API to Summit: Newspapers Should Mount a Unified Challenge to Craigslist

By Rick Edmonds
The main event at the private executives' meeting a week ago in Chicago was discussion of paid online content, and the American Press Institute contributed a white paper strongly endorsing several versions of that strategy. API also offered a second recommendation and a second white paper, arguing that the industry should mobilize "to prevent further revenue erosion" of classifieds.

 

The target of the effort would be Craigslist, whose mostly free listings have contributed to the disastrous dive of what used to be the industry's most lucrative revenue source. The white paper suggests that with "a powerful unified national brand" on a common platform, newspapers could take back some of that business.

 

The paper concedes that Craigslist has become a prominent brand "with a huge mass of users" and that "it will be difficult to draw traffic away." But it suggests that Craigslist may be vulnerable because of its "cumbersome and very basic" user interfaces and its recent widely publicized "front-for-prostitution" reputation. The paper quotes one publisher describing Craigslist as "a flea market on the bad side of town." 

 

In addition, the paper argues, Craigslist and other freestanding services reach only limited segments of the market, offer only basic fraud screening and provide "unsatisfactory response rates, especially in recruitment (high in volume but low in relevance or quality)."

 

The report acknowledges that newspaper classifieds need lots of improvement to stay viable.  Specifically, the white paper faults newspapers for classifed products that "are generally nice-looking but overly complicated to use," rates "too complex for most users to understand" and ads that "are often full of obscure abbreviations, making important information hard to decode and search."

 

API argues that a strong competitor should be branded nationally, should scrape or syndicate classifieds from other local sites, should offer multi-market listings and should be built for future enhancements as display and search technology develops. Basic ads would be free and could be placed self-serve; enhancements and premium services would provide the revenues.

 

Elaine Clisham, director of targeted solutions at API, has worked on the project and told me in a phone interview that getting close to an ideal shared platform will have to take some coordination that is entirely missing now as individual papers follow their own strategies on divergent systems.

"That's the hurdle, but it's also the opportunity," she said.

 

The industry has a mixed record, at best, on such ventures. A decade ago, the New Century Network, aimed at unified pursuit of online advertising, collapsed before it got fully launched. More recently, however, three of the largest newspaper companies put together CareerBuilder -- a successful competitor to Monster in the jobs field. Hundreds of papers are hoping to boost online display sales now as the so-called Yahoo Partnership and its APT platform roll out.

 

It could help too, Clisham said, that there is no need to build from scratch. Multiple start-up vendors hope to win newspaper business with the next wave of online classified systems. The report mentions, among others, Kaango.com and ReminderNews.com.

 

The white paper itself, however, notes a long list of "issues and challenges." Some of them -- governance, funding, print-centric culture and ceding some control of rates and profits -- are high on the roster of what sunk the New Century Network.

 

This API project has a steering committee that includes independent (and independent-minded) publishers Walter E. Hussman, Jr. of the Arkansas Democrat-Gazette and Brian Tierney of Philadelphia Newspapers. The appeal of the concept to bigger chains is untested.

 

I'm dubious about unifying a large segment of the industry around an expensive plan with uncertain revenue prospects. On the other hand, if first quarter trends continue, newspaper classifieds will shrink this year to around $6 billion in print and another $1.5 billion online. A recovery could bring back some business next year, but the remaining base is a fraction of its peak of $19.6 billion in 2000.

 

Newspapers, despite the beating they have taken, are not without strengths in this competition.  Craisgslist is probably not a place many employers want to advertise a professional-level job. And there is nothing to prevent advertising a car -- or anything else -- both on Craigslist and in the newspaper. As the report observes, classifieds "may not be the juggernaut it once was, but it does need to become one of the revenue streams for the newspaper."

 

So stabilizing the category remains a worthwhile goal, and if the sweeping API proposal isn't the answer, I'm left wondering what is.