Recently I wrote a column for Editor & Publisher Online espousing the idea of enhancing classifieds sections in printed newspapers by turning them into high-quality editorial sections integrated with classified ads. (“Print Classifieds for the Internet Age.”) It profiled a couple of new attempts (St. Petersburg Times and Baltimore Sun) to have their printed classifieds sections (general classifieds and a recruitment section, respectively) not only serve goal-oriented searchers, but also to bring in non-searchers who might happen on interesting ads while perusing editorial content. (A message of those experiments: Go beyond advertorial content and get serious about the content.)

In the monthly print edition of Editor & Publisher (which landed in my physical mail box today) Dale Pearson expressed this countervailing view:

“Steve, pu-leeze! The same old tired solution of sprinkling classifieds with quality editorial content ship has sailed and sunk … in main news, sports, business, every section! Just like classifieds across the country.

“Newspapers already know that the bees don’t always flock to the flowers. The sexiest design won’t sell one more line. How about: frequent flyer-ish discounts for classifieds, for subscribers — the longer, the bigger the discount? Why should I pay the same as a non-subscriber? No matter what they do, it all revolves around price, period. Perception is: daily classifieds are way too expensive, non-productive. That’s like GM trying to sell me quality — it’s not going to happen.

“Stop trying to re-think or reinvent classifieds. Start with re-doing your rates, to a point where the average reader can afford it over FREE Craigslist listings and many others. Now, you’re just rearranging the chairs on the Titanic. Why does a five-line ad in garage sale cost $20 and same space (five lines) in real estate $125? Ink cost more? Give me a break. It’s the price, stupid! I’ve got the guts to say, you don’t!”

My response: Dale, I don’t think we’re that far apart in our thinking. You, however, cite failed attempts at incorporating classifieds into various other sections of the print edition. That’s not what St. Pete or Baltimore are doing; they see the value in having stand-alone sections (easier to sell), but significantly improving them with quality content and better usability through redesigning the print ads themselves.

Neither St. Pete nor Baltimore are doing it at this point, but I would also recommend upselling contextual classified-ad blocks for other (editorial) sections, where ads are repeated in those positions and in the main classifieds section.

In terms of pricing and re-doing your rates, I’m with you. They need to compete with Craigslist, if there’s one in their market, and they need to be simplified; get rid of newspapers’ historically complex set of classified ad rates. In markets and categories where Craigslist, et al are a major factor, consider following the model that the Houston Chronicle recently adopted, offering base-level free ads online and selling various upsell options, covering print and online.

So you’re right, Dale. Newspapers need to start competing intelligently on rates, in cases where market conditions and competition dictate it.

In his (always must-read) blog, Newsosaur, media consultant and former newspaper executive Alan Mutter challenges the view that the poor economy is the crux of newspapers’ problems, as some industry executives are suggesting: “It’s not the stupid economy, newspapers.”

Read his entire post, but here are a few excerpts:

“Newspaper ad sales didn’t just go the wrong way in 2007. They have been declining steadily since 2001, when the economy suffered the twin shocks of 9/11 and the tech collapse. Even after the economy rebounded in 2003, newspaper sales consistently trailed the growth of the gross domestic product. … Newspaper sales actually began falling in the second quarter of 2006 — even though the expansion continued for more than a year — and the rate of decline has accelerated ever since (chart here).

“The chief problem is in the classified advertising business that historically generated 40% of newspaper sales and more than 40% of their profits. Between 2000 and 2007, classified sales fell $5.4 billion, or 27.7% from where they stood at yearend 2000. Recruitment revenues in the period fell $4.9 billion, or 56.3%, to the lowest level in 13 years. Automotive classifieds slid $1.8 billion, or 35%, to the lowest level in 22 years.

“Real estate sales were the only major category showing consistent gains after 2000, but they plunged sharply in 2007, dropping $1.2 billion, or 22.6%, in a single year. Reasonable men and women may differ as to whether, when and how the realty market will recover now that the federal government has decided to help (or not).

“Though today’s economy is perhaps the toughest in a generation, the industry’s problem began in the early days of the decade, when classified advertisers began forsaking high-priced print in favor of cheaper, highly targeted interactive media ranging from Craigs.ist to Dice to AutoTrader and Zillow.

“… While the jury may be out on the future of real estate advertising, there is no doubt that newspapers have lost their grip on at least two of the three key classified categories they used to own.”

What’s the answer? Don’t wait around for the economy to bounce back. Reinvent newspaper classifieds.

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.

I had an interesting e-mail exchange today with someone who follows ReinventingClassifieds.com. He objected to some of the ideas that were presented by Tim Windsor as being too radical, too crazy to be taken seriously. And he warned me that by presenting ideas that are too “out there,” newspaper classified advertising managers might decide not to take this entire website seriously.

The blog item posted here yesterday linked to Windsor’s entry on his own blog, titled “A big job: reinventing classifieds.” We grabbed a few highlights from Windsor’s post and published them, including this:

“Get out of print. … Convert to 100% digital classifieds now and use the paper to promote the heck out of the online product. This will cost in the short run, but so will doing nothing.”

My e-mail correspondent and I had different readings of Windsor’s advice. He took it literally as a call to stop printing classifieds in print and purely use print to promote a newspaper’s online classifieds services — and therefore it was a dangerous and crazy statement. I felt that in totality, the advice was more about redesigning and reinventing printed newspaper classifieds to better drive consumers to the online services, where future growth will be as printed newspaper classifieds continue to wind down, and using print for the type of ads that make the most sense for that medium. (I believe there’s plenty of life left with print classifieds, but they do need to be revamped in a way that has yet to be achieved. I’m working on a white paper on exactly that topic.)

ReinventingClassifieds.com is designed as a place to air ideas and debate them, in hopes of coming up with solutions that will turn the situation around for newspaper companies. We need solutions that halt the current cycle of sliding revenues and layoffs. Surely we can be open to all sorts of ideas, without worrying that ones that are too radical will close the minds of newspaper decision-makers.

Times are pretty desperate for the newspaper industry. I hope that rather than rejecting an ideas as “unworthy of a response,” CAMs will challenge them and add their own wisdom to this important conversation.

Tim Windsor

Tim Windsor (fortunately) has a little time on his hands after recently leaving his post as VP interactive for Tribune Co.’s Baltimore Sun. So he’s been increasing his blogging on Zero Percent Idle, and has written a great post with suggestions for renewing newspapers’ classifieds business, focusing specifically on the troubled recruitment component. (He was inspired by our contest here.)

Don’t miss “A big job: fixing classifieds.” Windsor has tossed some outstanding ideas into the mix. A few highlights:

“Get out of print. … Convert to 100% digital classifieds now and use the paper to promote the heck out of the online product. This will cost in the short run, but so will doing nothing.”

“Aggregate classified content from other sources, either through partnerships or straight-up content-scraping.”

“Move all of the professional (job) listings to online and focus the printed product on helping employers fill the manufacturing and service jobs in your market.”

He also endorses Lucas Grindley’s idea to offer free online and print ads, but charge for responses. (When a response comes in, notify the job poster or car seller; if they’d like to review the response, they have to pay a fee.)

Great thoughts, Tim! Thanks for sharing them.

Recently in an Editor & Publisher Online column, I described a couple innovative print classified initiatives from the Baltimore Sun and the St. Petersburg Times. The Sun, with its FindIt! recruitment stand-alone section introduced a few weeks ago, and the Times with its overall-classifieds BayLink section introduced last May, both took the approach of incorporating high-quality editorial content (not advertorial) in order to bring casual readers (not just ad searchers) into the sections.

At a time when newspaper classified revenues are spiraling downward, newspapers like the Sun and the Times are trying new ideas that some industry veterans might find radical. This feels less than radical to me, but I see it as a positive step in dealing with the print component of newspaper classifieds. Not all classifieds experts agree.

Janet DeGeorge

In fact, Janet DeGeorge, a veteran classifieds consultant who counts dozens of newspapers as clients for her strategy and training services, warns bluntly: “Keep editorial out of the classifieds.”

Her reasoning: “If you talk to sales reps, their customers do get good results if the classified section is designed the way it is supposed to be. Results are not the problem. It’s newspapers shooting themselves in the foot over and over by copying someone else’s disaster.”

DeGeorge’s big issue with adding editorial content to classifieds sections is that the advertising department typically has little control over editorial choices, which can result in placement of stories adjacent to ads where the content deals a punch in the gut to the advertiser.

For example, she says, “Rushed editors see a story on real estate and don’t consider the implication to the advertiser, and could in fact end up driving that advertiser away.

“I have seen the crime report inside the Real Estate pages (Hey readers, you don’t want to live here! Look at all this crime!). I have seen stories on fixing up your home in the New Homes section (i.e., those advertisers want you to dump your old home and buy a new one, not fix it up). At one paper, the editorial staff put a lead story in their Auto section about SUVs. The art showed a picture of an SUV all blacked out, with the letters RIP on it. All the dealers pulled out the next week.”

DeGeorge also is a big fan of stand-alone classifieds sections for the big categories (Recruitment, Real Estate, Autos), because often that’s what it takes to get an employer, Realtor, or car dealer to spend significant money. Blending these sections into the editorial sections of a print edition poses dangers. “At one paper I saw a Real Estate section stuck behind the Sunday Business section. Lead story: ‘Why now might not be a good time to buy a home,’” she says. Ouch.

Obviously, there’s a split opinion within the newspaper industry on this topic, and there’s no definitive advice for the weary newspaper classifieds strategist. (As I go about soliciting “reinvention” ideas for classifieds, making print classifieds sections more “exciting” and useful has been a theme I’m picking up.) But even if you reject DeGeorge’s no-editorial stance, her warnings should be taken seriously when incorporating editorial content into a classified section.

That should be simple enough. Train editors to be mindful of advertiser-editorial conflicts (especially if the editor is on the newsroom side rather than an Advertising employee), and select content that supports the advertiser while also serving the information needs of the reader. (Of course, that means further breaking down the old editorial-ad wall at newspapers, so at least the two sides are talking.)

I looked through several recent editions of the St. Petersburg Times’ BayLink section, which features a significant percentage of editorial content meant to draw in casual readers to the classifieds, and found little that works against the ads (unless you subscribe to DeGeorge’s point of view that editorial takes attention away from the ads). Things like a Careers column in with the employment ads, or home-related book reviews in with Real Estate ads, or a story about the best tires to improve gas mileage are generally harmless enough to advertisers while attracting the casual reader.

What do you think? Should newspaper print classifieds sections be spiced up with editorial to bring in the casual reader along with goal-specific consumers? Or should they be kept ad-only, but redesigned in more optimal ways to serve consumers and advertisers?

Tim Windsor, who recently departed his position as VP interactive for the Baltimore Sun, is taking up our challenge to offer a good idea or two for reinvigorating and reinventing newspaper companies’ classifieds operations.

On his blog today, Windsor makes the case for first defining the crisis. Check out his chart, crafted from Newspaper Association of America numbers, of just one segment of newspaper classifieds: recruitment. As Windsor notes, that line is headed toward zero.

Windsor promises a follow-up blog item with some ideas worthy of winning our $500 competition. I’m looking forward to reading that, Tim!

I hope you’ve noticed that ReinventingClassifieds.com is running a couple contests, soliciting ideas for saving newspaper classifieds from continuing to spiral downward: one for media pros and another for college students. We’re giving away some cash prizes for the best essay submissions.

Quite a few folks shared their ideas over the weekend after I put out an announcement. There are some thoughtful ideas in the mix, and we’ll share them here once we process and make sense of the submissions.

I want to quickly address one issue, though, which was brought up in a (frankly) cranky submission, which read:

“It cost five hundred to run one newspaper ad. F you they think I am going to solve your 64billion dollar question for five hundred dollars.”

While I might well have ignored that, I think it’s worth addressing, actually. As I’ve written here before, it’s unlikely that any one person or group has The Answer to resurrecting newspaper classifieds. And while we’re working on some ideas here on ReinventingClassifieds.com that will be presented in the coming months, we’re not so presumptuous as to think we can fix everything.

We’re big believers in the power of the smart crowd. So we devised these modest contests to try to tap your collective intelligence in attacking a formidable problem. The few hundred dollars we’re offering is meant to entice you to participate, of course. But I suspect that you’ll participate and share your ideas on saving newspaper classifieds foremost because you have some good ideas to add to the mix, and you want to see newspapers generate enough revenue that they can stop laying off so many journalists.

Hey there, innovative media/advertising thinkers. The newspaper industry needs your ideas, now more than ever! Help us figure out how to reinvent and save newspaper classifieds, and thus the industry. … We’ve got a competition going that will reward $500 to the person with the best idea. Check it out and fire up those brain cells for a worthy cause. >>> Continue Reading »

Are you a college student who is studying media and/or advertising? Are you innovative? Would you like to help newspapers reinvent classified advertising? … We’ve got a contest for you. Share your ideas or proposed solutions. The winning essay will win $500 cash. Check out the contest. The newspaper industry needs you! >>> Continue Reading »