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,
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
Andrew White, a spokesman for News International, believes classified
advertising will prove to be one of the first ways to make money from
‘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
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.
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.
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.