Study: Craigslist Costs Bay Area Newspapers $50M/Year

  |  December 27, 2004   |  Comments

Traditional newspapers' inability to thrive online costs them dearly, a new study finds.

Online classifieds site Craigslist costs the Bay Area's traditional newspapers, and their online divisions, between $50 and $65 million annually in revenues from employment ads alone, according to a report by Bob Cauthorn, former digital media VP at SFGate.com, the site for the San Francisco Chronicle.

Cauthorn put together the report, part of a package called "Competing with Craig," for research group Classified Intelligence. While Cauthorn didn't reveal the details of his methodology, he said he estimates the average recruitment ad in a metro daily would be worth $700. Craigslist charges $75.

"Craig is pulling out of this market alone somewhere north of $7 million to $8 million dollars, and probably closer to $10," said Cauthorn. "That's for recruitment alone."

In the report, Cauthorn says Bay Area newspaper executives can only blame themselves for losing their leadership position, "because they took no action and listened instead to the arguments inspired by fear, lack of vision, and short-sighted greed."

According to the study, Craigslist had 12,200 active job listings on its San Francisco site the week of November 21, 2004. In contrast, the San Francisco Chronicle had 1,500; the Oakland Tribune had 734; the San Jose Mercury News had an estimated 1,700; and the Contra Costa Times had around 1,000.

Cauthorn suggests that to compete with Craigslist, newspapers should begin offering free online classifieds, and promote the offer in their print publications. They should also offer easy, self-service tools to let users post ads online, and include anonymous Craigslist-style email aliases.

One advantage newspapers have, the study says, is businesses find it easier to work with them than with Craigslist. Cauthorn also points to Craigslist's customer support structure as an area of weakness.

"It's not a fatal flaw, and Craigslist will certainly work it out," Cauthorn writes. "But this problem, and Craigslist's weakness in dealing with institutional customers, provide enough of a gap for other smart publishers to flood the gap while Craigslist sorts itself out."

In another section of the package, 23-year-old Craigslist user Avi Zollman also offers suggestions for traditional newspapers' online divisions: provide RSS feeds of listings, post ads immediately, and let users have all the space they need, including for photos.

"Obviously they have to reach a younger audience, whether it's going to be in the newspaper or in RSS feeds sent to wireless devices with new forms of classified ads," said Peter Zollman, founding principal of Classified Intelligence and father of Craigslist user Avi. "The short answer is that it's going to have to be all of those if they want to stay in the business."

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Sept 5 to take advantage of Super Saver Rates!

ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

Resources

Jobs

    • Digital Marketing Analyst
      Digital Marketing Analyst (GovLoop) - Washington D.C.Are you passionate about audience acquisition? Love effective copy and amazingly effective...
    • Product Specialist
      Product Specialist (Agora Inc. ) - BaltimoreDescription: The Product Specialist is hyper-focused on the customer experience and ensures that our...
    • Partnerships Senior Coordinator
      Partnerships Senior Coordinator (Zappos.com, Inc.) - Las VegasZappos IP, Inc. is looking for a Partnerships Senior Coordinator! Why join us? Our...