Craigslist Could Lose $15 Million After Removing Sex Ads

  |  September 15, 2010   |  Comments

Heavy financial toll as Craigslist drops adult-services ads. Who stands to benefit?

Now that Craigslist has removed its adult-services ads category, the company could lose as much as $15 million this year, according to a new study. A report from classified ad research firm AIM Group suggests the site was poised to grab up to $45 million from ads for sex services like prostitution or escort services in 2010, before the firm scrapped the longtime ad category.

In August, AIM found that Craigslist led ad sites in revenue generation from prostitution and other sex service ads. Indeed, its projected revenue for 2010 rose from $36.3 million when measured in April, to $44.6 million when tracked again by AIM in August, representing growth of around 22 percent.

AIM estimates Craigslist brought in $30 million in the 34 weeks the adult-services category was available this year. Thus, the research firm estimates Craigslist will lose between $12 million and $15 million by year's end since killing off the category earlier this month.

"We tried to identify the players with the highest revenue," notes the study. "Immediately after Craigslist eliminated its adult-services ads, first by placing a 'censored' bar where the category had been listed and later by dropping it entirely, ads by and for commercial sex started moving elsewhere."

According to AIM's "Sex ads: Where the money is" report, published September 14, Craigslist and Village Voice-owned BackPage.com account for the bulk of revenue generated by ads for sex services - 88 percent. BackPage.com, which offers ad categories including "escorts" and "adult jobs," will collect at least $17.5 million from sex ads this year, the report states. The BackPage total includes $4 million in revenue from CreativeLoafing.com, which has sites serving Atlanta, Charlotte, Chicago, Sarasota, Tampa Bay, and Washington, D.C.

In its "Dirty Dozen" list of twelve sites featuring classifieds-style sex services ads, AIM showed a significant disparity between sex ad revenue on Craigslist and BackPage compared to the remainder of the list. The third leader in sex ad revenue, Eros.com, is expected to bring in $5.4 million in 2010, while the fourth, CityVibe.com, will generate $2.6 million, according to AIM's calculations. Another steep drop occurs between number four and number five, MyRedBook.com, which AIM says will collect $205,000 in sex ad revenue this year.

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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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