Online Classifieds Present Data Mining Opportunities

By: Steve Outing

With many newspapers putting their classified ads online, the cyber medium presents some new opportunities for publishers. Loren Needles, an expert in statistical analysis and managing director of Analytica Inc. (Alexandria, Virginia), thinks that newspapers now have an outstanding new tool to learn more about their marketplace by mining data in their online classifieds.

"There is literally a new and heretofore unavailable opportunity created by the assembly of ads electronically," Needles says. By using data mining techniques on a newspaper's classifieds, a newspaper can assemble some valuable data on its marketplace, which can be utilized by reporters and editors, as well as businesses and other organizations that will pay for such information.

As an example of what he's talking about, Needles ran a spreadsheet analysis of the ads in the CareerPath national newspaper employment ads Web service. Running an all-newspaper search for the terms "Mac" and "PC," he consistently got back results of 22% Mac and 78% PC. (His test was run over multiple days.) This is interesting data, in that it seems to indicate that jobs requiring skills on a particular computer platform don't match up with commercial market share, which for the Mac is below 10%. Needles also found in a search for Quark versus PageMaker (the two top desktop publishing applications) a 60/40 split. "So, graphic artists should make a point of knowing both (applications) when they start looking for a job," Needles says.

In a local market where the newspaper has its ads online, it can now be a simple matter for reporters to get a clearer picture of trends in the employment or housing sectors. An analysis of a paper's auto classifieds can paint a picture of how long people keep their cars before trading them in, or track the popularity of particular models. A look at the data in apartment classifieds can track price trends. The opportunities for original data to support reporting are great.

Businesses for years have used newspaper classifieds ads for a variety of purposes, from lead generation for salespeople to trend analysis. (The U.S.-based Conference Board for years has kept track of employment trends by tracking the physical amount of newspaper employment classifieds.) Newspaper online classifieds present opportunities for selling trend data to other businesses and organizations. And when newspaper classifieds are included in a national Web database like CareerPath, the data is even more valuable in documenting geographic differences in key trends.

Colorado-based ClassiFACTS, which operated an 800-number 50-newspaper employment ads service (and a recently launched Internet classifieds service) before going out of business several weeks ago, operated a commercial division that sold businesses access to its newspaper classifieds database for data mining. Before the company died, that division had grown to an annual sales rate of over $1 million. Its clients included employment recruiters, the insurance industry (to track the market prices of used cars in particular markets, for example), and even classic car collectors.

Some newspapers have long recognized this opportunity for themselves, but proprietary classifieds systems typically made it difficult to mine the valuable data encased in the classifieds database. By newspapers bringing their classifieds onto World Wide Web services, new business opportunities are opening up in this area.

Contact: Loren Needles, lrn@analytica.com

A look at a classifieds cyber-competitor

For those publishers who don't take seriously the online threat to their classifieds business, Robin Lind, CEO of WebPointers, offers a "heads-up." He writes:

"Look at iMALL (based in Provo, Utah) which is now being publicly traded on the Nasdaq OTC market. I just returned from a 'seminar' they held in Richmond, Virginia, and I'd have to say they seem to be in the formation stages of an AmWay style scheme theoretically based on selling classifieds. Their Web page today proclaims 9,000 classifieds online. At $25 each for 3 months, that gives them a present yield of $275,000.

"They sell their 'workshop' for 'iMALL Entrepreneurs' at $3,000 for a full day to learn the secrets: 'This is shooting fish in a barrel; you can see the barrel; you can see the fish; we give you the gun!' The entrepreneurs learn how to sell the classifieds ($75 for 3 months; $25 to iMALL; $50 to the salesman); then they learn how to sell Web pages at $3,000 a pop for five linked pages ($500 going to iMALL, $2,500 to the salesman) plus a $95 a month maintenance fee.

"Perhaps half the people at the 'seminar' had been on the 'Net. Many didn't have computers. There was no question period but a very slick, well-rehearsed and persuasive hour and a half program.

"I can bet you a dollar to a donut hole that there will be 40 people selling Internet classifieds and Web pages in central Virginia before Christmas. Their 'colleagues' will be selling all over the country and your neighborhood plumber in Boulder will very likely have a Web site on iMALL before 1998.

"How persuasive was it? Well, I didn't throw my $500 deposit into the plate to reserve my free home page and gain Platinum Level status from the git-go. But my bad knee? Suddenly the pain was gone. I could walk again. I wanted to come forward and witness, to touch the hem of his garment, to shout Hallelujah!, to let people know I'd been saved. ... Perhaps I'll take out a classified, under Personals: Anouncements: Healed!"

Contact: Robin Lind catbird@i2020.net

European publishing market: 15% electronic within 6 years.

Up to 15% of the European publishing market will be electronic within six years, according to a report prepared for the European Commission. The report, called "Strategic Development for the European Publishing Industry" and prepared by Andersen Consulting (Germany), predicts than 1 million new media jobs will be created across the 15 European Union nations within the next decade. The report says that regional newspaper publishers, in particular, "face excellent marketing opportunities in regional online markets if they are the first to enter."

For the majority of publishers, "electronic publishing is necessary to sustain long-term survival and success," the report states. Publishers could face ruin if they don't get fully involved now in the electronic revolution, Andersen says.

Information on the study can be found on the Web at http://www2.echo.lu/elpub2/en/home.html

Movin' On

After a one-year stint as an executive at InfiNet, Gordon Borrell this week is returning to Landmark Communications (Norfolk, Virginia) as vice president of new media. Landmark is part-owner of Internet publishing company and Internet service provider InfiNet, along with Knight-Ridder Inc. and the Gannett Co. While at InfiNet, Borrell worked on developing international business for the company. He says, "I'd found a lot of business with Latin American and Brazilian newspapers wanting to copy the InfiNet model. They actually have an excellent record of letting the U.S. newspaper industry be 'first in' in new technology, then they come along and capitalize on the faults and one-up us."

Leah Gentry has joined Excite as assistant managing editor. Gentry recently left the Chicago Tribune as its Internet editor to return to Southern California. She formerly was online editor for the Orange County Register.

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company.