March 17, 2005

According to a new report, in the San Francisco Bay area, many newspapers have been losing advertising business to the popular posting palace Craigslist, to the rate of $50m to $65m in job ad losses alone, and the trend could even intensify.

Consulting firm Classified Intelligence has issued a 57 page report that tracks how the four major Silicon Valley newspapers were caught off guard by Craigslist and have largely lost the classified advertising wars. Craigslist - now partly owned by eBay - beat out the papers by being more customer friendly and by being quicker to act than its rivals. Other papers around the US should take notice of Craigslist' Bay area success, as the site continues its march into new cities.

"The Bay area is the first major metro market where, with great certainty, the newspaper industry no longer controls the classified advertising marketplace," Classified Intelligence said in its report.

Craigslist boasted 12,200 active job listings in San Francisco during the week of Nov. 21 with nearly all of these being paid and unique listings, the report said.

By contrast, the San Francisco Chronicle had only 1,500 postings and the Oakland Tribune had 734 posting. Due to deals with CareerBuilder, the Mercury News and Contra Costa Times were given listing estimates by Classified Intelligence of 1,700 and 1,000, respectively.

"In other words, the region’s largest newspapers offer roughly 4,900 jobs, their cheerful online competitor: 12,200," the consulting firm said. "The net financial impact of the migration of so many jobs to Craigslist is something on the order of $50 million to $65 million lost to print newspapers each year."

Craigslist also enjoys tremendous popularity in the Bay area with more than half a million unique visitors and 150m page views per month. Its strong brand name can lead to some disconcerting moments for the local papers.

"For example, when the Chronicle’s human resources department needs to fill jobs for the newspaper, it frequently advertises on Craigslist because its own recruitment ads deliver unsatisfactory results," Classified Intelligence said.

"Knight Ridder Digital, down the road in San Jose, also recruits through Craig’s. You advertise where you’ll get results. Craig delivers."

Bay area residents seem to respond to the touchy, feely nature of Craigslist, seeing it as a communal shopping ground for jobs, products and even people.

Even though the company behind Craigslist is just as for-profit as the backers of local papers, it maintains a less greedy facade than rivals, according to the research firm.

To combat Craigslist's success, the papers will have to come up with some innovative schemes, including combinations of free print and online ads, said Classified Intelligence.

The newspapers will also have to work to be more friendly to their customers. They should bend over backwards to help customers instead of working to pinch a few extra pennies out of posters, the study said.

Source: The Register

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