Why don’t newspapers make Craigslist obsolete?

TechCrunch had a recent post about eBay’s free classified site, Kajiji, angling to take down Craigslist (even though eBay owns 25 percent of Craigslist). Kajiji thinks that Craigslist’s dated look and interface don’t cut it anymore, and that a classifieds site with better options and security — one that can afford to expand and improve by selling ads — can draw people away. Seems plausible to me; I use Craigslist, but would definitely jump ship if something prettier and more useful came along.

But here’s something I often wonder: If Craigslist is vulnerable to a challenge, why are newspapers letting eBay get in on the action? Why don’t newspapers actually try to challenge Craigslist instead of just whining about how the site killed their revenue?

What if a newspaper offered a robust, intuitive, user-friendly free online classifieds site supported by advertising? I’m talking about targeted ads relevant to the searches, products, or services at hand.

Now, for example, the classified page for furniture at the St. Petersburg Times Web site has two ads on the page: a banner ad at the top for Verizon Wireless and a side ad for Weight Watchers Online. (Disclosure: I work at the Times.) The merchandise classified page at the Dallas Morning News has a banner ad for real estate and side ads for a Hannah Montana ticket giveway, a coupon book, and DMN’s news site. The merchandise classified page for the Rocky Mountain News/Denver Post has a banner ad for Capitol One credit cards and a side ad for U.S. Army recruitment. (On subsequent visits, these ads have changed; but they’re all still banner ads that appear to be site-wide and not specific to the classifieds page.)

These and other papers seem to have learned nothing from Google. Web ads work best when they’re unobtrusive and, most important, relevant to what the user is already searching for. If I’m looking to buy a TV, I’m not going to click on an Army or Weight Watchers ad — but I might click on an ad for a local electronics store that’s having a sale. Google’s ads are also perfect for smaller businesses that can’t afford giant banners or print advertising — an area that newspapers are notorious for overlooking online. Creating a robust free classified site would be a great way to experiment with targeted, relatively inexpensive online local advertising.

I’d love to hear from people who have a better understanding of the business side of things, the economics of online advertising, how much papers still actually make on classifieds, etc. But it seems to me that making all online classifieds free — and probably print classifieds too — and creating a targeted-ad-supported, user-friendly classified site could begin to drive people away from Craigslist and back to newspapers.

4 responses to “Why don’t newspapers make Craigslist obsolete?

  1. Classifieds still represent a significant chunk of most newspapers’ revenue, particularly recruitment ads ((NYT and USA Today are in a different boat).

    CPC ads would have to have the national scale of a craigslist or a kajiji to make economic sense, and the newspaper industry is too federated to produce such a beast. Nobody wants to pull the plug on classifieds’ life-support just yet – it’s a key pillar holding back rapid and substantial change in the industry. That rapid, substantial change might not be pretty.

    BTW, great series on the newsroom stuff earlier.

  2. Thanks!

    That makes sense. Though I wonder if there isn’t then enough time to devise a system that could compete on a larger scale.

    Even if, say McClatchy or Gannett’s far-flung networks of papers aren’t big enough to make it worthwhile individually, seems like chains might think about teaming up to devise a next-gen classifieds system or something. Sharing revenue would be better than losing it entirely.

    At the very least, I don’t know why individual papers or chains haven’t tried to better target ads on classifieds pages and differentiate those ads from the ones on the rest of the Web site.

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