MEDIA MARKET DATA - World Association of Newspapers

Classifieds – GenerallyGlobalClassified advertising is now moving to the next stage, one in which free classified ads willserve as content opposite targeted, paid-for display ads, much like any other form of content,such as news or feature stories, according to a new report from Jupiter Research. In theprocess, major national sites will emerge to dominate classifieds using this new model,sapping them away from traditional local classified vehicles, such as daily newspapers,predicts the study. “New competitors will use networked classifieds to do to classifiedadvertising what the web did to content,” says the report. And as these new competitors,which will include the likes of Microsoft and Google, wrestle for control of the classifiedmarketplace, it will have an enormous impact on local papers. “They are going to getremade,” says Barry Parr, lead author of the Jupiter Research report, referring newspaperclassifieds. “You won’t see online killing them right away. But you clearly would seerevenues decline, and you could see more creativity in the way they are presented.” In thereport, called “Classified Advertising: Seizing Opportunities during a Second Wave of MarketDisruption,” researchers forecast that the online classified market will grow some 60 percentover the next five years, for a compound annual growth rate of 10 percent. While that’s notquite as fast as the 79 percent they are forecasting for search marketing over the five-yearperiod, classifieds are expected to hold their share of the online advertising market, currently22 percent. But the forecast for a static market share belies the huge changes as what has longbeen a local business falls increasingly under the control of a small number of nationalcompanies. These companies will be able to use information learned about someone searchingthe classifieds, such as where they live, what sort of job they do or where they are interestedin buying a house, to help deliver highly targeted paid display ads. Already Google andMicrosoft are in the early stages of pushing in and reforming the market. And Parr expectsCraigslist and Yahoo to enter too. “This is really early on in the market. It’s not as if you havethree or four major operators duking it out for control of the majority of classified advertising.But a year or a year and a half from now it could look a lot different,” says Parr. Already outthere is a site called Simply Hired, which was developed by a small company for jobclassifieds. It follows what Parr sees as the new model. It spiders the web for job ads fittingthe user’s search and presents these opposite targeted, paid-for display advertising. The bonesof the new world are also in Microsoft’s Windows Expo Live, currently a beta version offeredin Seattle. The product gives away classified advertising but aims to make money by upsellingfeatured listings to advertisers and selling targeted contextual advertising against theclassifieds. Another expected competitor is Craigslist, which despite shaking up the marketinitially, has not yet made the jump into using its site to sell display advertising against theclassifieds. The potential for such a system is also present in Google’s Google Base, a productthat attempts to build a universal database that can store all information. While currently mostof this potential is unrealized, Parr believes Google will develop this application. As this newmarket develops it will have a great impact on newspapers, believes Parr, who says those thatdon’t have a relationship with a national online classifieds partner are at a competitivedisadvantage relative to the national players. The new world will force changes in newspaperprint classified sections. While it is as yet unclear exactly what form they will take, Parranticipates print classifieds may take on more of a display advertising quality, moving towardbrand advertising. “I don’t think that it will all shift online,” says Parr. “But it may becomeunrecognizable as classifieds.”http://www.medialifemagazine.com/artman/publish/article_4606.asp; May 9, 200626