How bad do things have to get before publishers and classifieds managers are willing to do a complete (and badly needed) remodel of newspaper printed classified sections?

‘No one wants to be first. It’s amazing to me that they can’t/won’t/don’t want to try something different!’ -Bill Ostendorf

That question kept popping into my mind as I interviewed Bill Ostendorf, long-time newspaper designer and advertising consultant, about how to improve and save printed classifieds. As CEO of Creative Circle Advertising Solutions and Creative Circle Media Consulting (Providence, Rhode Island), Ostendorf is in the business of coming up with new ideas for improving newspaper operations and growing revenues, including lots of work with classifieds (print and online, but for this article I’m focusing mostly on print).

He and his team are creative folks, and just in the classifieds space they have at least a dozen concepts for improving and growing a newspaper’s classifieds that get presented each time they walk through a new door. Well, they’ve got many more ideas than that, of course, but those are the ones that Ostendorf is convinced will work at making a newspaper’s classifieds more successful — but haven’t been tried yet. As often as he’s pitched them to newspaper executives and gotten positive signals that they are good ideas that probably will work, no one has yet had the courage to implement them.

“I know they would work!” he says, and has the research to back it up. “But no one wants to be first. It’s amazing to me that (newspaper classifieds and advertising managers) can’t/won’t/don’t want to try something different!” (Ostendorf likens newspaper executives to lemmings, and says he wishes he could just push the first lemming over the cliff so the rest of the industry would follow.)

For example, one of the key weaknesses of most newspaper classifieds is that they are put off in their own section, which is read usually only by those people who are looking for something. Ostendorf believes, and he’s hardly alone in this thinking, that classifieds should also be included in other relevant sections throughout the newspaper:

• In the Sports section, add a featured grid of cars for sale. These ads can be from the regular Autos classified section, where advertisers have paid an extra upsell fee to be included in Sports.
• In the Gardening weekly section, include upsold ads from nurseries, landscape designers, and landscape construction companies.
• And so on.

Such classifieds-in-editorial-sections also present an opportunity for newspaper classifieds reps to sell some new and effective inventory outside of the traditional classifieds section, such as display ads from athletics stores and gyms to accompany the classifieds in the Sports section example above.

Ostendorf also advocates doing regular category classifieds specials, such as a weekly weddings and engagements ad special to accompany editorial content in the Lifestyles section. Or a special Graduates package in Lifestyles, where parents can buy classifieds ads — including photos — to celebrate their kids’ achievement. Do it in a classy way, he urges, with sophisticated design and graphics; avoid the cheesy balloons and flowers clip art.

The key point, says Ostendorf, is to add exposure of classifieds to newspaper readers who don’t know they want to buy something (like a set of golf clubs, say, spotted while reading the Sports section). That approach adds power to a classified ad beyond being in a section that a minority of newspaper readers don’t open because they’re not looking for something that particular day.

Stuck in the 1960s? You’ve got to be kidding

Getting such common-sense ideas implemented is tough in large part because of the conservative nature of middle-level newspaper classified managers, Ostendorf says. The typical classifieds section in a newspaper, after all, still looks like it could have been published in the 1960s. Not much has changed over the decades other than narrower columns and smaller type. There’s seldom color; there are seldom photos. “That’s so stupid, it’s hard to believe,” he says. (My head is nodding in agreement.)

And speaking of dumb, that would be a good way to describe the tiny type that many newspaper classifieds sections continue to use. I dare say I don’t need to explain why, as the average age of newspaper print readers continues to get older, small type is a really bad idea.

Ostendorf’s company does regular national surveys of newspaper readers on behalf of its clients. A 2006 survey focused on print classifieds found:

• 40% of classifieds readers said it’s hard to find things.
• 41% said classifieds sections are too hard to read.
• 38% said they’re too disorganized.
• 57% said they would use classifieds more if they were more legible.
• 59% said they would use classifieds more if photos accompanied ads.

That last point is a good innovation that more print classifieds sections should implement. (Though, frankly, to call adding photos an “innovation” is a bit silly. It’s more like an obvious feature that’s been ignored by many newspapers.) But the problem, complains Ostendorf, is that many newspaper front-end systems can’t accommodate classified advertisers uploading photos to accompany their ads.

That’s also a huge road block for many newspapers to effectively integrate print and online classifieds. “We’ve come up with lots of strategies (to do that), only to have newspaper executives say, ‘Our system can’t do that.’”

One key feature that Ostendorf would like to see is the ability for advertisers to change their ads from day to day; for example, for a 30-day run of a house for sale ad, the seller should be able to modify the price (or anything else) and have the change show up in the print edition the next day, as well as be reflected online.

Stamp out risk-averse thinking!

What is it going to take for newspapers to get serious about redesigning print classifieds so that they are relevant and successful in the Internet age? Ostendorf blames a risk-averse culture at many newspaper companies, where entrepreneurialism within the organization is still punished rather than rewarded. Many classifieds managers are compensated based on gross revenues or revenues minus costs, so trying something new and risky that has no guarantee of revenue success can mean personal loss. “It’s no wonder we’re not going anywhere,” he says.

What’s needed is for publishers to start providing incentives for classifieds managers to launch new initiatives, Ostendorf says, recognizing that two out of three may not work. Without a dose of entrepreneurialism, newspaper classifieds will continue to decline badly.

“Many of today’s classifieds managers were brought up in a culture where money was easy, so they didn’t take risks,” he says. They must not only be taught to take risks, but be incentivized to do so.

Newspaper classifieds are in a bad way. Things are truly awful enough that publishers and their classifieds managers can take some risks, try out some new ideas. Ostendorf has some for you to try.

• Monster.com rolling out new job sites. (Crains New York Business) Career site operator Monster Worldwide Inc. announced it will launch co-branded recruitment Web sites with more than a dozen local newspapers Monday, part of the company’s effort to push its brand in specific markets. …
• Zillow.com Offers Featured Listings With Newspaper Ads. (Online Media Daily) Real estate agents and home sellers buying a classified ad with their local newspaper will now be able to buy a featured for-sale or open house listing on Zillow.com at the same time. …
• Yahoo and the Newspaper Publishers: Playing with Fire (Ken Doctor) As Yahoo burns, the newspaper industry watches, hoping it won’t get singed. …

Newspapers need to be thinking foremost about creating services that are truly useful. Find a service that people will use on a regular basis and that benefits them in a substantial way, and you’ll win their hearts and loyalty. (That’s pretty much what Google does on a regular basis. Newspaper companies: not so much in comparison.)

Show this WashingtonPost.com phone message to get a dining deal.

Here’s a service that I long for. It will allow me to use my mobile phone to find a restaurant to eat at, near my current location, and give me a discount coupon that I can use by showing my phone to the waiter.

Such a service now exists, though on a limited scale.

This week, WashingtonPost.com announced a couple enhancements to its “Deals & Discounts” online shopping service: 1. adding restaurant discount coupons to existing retail offers from local D.C.-area stores, and 2. adding a mobile component.

The program is just getting started, but it points to a new type of advertising service that can, when built out fully, be as useful as Google. You’ll be able to find discount coupons for restaurants (or local retailers) by using a smartphone, and then use the phone itself as your “coupon” to get your discount. (The accompanying photo shows a text message that can be used to get a discount at the La Ferme restaurant in Chevy Chase, Maryland.)

Unfortunately, most of us don’t yet have mobile phones that have good web browsers like Apple’s iPhone or the new iPhone clones being introduced. For the unlucky with older phones with less-than-stellar web browsers (like my Blackberry, pictured here), the way to use this service is to go online first to find a coupon, or find one from a coupons directory in the newspaper.

Washington Post/Newsweek Interactive product development director Henry Tam explains that for now, using the old methods of print and the web is the way most people can get the program’s discount coupons onto their phones.

• Consumers can search the Discounts & Deals website, where they are given codes to send in via text message; they are returned a text message to their phone which serves as the “coupon.” (Show it to your waiter.)
• The Post also is now publishing a printed directory of discount coupons in the newspaper, with phone codes to text-message in to receive back a text-message coupon on your phone.

WashingtonPost.com’s discount coupon directory offers print and send-to-mobile-phone options.

While the prospect of doing all of this on your phone while you’re walking around downtown or sitting in your car is tantalizing, that’s still in the future for most people. But Tam says the service works well for most people even using a computer and web browser or print directory to load up the phone coupons.

Tam says that his team considered using graphical/multimedia coupons that would be displayed on phones, but decided to keep it simple with text messages (like the one in the photo above). This not only serves consumers who have older phones, but it keeps things simple for retailers and restaurateurs, who are not always the most tech-savvy.

The Post’s experiment with mobile coupons currently includes 30 D.C.-area restaurants. Wait staff had to be trained on the program, so they know to accept a mobile phone message from a diner as a discount coupon.

The mobile program started earlier this week, but Tam says it’s already showing some results, with 30 people showing the mobile coupons in restaurants in the first few days. Mobile likely will take a while to ramp up; one restaurant reported eight coupons redeemed through the Post program, only two of them mobile coupons and the rest printed out.

With the program in its infancy, there’s still plenty of innovation to come. Tam says that targeting coupons is in the plan, for example pushing out only coupons to Thai restaurants or only for certain neighborhoods.

In terms of ad sales, Tam says the Post ad sales force is including the Deals & Discounts program into existing print ad and online ad programs, as an add-on. “This has really resonated with the ad sales force,” he says.

What are future implications of this type of program? If it becomes normal procedure for diners to check their phones before walking into a restaurant in order to find a coupon, it could mean that most customers will be getting discounts. Will restaurateurs be OK with that? Tam says his team has pondered such issues and discussed them with local business owners. He thinks that most restaurants, especially, will be perfectly happy if most customers present coupons; they are most interested in “getting more butts in seats,” he says, and if coupons do that, restaurant owners are happy.

Specific to the restaurant category, some high-end eateries are not so much into offering “discount” or “buy one entree, get one free” offers; it’s a bit low-brow. But Tam says that the mobile and web coupons-on-demand can still work for them with special-event or other types of promotions.

For more information about the Post’s Deals & Discounts program, Tam can be contacted at henry.tam@wpni.com.

Craig Newmark (do I really need to explain that he’s the founder of Craigslist?) went before a group of editors at the Washington Post this week, and here’s a short video excerpt:

Newmark has long been saying that his network of free-classifieds sites is not a significant reason that newspapers have lost billions of dollars in classifieds revenue. That’s still his line, but here he does acknowledge that after speaking with lots of publishers and industry analysts, “They do tell me that we do have an effect on classifieds revenues, and it’s a real effect.” But he says “the magnitude of the effect has become exaggerated; it’s become an urban myth.”

He thinks that “overly aggressive sales reps” from niche jobs, auto, and real estate sites are the ones truly doing the damage to newspaper classifieds, because they’ve had good success drawing money away from newspapers.

I’ve always felt that Newmark is a genuinely good person who’s out to improve the world, but I also think he’s in denial about the impact he’s had on the newspaper industry. Now, if Craigslist hadn’t come along, something and someone else would have come in his place. So if Craig Newmark hadn’t been born, newspapers would still face the same dilemma.

But (editorializing ahead…) I don’t think that gets Newmark off the hook. I also hear in his public statements concern that the newspaper industry’s financial crisis is bad for journalism and for the public’s right to know what’s happening; he’s fearful that the investigative and watchdog role newspapers have played historically will diminish so badly that society will suffer.

I can’t help but think that Newmark and his Craigslist co-executives should ponder how to work with the newspaper industry in a way that benefits both — and perhaps saves some jobs of professional journalists. (They can’t all work for ProPublica, the investigative journalism start-up that Newmark admires.)

Craigslist has long been a notoriously closed system; other websites are not allowed to scrape its ads, and certainly other websites aren’t allowed to place ads into the Craigslist network. A policy change on the latter specific to newspapers, allowing them to feed qualified ads (that is, vetted and not spam) into local Craigslist sites, is one idea that could benefit both sides.

(ADDENDUM: Short response from Newmark, who thinks that his response to the Washington Post editors isn’t any different than previous statements. “Jim (Buckmaster, Craigslist CEO) and I have been saying, for years, the same thing: our effect is minor, according to publishers and industry analysts.”)

If you think ReinventingClassifieds.com targets a narrow niche (newspaper classifieds), here’s a site that’s even narrower: VideoIsNow.com.

Published by Alan Jacobson and Janet DeGeorge (who also run a video classifieds business, profiled here previously), the VideoIsNow blog features ongoing coverage of video advertising, with particular emphasis on video applications for classifieds.

It’s worth bookmarking. Or subscribe to its RSS feed.

Video ads like this will become increasingly common, and represent a largely untapped business opportunity

If newspaper designer and consultant Alan Jacobson is right, there is still a big opportunity open for newspapers to get in on something new online — and make some money from it — before others beat them to the punch, as has happened so many times before to newspapers on the Internet:

Video classifieds.

While that may not sound groundbreaking in the age of YouTube, applying personal video to classifieds is not yet something that has taken off. Consider Craigslist, the website network that has probably done more than any other to hurt newspaper classifieds. It has no video strategy (other than the occasional advertiser posting a link to a video), and its executives have expressed no desire to enhance the sites with video features. Continue Reading »

(Editor’s note: The author is a retired newspaper publisher turned academic, and was director of Knight Ridder’s 25/43 Baby Boomer readership project, which included an experimental reinvention of print classifieds, in 1990.)

In nine months since I was carried from the bloody arena of the newspaper business and ascended to the ivory tower, I’ve gained this perspective: Most newspapers don’t need the best new idea to grow their classifieds business. They mostly need to get better at executing what they already know.

I’m not an expert on classified advertising, so I can’t offer advice to anyone else. Here are a half dozen things I wish I’d done about classifieds and what I would do today:

• Stop obsessing about the national trends. Here in flyover country, there was no real estate boom and there’s no bust. Employment numbers remain healthy. Wichita Craigslist has been around for a few years, but hasn’t become an established marketplace in any vertical. It isn’t too late to save the business in Wichita or lots of other places in America.
• Invest in technology. We dithered endlessly over how to get our advertising and accounting systems to talk to each other. We found a hundred barriers to having our customers place and price their own ads. I should have been more insistently impatient about finding and financing solutions.
• Invest in people. Newspaper/Internet outside salespeople should be the most qualified and the best paid in the market. They should have the technical and clerical support they need to focus their time on selling to auto dealers, Realtors, employers and employment agencies. That wasn’t true at any of the newspapers I worked at over a span of 35 years.
• Get rid of the newspaper/Internet pricing silos. Advertisers should be sold eyeballs, not platforms. Companies allocate revenue to make their web operations look better at the expense of their newspapers. No wonder people think newspapers are failing. The truth is, the local newspaper and its website are a dynamite combination. Sell them that way.
• Stop tinkering with in-paper presentation. If the type is readable and the classifications are clear, readers will find and act on the ads. No amount of tweaking the color and headers and unpaid content will make a material difference in profitability.
• Promote. Promote. Promote. God should strike us down for cutting the classifieds promotion budget year after year. We got the results we paid for.

Lou Heldman is Distinguished Senior Fellow in Media Management and Journalism at Wichita State University. He is retired president and publisher of the Wichita Eagle and Kansas.com. You can reach him at lou.heldman@wichita.edu.

Apple’s new iPhone 3G, announced earlier this week, is likely to become a mega rock star among smartphones, now that Apple has lowered its price to $199 (with 2-year commitment to AT&T service and additional $30-a-month data plan) to appeal to a mass market. The first-generation iPhone has about 6 million units in customers’ hands globally, and Apple’s goal is that iPhone 3G could add create another 10 million iPhone users this year.

What’s that got to do with classifieds? As should be obvious, smartphones like the iPhone represent a new and increasingly powerful way to reach consumers. Newspaper publishers should be thinking of ways to get their content onto the iPhone platform, including not just news but also classifieds.

I think there are many possibilities, but just to get you thinking, here’s one: Design a garage sale iPhone app that will pull in ads for local garage sales and map them. (This app would — no, must — bring in ads from the local newspaper AND other sources, especially free-classifieds sites like Craigslist and Kijiji.) Utilizing iPhone 3G’s new GPS functionality and ability to show map directions, the app would be a fantastic tool when driving around on a Saturday morning looking for garage sales.

How’s that make money? Some possibilities: contextual display advertising sold around the ads as part of the app; location-specific advertising (phone pops up an ad for a restaurant when phone user is near); upsells for garage sale advertisers (photos, video, map highlighting, etc.).

A more sophisticated potential iPhone app: Use the iPhone’s GPS capabilities and auto dealer inventories to allow an iPhone user to find specific cars and get directions to the dealers. The same idea would work well for real estate; drive around town looking for houses and let the iPhone be your guide.

Clearly, other people and organizations will build such applications for the iPhone in the next year or so. But classifieds-related apps are an obvious fit for newspapers. I encourage publishers to get their tech teams working on some iPhone projects now.

ReinventingClassifieds.com essay competition offers cash prize for best idea or solution to the newspaper classifieds crisis

BOULDER, Colorado (June 6, 2008) — College students studying journalism are entering a tenuous employment market, in part because of the newspaper industry’s decline — much of it fueled by the losses of billions of dollars in revenue for newspaper classifieds. Graduates today not only have to figure out how to find the right job for themselves, they’re also the generation that needs to reinvent journalism and the business model of the news media!

ReinventingClassifieds.com is holding an essay contest to tap the creativity and energy of today’s college students (those studying journalism, advertising, marketing, and business, especially) — and reinvent newspaper classifieds (print and online). A cash prize of $250 will be awarded to the student who authors the best essay about how to make newspaper classifieds relevant again in the Internet age.

“Some of the best ideas about transforming ‘old media’ come from young people who are unconstrained by old notions of how media companies should operate,” says Steve Outing, editor of ReinventingClassifieds.com. “The newspaper industry — long a major employment source for new graduates — needs help in redefining and reinventing itself and becoming relevant to younger people. Who better to solve one of the industry’s most vexing problems than college students, many of whom for so long have relied on newspapers to launch their careers!”

Students wishing to enter the contest simply need to do an essay addressing the topic: “What would you do to bring revenues back to newspaper classifieds?”

Entries can be in any form: written essay, video, audio, or multimedia presentation.

The winning essayist will receive $250 cash from ReinventingClassifieds.com. A runner-up will receive $50.

Ideas submitted as part of the contest may be published on ReinventingClassifieds.com, so publishers can benefit from the creativity of today’s college students.

Deadline for entries to the competition is September 30, 2008. Submissions are being received at this webpage:

http://www.reinventingclassifieds.com/collegecontest/

Spread the word!

Post this PDF flyer at your school, and share it with fellow students. Professors and instructors: Please let your students know about this opportunity. (Click thumbnail to download the flyer.)

JP Morgan published a report concerning the state of the newspaper. In this report the analyst Alexi Quadrani posts the classified issue as one of the central problem of today’s print newspapers:

“The classified revenue plunge is one of the more worrisome aspects, since it represents about one-third of revenue and is the most profitable of advertising categories. Though the comparisons should be easing, at least in theory, Quadrani and her team estimate the classified revenue will continue to suffer double-digit decreases throughout 2008.”

Further challenges are the strong cutback on expenses to reach profit yields last year but not having this opportunity in 2008 anymore. In this article she also rates different newspaper groups: “JP Morgan Issues ‘Negative’ View of Newspapers.”