Urgent calls and letters seem to come every day to publishers, saying: "You've got to put your classified ads into a national searchable database or you might lose your franchise."
A big caution: Newspapers need to keep their classified revenue for themselves! Classifieds are the easiest product to put on line and newspapers need that revenue to pay for their on-line editions.
The urgent soliciations from national search engines cite research claiming that up to 40 percent of newspaper classified advertising - especially automotive, employment and real estate classifieds - will be lost by the year 2000, if newspapers don't take action now.
That's scary stuff to newspapers, many of whom derive 40 percent of their advertising revenue from classifieds.
There are four or five of these companies making calls, sending letters, running trade show booths and placing ads in newspaper trade journals.
These companies are pushing a basic product: An up-sale of newspaper classified ads for placement into an Internet search engine.
These products can be very costly — 30 to 50 cents per each classified transmitted to the search engine. So a newspaper carrying 100,000 classified ads a year would be paying one of these companies $30,000 to $50,000 a year.
That revenue should be captured in-house by newspapers wants to be a player in the on-line world. Publishers should be cautious about giving up one-third to one-half of that revenue.
The search engine companies are recommending that newspapers raise the price of their classified ads by $1 to pay for the Internet search engine. The newspaper keeps what the search engine company doesn't take.
I've got a couple of serious concerns about these programs.
1. Newspapers need to hold on to their content. Newspapers ought to be extremely careful about allowing others - especially any kind of Internet company - to have their content. Linking your readers to someone else's Internet database might not be in your best interests. This is true of both news and advertising.
I've looked at statistics for many on-line newspapers. The statistics show, consistently, that news is the most important content sought by readers of on-line newspapers. Classified ads receive the second largest number of on-line hits. Our research at over 80 newspaper sites shows that 32 to 42 percent of all hits on on-line newspapers are readers looking at classified ads.
Readers go to on-line newspapers seeking classified ads. Classified ads increase traffic for on-line newspapers, and increasing traffic should be a major goal of any publishers with an on-line newspaper. Losing content will lose readers.
2. Proximity is one of the key reasons readers look at newspaper classifieds. They want to know that the products they're looking at are close. How many garage sales will be visited, how many used pickups will be sold, or how many clerical jobs will be filled through a national database? These types of ads are the heart and soul of most weekly and daily newspapers.
3. Newspapers can run their own searchable and/or browsable classifieds on the Internet for nominal costs.
Regional classified databases can be created at far less cost that 30 to 50 cents per ad. All you need is the cooperation of newspaper publishers within 75 miles of each other. Group newspapers should look hard at this option.
For examples of this kind of product (all created, I admit up front, by my company), look at the Feather River, Calif., papers at http://www.plumas.com.">http://www.plumas.com. Or the Malibu, Calif., Times at http://www.malibutimes.com.">http://www.malibutimes.com. Or the Towne Courier in East Lansing, Mich., at http://www.townnews.com/courier.">http://www.townnews.com/courier.
4. The national search engines require a boost in classified ad rates. Experts say one of the reasons that newspaper classifieds are vulnerable is that classified ad rates have climbed more than four times faster than the rate of inflation in the last 20 years. If newspapers want to protect this valuable part of the franchise they should look to options that don't necessarily require their customers to pay more per ad. (Or if the price is raised, the money goes to the newspaper).
Fear tactics aside, newspapers can and should publish their own classified ads on their own Web sites.
Remember, classified ads draw readers to on-line products. The cost is less and the product is better for newspapers, newspaper readers and customers who buy classified ads.
Newspapers need to be on-line with their classifieds, but they don't need to spend thousands of dollars to do so.
(Marc Wilson is a long-time journalist who is now general manager of the International Newspaper Network in Bigfork, Mont. His company helps more than 60 newspapers publish on-line editions. He is reachable at 1-800-579-6397).