A classified ad buried in the back pages of your local daily might not seem like much. For newspapers, though, classifieds can account for as much as a third of ad revenue–the primary way most print-media businesses make money. But it's getting harder. At the Toronto Star, Canada's largest daily, the volume of ads placed has steadily declined for years.
Online, though, classifieds are booming. Last year in the United States, online local ad sales grew an estimated 26%, to US$3.2 billion, according to a report by JupiterResearch; some 70% of that revenue came from classifieds.
The poster child for this trend is Craigslist. Craigslist.org offers free local classifieds on a network of 204 bare-bones websites around the world, acting like a big community bulletin board–but online and searchable. At press time, 11 cities in Canada had Craigslist sites, with a total of about 121,000 listings. Operated out of a house in San Francisco by 18 people, Craigslist charges only modest fees for Help Wanted ads in select cities, and had estimated revenue of US$25 million last year.
Clearly, local advertising has a place online. Google and Microsoft are now both experimenting with classified-like services of their own. The Star doesn't plan to be left behind. Its parent company, Torstar Corp., created Torstar Digital in January 2005, and last month the division launched LiveDeal.ca, an online classifieds site. Created in partnership with Santa Clara, Calif.-based LiveDeal.com (a company in which Torstar Digital acquired a $3-million minority stake in October), the site aims to grow revenues online–and lure more classified advertisers into print. The pitch: buy a classified in any of Torstar's four dailies, and it gets posted online for free (although the advertiser will pay for extra online features, like pictures). “The newspaper now has more to sell to [classified] advertisers,” says Tomer Strolight, president of Torstar Digital. “We see upside there.”
That's just one example of how traditional print media companies are fighting to keep up with the Internet. Readership is slipping steadily at newspapers in Canada and the United States. According to recent unaudited figures provided by Canadian publishers to the Audit Bureau of Circulation's Canadian office, total circulation at dailies has declined about 3%, on average, from 2002 through 2005. Many access a series of websites throughout the day to keep themselves informed, instead of just relying on newspapers or magazine–TNS Canadian Facts, an online-research group, states 74% of people who use the Internet read news online. So corporate advertisers are shifting to online campaigns, often at print's expense. According to the Interactive Advertising Bureau of Canada, online ad sales were worth $519 million last year, up 43% from 2004.
Given this, many newspapers and magazines are bolstering their online offerings, using the web's unique qualities to attract more readers. Blogs–daily journal postings to a website–are one way of engaging readers on the web; many reporters experimented with blogging during the recent federal election. Reader forums are another. Of course, it can be hard to get noticed within a rapidly expanding blogosphere: Technorati, an online directory, tracks some 75,000 new blogs every day, and estimates there are now more than 27 million.
The technology enabling blogs and other automatic content updates is known as RSS (an abbreviation for “really simple syndication”). This software coding lets a website's audience receive updates automatically via a special application called a “reader”–there's no need to browse a site in order to access content. Click on an intriguing headline in the feed, and the story opens in a browser–encouraging return visits.
News organizations still struggle with how much of their writers' work ought to be available online. On The Globe and Mail's web properties, for instance, some content is open to anyone, some requires free registration, and other articles are by subscription only–even if you already get the print version. By contrast, the Toronto Star's TheStar.com recently lifted all barriers to its site, launching a series of blogs and podcasts (online audio files) to attract an online audience.
Google News aggregates news headlines, photos and sometimes the lead paragraphs of stories from online news outlets. But some organizations chafe at their reporting being picked off that way. The Paris-based World Association of Newspapers launched a campaign in January, challenging the practice on the grounds Google doesn't compensate news organizations for this.
This fight is reminiscent of another thorny debate Google is having with another form of print: books. The Google Book Library Project is a plan to scan the world's books–without publishers' explicit copyright permission–and make the contents searchable. Readers could view sections, but not the entire book; advertising links direct them to online book retailers. Authors and publishers are suing Google under U.S. copyright law.
The cozy world of the printed word is being turned upside down. But as far as Torstar Digital's Strolight is concerned, if you can't beat 'em, join 'em–especially if online ad sales continue growing at their current rate. “Nobody has solved all of these issues,” say Strolight. “The Canadian print industry has tremendous assets–audiences, brands, content. The magic lies in marrying those with skills that are unique to the digital realm. Whoever does that will harvest some very big prizes.”
