Online business models – Texas Center For Community Journalism

Todd from the Wise County Messenger asks: Craigslist seems to be getting perilously close to our area, not to mention a local blogger has set up his own free classifieds system. What can we do to try and combat this?

One thing to understand about the new classifieds market online — and the Internet in general — is that there will inevitably be revenue losses brought on by increased efficiency.

In fact, as many of you likely know, classified advertising is down across the industry, and many have pointed to it as one of the chief catalysts in the erosion of the newspaper business model. Online alternatives such as eBay and free online alternatives such as Craiglist have replaced newspaper classifieds — especially in large markets.

The revenues from those companies don’t even come close to adding up to what newspapers have lost in revenue. That’s because they’re doing what newspapers have been doing with classifieds for years, but they’re doing it far more efficiently – a luxury afforded by the Internet.

And while Craigslist and others have yet to hit small markets, they’re growing quickly. They expanded their list of cities by 25 percent last month.

So why fear Craigslist and the like? Many reasons, and it’s not just their price:

Because they’re free they can amass content faster, adding to their utility for buyers.
There’s no skimming the page; a simple search capability greatly increases the usability.
Their self-service interface allows users to place their own ads on their own time.

So how can you compete with Craigslist? In many ways, traditional printed newspaper classifieds just can’t compete. That’s why newspapers across the country are struggling to regain lost classified revenue from free classified services.

Be proactive

That’s the key, though: regain. The good news for community newspapers is that, for many, Craiglist and others have yet to take revenue from them. So far, they’re still the place to go.

Because of that, it’s a great time to strike before someone else does, but you’ll have to go into this knowing that you may never get back what you were once getting from classified sales.

There are legitimate reasons for that. It doesn’t cost as much to publish online classifieds and anyone can do it. There are many more options out there than your newspaper classifieds or even Craigslist. Just search for free classifieds on Google with your community name, and you’re likely to find plenty of options.

Facebook also has a feature, called Marketplace, that users can turn to. And they can just as easily let their friends or followers know on their social media accounts that they’re trying to unload something.

Capitalize on your strengths

What you can deliver that nobody else can is trust and eyeballs.

While Craigslist and the offer free sites have been around for years, they haven’t been in Decatur, Texas, for years. Your newspaper’s brand is one of your biggest assets in this case.

Also, if you have a Web product you can immediately leverage that audience, bringing potential online sellers a loyal, established audience that a new person in the market can’t provide.

To compete with the free part of online classifieds, though, there aren’t many solutions besides going free as well. But that doesn’t mean everything for free all the time.

You have value-added options you can provide — specific ally publication in your print product. You can also provide premium “upsells”, such as photos, videos or premium placement within your system.

Monetize the platform

By hosting the classifieds on your site, you can also capitalize on the additional traffic. Using your established advertising base, you can sell online display ads around your classified listings.

All of these things might never replace what you’ve lost in print classifieds, but the reality is they’re just not worth what they were to consumers several years ago.

That’s a realization that has been brought on by the multiple free alternatives out there, but it has been a reality since our communication methods adapted to the Internet age.