INTERACTIVE: BEHIND THE HYPE/THE ONLINE CLASSIFIEDS MARKET; Why publishers are joining forces to put classifieds online

Online classified ad sales could prove lucrative but publishers are cautious. Gordon MacMillan reports

Online classified ad sales could prove lucrative but publishers are

cautious. Gordon MacMillan reports



More than seven million people are expected to be online by the end of

the decade which is why newspaper publishers are preparing to take their

lucrative classified advertising online.



Newspapers are keenly aware that the market is worth an estimated pounds

1.5 billion a year. It is now a case of, on the one hand, defending that

market from online competitors and on the other, opening up a second

revenue front by taking classified advertising into a new arena.



However, individual publishers are unlikely to go it alone. Instead,

they are grouping into consortia.



Traditionally competitive camps are currently wooing each other - but

exactly who will join forces is unclear.



Associated Newspapers already has its job-seeker service, PeopleBank,

which was launched 18 months ago. And United News and Media recently

launched a specialist car buyers service under the Exchange and Mart

banner (Campaign, 31 May).



But, by the end of the year, two rather more ambitious ‘second

generation’ competitors will have emerged: Classified Link UK, a joint

venture between News International and the Press Association, and

net.tv, a service from the Maurice Saatchi-backed new-media company,

Megalomedia.



There are other main players, including Pearson, the Telegraph group and

the Guardian Media Group - whose only foray into this market so far is

to offer free space on the Web version, G2, to recruitment advertisers

in its Thursday Online section.



Several regional companies are also known to be working on projects,

including NewsQuest, formerly Reed Regional Newspapers, Johnston Press

and Associated’s Northcliffe Newspapers.



Nothing has been finalised yet. Some or all of these players will be

part of the Link or net.tv service. Others may attempt to launch their

own services, but the received wisdom is that users will be looking for

a one-stop shop for all their classified needs.



So it is crucial for the consortia to sign up as many information

providers as possible. Ultimately, their aim is to create a ‘super site’

which will provide access to a large database of classified advertising

from as wide a range as possible of different sources in jobs, property,

travel and motoring.



The most obvious and likely sources will be regional newspapers. It has

been said that online classified could be the saving of the regional

press, which is suffering from a long-term circulation decline. It could

help strong regional brands, such as the Yorkshire Post or the

Manchester Evening News, not only to retain strong regional advertising

bases but to extend them. And they could charge advertisers a premium

for the larger audiences they would reach, nationally and

internationally.



Andrew White, a spokesman for News International, believes classified

advertising will prove to be one of the first ways to make money from

the Net.



‘We envisage a service where advertising sales remain with the papers,’

he says. ‘Our revenue will come from the subscription charge the

newspapers will pay to be part of the [online] service.’



Meanwhile, the papers themselves will be able to charge online

advertisers as much as they see fit.



As the competition hots up to get all-important partners on board, the

stakes are being raised. While Megalomedia has always said that it would

be offering equity in net.tv to those newspaper groups that joined, News

International and the Press Association originally stated that they

would not do so. Sources suggest that they may now be prepared to.



The two services will go head-to-head, but the question remains - is

there room for more than one super site?



One scenario is that the two could end up specialising in different

areas. It might be that net.tv will have a more comprehensive classified

car service and Link UK a better homes and jobs service.



This suggests that the super site idea may be flawed anyway. Michael

Chamberlain, the director of new-media activities at United, goes only

part of the way down the super site road.



‘From the users’ point of view,’ he admits, ‘they want something that

works, that is user-friendly and comprehensive. I don’t want them to

skip around looking at three or four different services if they are

looking to buy a car.’



But why would you use the same service to buy a car and find a job?

According to Chamberlain, it’s possible that United will sign up with

several groups, perhaps putting cars into one service and other sections

into another.



If sector specialisation proves to be the way forward, United will be

prepared with its specialist E&M car site. It offers access to a

database that contains 50,000 used cars, and, by the end of the year, it

will have added the weight of its regional newspaper arm, United

Provincial Newspapers, which has a stable of 75 titles.



Likewise, Associated’s PeopleBank is purely a job seeker’s service. It

has about 12,500 CVs online and charges employers pounds 10 for access

to a CV (partial details can be viewed for free), and a further pounds

50 if someone is interviewed.



There’s plenty of money for someone to make. And unless the existing

publishers get their act together - in whatever form - the danger is

that it will not be them making it.



The main players



News International and the Press Association



Joint venture known as Classified Link UK. Currently in talks with other

national and regional publishers but has not announced the names of any

participants yet. Will draw on the classified resources of the Times and

the Sunday Times.



Megalomedia net.tv



Confirmed that it is in talks with United News and Media, Pearson, the

Telegraph group and the specialist classified paper, Loot, but has not

announced any partners. Considering a revamp of its corporate identity.



United News and Media



Launched a classified car site under the Exchange and Mart banner and is

talking to both of the above. Owns United Provincial Newpsapers which

has 75 regional titles, with a weekly circulation of more than five

million, as well as the Daily Express and the Sunday Express.



Associated Newspapers



Put the job search service, PeopleBank, online. May go it alone, drawing

on the resources of the Daily Mail, the Mail on Sunday, the Evening

Standard and its regional group, Northcliffe Newspapers.



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