would add that the concept of "citizen journalism" can be applied to classifieds. Allow local drivers to write reviews of their cars, and post them as part of appropriate auto classified categories, for example. Let local bicyclists write about their races and include that in the classifieds bicycling area, or get a local bicycle shop to publish a blog about bike repair. This is a way to turn a boring listing of items for sale into a content area that attracts a loyal following of enthusiasts for those items.

About the money thing

Where newspaper classified managers really need to get creative is in finding new ways to make money from the classifieds-as-community concept. It's seems fairly obvious that the free-online-classifieds trend is putting pressure on newspapers in some categories, especially merchandise (but also cars, real estate, and jobs). My reading of the situation is that already some newspaper classified categories in major U.S. cities where Craigslist is strong are threatened and will be forced to switch to free ad placement soon.

Zollman has some good advice on dealing with that. Let's say, he suggests, that the sale of pool tables has moved mostly to the free ads on Craigslist, et al., and the local newspaper is no longer getting pool-table ads because no one wants to pay for them any more. The way to deal with that is to switch the newspaper category for pool tables for sale to free placement of ads by the sellers, then look for other ways to make money from people buying and selling pool tables. One way would be to find companies that move heavy items like pool tables. Get them to advertise and maybe offer a coupon to buyers of pool tables -- $10 off on delivery of the pool table they just bought. (Get them to advertise in the pianos-for-sale category, too!)

Zollman reminds classifieds managers to look for opportunities in that which is lost. If autos-for-sale categories are failing because people aren't spending money to place ads to sell their used cars, and the category changes to free placement for private-party sellers, relish the thought that anyone who is selling an old car is probably in the market for a new one. So capitalize on that valuable audience of potential car buyers and sell display or other forms of advertising to new-car dealers who want to reach them.

Newspapers offering free classifieds also can insert themselves into the transaction, facilitating the safe exchange of money and taking a commission. (Online classifieds vendors like AdPay and CityXpress offer solutions for this.) The point is to get creative, because the old way -- collecting fees for ad placements -- is going away for some classified categories.

Upsells are another technique for making money from free-placement classified categories. Offer free basic ad placement including a single photo, but charge a modest fee for additional photos. It makes sense also to offer upsells to the print product from free-placement Web classifieds; that's a technique used by Backpage.com, the Web classifieds for New Times Inc.'s alternative-weekly newspapers.

Zollman also urges newspapers to include RSS feeds of all classified categories (as well as personalized keyword searches); you can look to Craigslist for examples of that. Such techniques keep people coming back to your online classifieds, and that means more money overall.

There's still plenty of time

I've highlighted Craigslist as a significant threat to U.S. newspapers' classifieds. It truly is a bane to newspapers in some major U.S. cities, where Craigslist sites have hit critical mass and are widely used by consumers. But in many other cities, Craigslist is scarcely used; the threat there is not immediate, and in some cities Craigslist sites may never reach widespread local usage.

But I urge newspapers everywhere to plan for a future where free classifieds dominate their local markets in many categories. By deploying a strategy that transforms newspaper classifieds into vibrant communities instead of static lists of text ads, newspapers will be ready for the challenge that approaches.

Newspapers can do a better job at community than Craigslist can. The community classifieds model is not without its challenges, but there's much potential for transforming the revenue streams from a dying old model to a new one.


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