Peter M. Zollman
402 Spring Valley Road
Altamonte Springs, Florida 32714
Tel (407) 788-2780
Fax (407) 788-7061
pzollman@classifiedintelligence.com
Print and interactive
classified ads
and
Classified advertising
revenue case studies
Prepared for: Associação Nacional de Jornais
Nucleo de Mercado
Presented by: Peter M. Zollman
Presented: March 17, Sao Paulo
Executive Summary – ‘How our world is changing’
Interactive features are changing the classified advertising business forever.
If you don’t believe it, just look at EBay.
Who would have believed that an online auction site would have more than 4,000,000 items for sale?
Who would have believed an entire cottage industry would grow up among people who are trying to “buy
low and sell high” through EBay? Who would have believed there would be an international market for
Beanie Babies? Who would have believed that an online auction site would become a primary retail
distribution channel for companies like IBM, Sears, and others?
Simply put, classified advertisements work better online!
As newspaper publishers, we may not like that. We may not want people to search for a house at
Realtor.com, look for a job at Monster.com or find a car on AutoTrader.com. But it’s not our choice to make.
Consumers make those decisions.
So how can we win against those interactive-media competitors?
Easy! We have to be better than they are.
Print and online are an unbeatable combination. A large number of consumers – users, readers
and advertisers – will never have (or use) Internet access. And others read our print classifieds for
entertainment, or general information, or while they’re on the bus or Metro. Still others will just prefer print.
But others will prefer to use classifieds online. We have to serve all of those readers / users.
What interactive features will become essential in classifieds in a few years?
Automotive: Information on used-car values and trade-in prices; dealer cost figures on new cars;
payment calculators; loan applications; insurance price comparisons; all-around interior and exterior views
of used and new cars; online booking of service appointments; dealer locator maps, comparative car reviews
from multiple sources; “lemon checks” for used cars …
Employment: Rich matching of prospective employees with opportunities based on fuzzy logic,
rather than just “key words;” comprehensive employer profiles; personal portfolios of work
accomplishments by individuals, accessible online by prospective employers; individual talent “auctions”
allowing freelancers to work for the highest bidder, …
Real estate: “Immersive photos;” 360-degree “virtual tours;” full-motion online videos on demand;
mortgage calculators; neighborhood demographic information and background; searchable databases of
homes and apartments; online mortgage applications and approvals; directories of remodeling contractors
with details of their projects and capabilities, …
Merchandise: Auctions with photographs; liquidation channels for failing retailers or clearance
products; full-motion video views of objects for sale; comparison shopping “’bots”…
What do all of those functions have in common?
 They are available now! Every one of those enhancements is offered on at least one eclassified site – many of them on more than one site
 They don’t work in print.
For your newspaper to continue serving auto, employment and real estate advertisers, you’re
going to have to offer what they need to make the sale. Today, many of these features are still in the
“novelty” or “early adopter” phase. But where will they be in three years? And where will you be if you
don’t offer them – and consumers and advertisers demand them?
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.
SELECTED URLs
Internet-media company competitors
EBay – The “killer app” in merchandise / auction sales. Operates in Brazil and 20 other countries.
Becoming a business-to-consumer site as well as a consumer-to-consumer site. Also growing as a retail
distribution channel and a business-to-business channel. Profitable
Yahoo: Highly profitable personal ads; owner of HotJobs.com and other classified ad services.
Microsoft / MSN: Has an autos channel (formerly Carpoint.com); house-and-home channel
(formerly HomeAdvisor.com); offers employment advertising through Monster.com.
Trader Classified Media operates in 20 countries around the world with both print and online
classified sites – including Brazil, where it publishes the free ad brand Balcão, a biweekly offering general
merchandise and photo ads for auto and real estate.
Automotive
AutoTrader.com: Owned by Cox Enterprises, Landmark Communications, and others. This site
offers 2.2 million used and new cars online in the U.S., with a business model that is easily exported.
Autobytel.com, Autoweb.com, CarsDirect.com, others
Cars.com: owned by Classified Ventures, consortium of six media companies
Employment
Monster.com – Owned by TMP Worldwide, major advertising agency placing employment
advertising in newspapers. Has acquired Jobline International AB (European / Asian site). Also owns
Flipdog.com, others. Profitable overall, despite the economic downturn.
CareerBuilder.com – owned by Tribune Co. (Chicago Tribune), Knight Ridder, Gannett Co. More
than 180 media partners, including TV stations. Executives say they have no international ambitions, but
there is no reason to believe that could not change.
HotJobs – owned by Yahoo. President Dan Finnigan, in a March 2003 interview with Classified
Intelligence, noted that Yahoo is very strong in a number of countries including Brazil and said its “next
wave of growth” would probably be international.
Wall Street Journal: careers.wsj.com
CareerBuilder.com: More than 20 media partners, including NBC, MSN, Bloomberg
New York Times: Offering video resumes from SearchLinc
Real estate
Realtor.com: Owned by Homestore.com, major conglomerate of real estate sites. The category killer
– operated in conjunction with the National Association of Realtors.
Personals
This highly profitable category has dozens of players, both in the U.S. and internationally.
Match.com is the leader in this category, with a Brazilian site at http://br.match.com. This
company is the market leader, but other companies in the field include Cupid.com, MatchMaker.com,
Yahoo.com, UDate.com / Kiss.com (soon to be owned by USA Interactive, the same company that owns
Match.com) and many others.
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.
Classified Intelligence Case Studies
Newspapers are adding classified advertising revenue – one product and one project
at a time – through the use of interactive and print media.
In some cases this means using the Web to send out e-mail renewal inquiries. In others, it means
selling your print and online ads through the Web, or incorporating “print display ads” on your Web site, or
developing new products that marry print and online programs.
In the future, no doubt, it will include adding audio and video – such as full-motion video clips of
high-end homes for sale – to your classified advertising services.
Classified Intelligence has just started publishing a free monthly newsletter, Classified Intelligence
Case Studies, providing information on specific, actionable projects that you can launch at your newspaper
to increase revenue. Take one of these each month, launch it, and we’ll guarantee – in writing – that your
business next year will be bigger and stronger. Not every one will be for you. Some will require adaptation.
Or they’ll be more suited to a large-market paper and you’re a small-market paper or vice-versa.
To sign up for Classified Intelligence Case Studies, go to:
http://www.classifiedintelligence.com/casestudies and click on the appropriate links.
Because it’s a free service, please encourage your friends, colleagues and business partners to sign
up, as well.
Today, I presented three case studies. One is available at that Web site; one was just distributed, and
one will be published in March. (If you sign up now, you should receive it.)
Here’s a brief synopsis of the case studies, and my “best practice” example:
 E-mail renewals: E.W. Scripps Treasure Coast Newspapers launched an e-mail renewal project
for private-party classifieds. Using e-mail addresses collected when the ad was sold, and
permission from the advertiser to send them e-mail, the papers sent out personalized e-mails that
included the text of the ad, a photo of the sales rep, and a “click here” link for renewal. The
project generated more than twice the revenue in renewals than it cost – and most of those costs
were start-up costs or incorporated in two other simultaneous e-mail projects. The papers used
vendor Mass2One.com.
 Display ads online: Lots of newspapers are now posting display ads online. As a long-term
strategic, we’re not convinced this is the correct approach – but it’s probably a very effective
program to offer for the next few years. Advertisers love it, sales reps understand it and clickthrough rates seem to be substantial at some properties that offer this. We looked at the Scranton
Times, scrantontimes.com, which is using vendor PowerOne Media. (Numerous other vendors
offer similar services.) The service generated a profit margin exceeding 60 percent.
 “EGN Recruitment Ads:” This Australian program is not easily adapted to the United States, but
it is adaptable. It illustrates the value of limited inventory, dayparting or “weekparting,”
working closely with your advertisers, and more. The Sydney Morning Herald and The Age (of
Melbourne) offer print recruitment ads in their primary news sections on Sunday (“early general
news” or “EGN” ads). They have adapted the program to highlight recruitment ads on their main
news, world news and breaking news sections on Monday through a highly targeted and exclusive
program. It’s generating more than $1 million (Australian) annually. A similar program in the
States, TopJobs, generates hundreds of thousands of dollars for its various newspaper users.
 Selling print classifieds online: Our free report on this service is available at:
http://classifiedintelligence.com/main.asp?SectionID=15&SubsectionID=17
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.
The Web is the newest money-saving, business process tool
For the past five or six years, newspapers everywhere have considered the Internet both a threat and
an opportunity – a threat to advertising and market share, and an opportunity to reach new audiences, new
advertisers and generate new revenue.
But the Internet is much more. It’s a very valuable business-process tool. Newspapers and newspaper
companies that have considered interactive media only in terms of an online edition are finding as well that it
can be an excellent way to expand distribution, improve processes for our audiences and our advertisers, and
cut costs.
Some examples:
Sale of ads online: Newspapers that sell print classifieds online with a robust e-commerce, adbuilding engine have shown that per-ad revenue increases, costs decrease and customer service improves.
This is an absolute “no-brainer,” yet many newspapers still offer the old, “e-mail us your ad and we’ll call
you back later” approach.
Construction of ads online: Several companies now offer software to help newspaper display
advertisers design their own ads, complete with artwork, borders, shading and other graphics. This is totally
counter-intuitive – I never would have believed it worked if I hadn’t researched it myself – but advertisers
love it, revenue increases, and it’s another tool for bringing in new advertisers and strengthening, not
damaging, your relationship with current advertisers.
Advertiser compliance: At least one company now offers auto dealers and newspapers an online
tool for creating and reviewing their ads to make sure they comply with the complicated state and federal
regulations governing auto advertising. Given the spate of lawsuits against advertisers who break the rules,
this is an interesting new tool that could improve the quality of your ads and help your advertisers stay out of
trouble.
Pictures online: Few newspaper classified liner ads carry photos because of the cost of the space.
However, many newspapers now link print classifieds to online photos and “virtual tours,” and find they
strengthen response and revenue. In some cases, this is migrating from the old “print to Web” model and
becoming a “Web to print” play.
Electronic tearsheets: One of the most tedious, expensive and frustrating chores for a newspaper ad
department is distributing tearsheets to advertisers for proof of publication, invoicing and verification of
reproduction quality. Electronic tearsheets, which serve all those functions more quickly, more effectively
and a lower cost, are one of the fastest-growing Web-based newspaper tools.
Electronic editions: Hundreds of newspapers now provide electronic editions, either with Webbased software that distributes the “paper” through a browser, or through distribution tools that allow one-off
printing at remote locations such as hotels and on cruise ships.
Micro-payments: Advertisers, especially private-party advertisers, pay online for their ads, and
archive users now routinely buy individual articles from back issues. Archives are still a very small revenue
stream at most properties, but they’re growing.
Online subscriptions: More and more newspapers are putting their Web content behind subscription
firewalls and charging monthly fees. While I think this is an awful idea, there’s still too little hard data to
show whether it is working or not. (So far, the extremely limited information available about early launches
seems to indicate it’s a colossal failure.) However, there are clear subscription models that work – including
specialty content like crosswords, exclusive high-value information (think “Wall Street Journal” and
“Consumer Reports,”) – and no doubt more will surface.
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.
Photo sales online: Many newspapers, especially small community papers, generate significant
income through sales of their photos. In some cases, they use digital photos to drive traffic online, and then
sell prints – and/or sell prints of photos that appeared in the print edition. (One newspaper we heard about
paid its photographer a small percentage of sales, thus allowing the photographer to augment his income and
providing an incentive to post more images to the paper’s Web site.)
Circulation / routing / mapping software: Circulation departments are regularly using Internet
tools to improve their routes, strengthen single-copy sales, and reduce driving miles.
Selling subscriptions online: Depending on their size, and how aggressive they are, newspapers are
selling dozens, hundreds and in some cases thousands of subscriptions online every month. And it’s been
proven that these are the lowest-cost and highest-retention subscriptions that a newspaper circulator can
receive.
Ad delivery: It’s so routine that it almost doesn’t merit a mention. But how many newspapers would
incur significant new costs and lose revenue if they had to give up regular delivery of ads via the Internet
from both local and national advertisers? Just about all of them. And it’s not just dailies – weeklies, too.
Ad proofing: Just as ads are delivered online, proofs to advertisers go back and forth routinely
through the Web. Car dealers can open a PDF, print it, proof it and return it with corrections much quicker
than in the days when a “dispatch” driver had to drop off a page proof and return to pick it up a day or two
later.
Direct e-mail sales to advertisers: Newspapers are starting to use e-mail as a focused, targeted sales
tool – and achieving superb results.
E-mail classified advertising renewals: Is a classified ad expiring? If we’ve got the advertiser’s email address and permission to use it, it’s cheaper and faster to sell the renewal through an online channel
than it is through the telephone sales department.
Procurement: Knight Ridder has started using the Internet to conduct “reverse auctions” for
purchasing of newsprint, and many newspaper companies use the Internet for routine procurement of
supplies. This is another way to drive down costs and use “just in time” ordering processes.
This is a look at just the business-side applications of the Web. Of course, the Internet has had an
impact as well in the newsroom – from online research by reporters, to grabbing a quick Mapquest routing
to an assignment, to cutbacks in use of news hole for things like stock tables and sports agate because the
content can be made available online.
Each of these offers another way to turn the Internet into a valued business tool – a money-saving,
time-saving, improvement on the way we did business just a few years ago. As you review the list above, ask
yourself: “How many of these am I doing?” If you’re not doing all of them, or at least considering them for
integration into your daily operations, you’re missing out on great potential for improving your business and
your bottom line.
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.
About Classified Intelligence
Classified Intelligence is an in-depth consulting service that works with you to develop successful,
real-world businesses. We deliver must-have competitive intelligence about interactive classified advertising
– automotive, employment, real estate and auctions/merchandise.
We talk with you regularly. We work with your company face-to-face. And we keep you up-to-date
on what’s happening in the field of e-classifieds with our regular and special reports.
Classified advertising is a $100-billion-plus business worldwide. The business is expected to grow
substantially, with new forms of interactivity – direct online auto sales, rich contextual matching of job
opportunities with potential employees, and full-motion video of houses for sale.
Classified Intelligence is for…
 Newspapers: Expand your classified advertising revenue by combining the best of print and
online services.
 Dot-coms: Grow your business with new ways of serving Internet users with automotive,
employment, real estate, merchandise and personal ads.
 Broadcasters: Capture non-traditional revenue by tapping into a local marketplace that has
always belonged to your print competition.
 Vendors: Stay tuned in to what your competitors are doing, and what your clients want, as you
build and provide the technology needed to build and offer e-classifieds.
We’re experts on interactive media. We help build interactive products and services; we don’t just
talk about them based on flimsy research. Our analysts and consultants are well known and respected. We
speak nationally and internationally and work with top media companies.
Classified Intelligence clients receive:
 Regular conference calls, when you meet privately with your analyst – someone who knows the
issues and your company – about issues that matter to your company
 Customized on-site consulting visits – meetings, workshops, intelligence briefings
 Classified Intelligence Report, twice monthly
 Classified Intelligence Advisories, reports focusing on a topic of immediate interest
 Classified Intelligence Alerts, immediate analysis of major newsworthy actions
Classified Intelligence is about who’s doing what … who’s planning what … who’s working with
whom … and what you should be doing to improve your classified business.
Classified Intelligence is affiliated with the Advanced Interactive Media Group, L.L.C,
aimgroup.com, an industry-leading consulting firm that works with some of the biggest names in the media
and corporate worlds. Our clients include:
 Newspaper Association of America
 Tribune Co.
 AutoTrader.com
 CareerBuilder
 Hearst Newspapers
 ABC News
 Daily Mail Group and Trust
 News12, Long Island
 Sears, Roebuck and Co.
 WRAL-TV
 Morris Communications
 Radio and Television News Directors
Foundation
 Washingtonpost.Newsweek Interactive
 PowerOne Media
 Workopolis
Associação Nacional de Jornais – Nucleo de Mercado
Prepared by Peter M. Zollman, Classified Intelligence, L.L.C.
pzollman@aimgroup.com, (407) 788-2780
© 2003, Classified Intelligence, L.L.C.