From Houston, another step toward free ads

Last week, the Houston Chronicle’s website flipped the switch and became the latest newspaper to convert from its old system for general classified ads to using Kaango, the newspaper company-owned classifieds platform provider and ad network in use now by more than 200 newspapers and TV stations. (The Chron is sticking with Yahoo Hotjobs for recruitment, and its own system for Real Estate and Auto.)

Kaango, of course, has built a platform and national (U.S.) network meant to allow local publishers to fight back against Craigslist. And to fight back against Craig Newmark, they need to offer more sophisticated features and functionality than the increasingly archaic-looking Craigslist websites, which the Kaango platform offers in abundance. And, especially, newspapers need to offer free ads in the general classifieds categories.

In the case of the Chronicle, it already offered limited free online ads prior to this week, but only for merchandise valued at less than $500. To place an ad for something priced higher than that cost between $4.99 and $29.99.

But as of this week, those base fees went away and ads can be placed for free to Chron.com’s classifieds area. According to the Chronicle’s David Herrold, who is the implementation lead for the Kaango-Chron.com project, now you can even sell your $1 million Ferrari on the site without spending a cent.

The strategy is what’s now becoming typical in cities where Craigslist has a stronghold. Offer free ads in many categories, and make money from upsells (priority placement, extended time, extra photos, boldface, enhanced placement on sites within the Chron.com network of sites, and print publication) and display ads published in contextually relevant areas of the classifieds site.

Houston is just the latest big paper to take the plunge into free base-level ads covering a significant chunk of online classifieds categories, while holding off on that for major categories where it can still successfully charge.

Also intriguing about this rush to Kaango by newspapers is the way that publishers are increasingly willing to sacrifice their brand name to external networks. Note the Chron.com-Kaango logo above, where Kaango is clearly dominant — meant to emphasize the power of the network. (That’s a strategic — not forced — decision. Hearst Corp., owner of the Houston Chronicle, is one of the corporate owners of Denver-based Kaango along with MediaNews Group and Lee Enterprises; they own 80% of the company.) Of course, newspaper brands when used online simply don’t have the power or authority that they do in the old world of print.

Finally, something worth watching in Houston is how the Kaango-based ads are incorporated into Chron.com’s niche sites, which hasn’t been implemented yet. But take a look at PetsHouston, a niche-interest site populated with pet-related staff and community content and discussion. Pet ads from within the Chron-Kaango classifieds will soon appear here in ad blocks as an upsell. That’s yet another thing you can’t get when placing an ad on Craigslist.

Tags: houston chronicle, kaanga, platforms