Peter Ellis warned publishers about a new wave of companies trying to snag a piece of newspapers' $13.7 billion classified-ad pie: "There are two guys in every city with a garage, $400 and a desire to change things. They're going to attack your rear end. If you're going to survive, you're going to have to understand the new technology."
He should know. President and co-founder of Auto-by-Tel of Corona del Mar, Calif., an online service linking car dealers and buyers, Ellis is one of those guys in a garage. With an NAA study suggesting that the newspaper industry is at risk of losing up to half of its classified-ad revenue, in part due to the proliferation of competitors like Ellis, services and products to help publishers keep a competitive edge online drew scads of eyeballs at NEXPO. A recurrent theme: differentiating between print and online classifieds.
"If you try to do what you do in print, you are doomed to failure," Ellis warned. "[The user] is coming from a totally different perspective."
Numerous products now exist to create searchable online classifieds. Edgil Associates Inc. (North Chelmsford, Mass.) checks in with AdParse and WebCentral, which automatically extract keywords and synonyms from classified text and create an indexed, online database.
Many garage competitors now go beyond searchable classifieds, offering additional content or context to draw advertisers and readers. At NEXPO, a host of new companies--many of which could trace their own roots back to garages--offered services allowing publishers to take that extra step as well. "You can dump classifieds on the Web and let [users] do the work," explained Donald Dornbush of Virtual Resources Inc. of Ann Arbor, Mich. "Or you can take away the pain."
As its painkiller, Virtual Resources offers the ability to enter a wide range of criteria to narrow thousands of possible matches to, say, several-dozen matches for a job as a part-time Unix administrator. Newspapers could offer advertisers space on the CareerSite service as an up-sell, Dornbush argued. The service allows employers to post more positions than they could in print and browse a confidential online index of resumes; it attracts "casual" job seekers print ads don't, he says. In a similar approach meant to simplify the repetitive task of searching in hard-to-find categories, AdOne Classified Network Inc. of New York City offers AdHound, a service which e-mails classifieds which meet users' selected search criteria.
Along with context, content remains vital. In posting car ads online, for instance, Electric Classifieds Inc. of San Francisco adds to each listing relevant automotive pricing and safety information as well as directions to dealerships--along with relevant display ads. "Advertisers are willing to pay for that deeper and broader content," argued Jordan Graham, ECI's president and CEO.
As yellow-page publishers create online versions of their products, some companies offer publishers ways to defend that franchise. "Newspapers have competed with yellow pages for years," said Bruce Murray of Palo Alto, Calif.-based Zip2, which markets yellow-page applications. "It's a logical area to pursue."
The Washington Post does, in partnership with BigBook Inc. of San Francisco. The online yellow-page model remains similar to its print counterpart: Create searchable listings of every business in a market and then upsell such features as top-of-listing status, pictures, links or e-mail. Zip2's prototype uses Java technology to draw a detailed map providing directions from the user's location to any business, as well as the ability to convert user e-mail into faxes--and vice-versa--to sell connectivity to non-wired businesses.
Regardless of approach, online specialists warn publishers to take nothing for granted. "I was one of the guys in the garage," Auto-by-Tel's Ellis said. "[Now], we have the potential to move one million customers in the next 12 months. Now I've got to watch the guys behind me."
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