6) Disrupt CraigsList
Instead of learning from our failed newspaper brethren, let’s take a lesson from CraigsList itself. They stole our lunch by giving away something we couldn’t or weren’t willing to give away ourselves. It’s our turn to steal their lunch by using the same tactic.
CraigsList makes much of its money from charging businesses to place Classifieds ads in categories such as jobs and autos. They have a Robin Hood approach built on their belief that businesses are greedy and should be punished. If your newspaper allows businesses to place basic text classifieds for free, same as an individual, market share will surpass CraigsList significantly. My guess is this is a service CraigsList is unwilling to offer because it doesn’t like businesses, and it’s the company’s main source of revenue.
But that’s just a first step to disrupting CraigsList.
Wishful thinkers in the newspaper industry say we can all make money from free classifieds if we gather a lot of upsells together. Maybe for a short time that would generate some revenue. But the moment someone starts giving away the upsells for free, we’re in the same predicament. That’s why we should do it first.
Expanded text? Free. Multiple photos? Free. Video? Free.
Anything you can think of that we’d call an upsell must be redefined as a free service for our readers. We must commit ourselves to the principle that we don’t charge our readers, we charge our advertisers. Businesses are advertisers. Individuals are just trying to socially network.
When these services prove popular with users, CraigsList will provide them, as well. Problem is they can’t afford to offer expensive services such as video without selling ads around the Classifieds content, which they are ideologically opposed to doing. Luckily, we’re not.
When CraigsList eventually matches our ante and begins eating away at its own profits, your newspaper still has the upsell they can never offer: the printed page. Classifieds delivered to your neighbor’s front door? Free.
Here’s another free upsell Craigslist can’t offer.
It is the vast minority of readers who read the classifieds section from front to back. We all know readers pick up the Classifieds section for the utility. A reader is looking for a washing machine and looks for that category. But something else is happening online. “Top ads” programs are wildly successful. Here’s how they work. Classifieds run not within the borders of any Classifieds section; instead, they run near related content, where the casual shopper is more likely to find them.
If newspapers mimic that placement in print, it’s an upsell no one else can give away for free. It is a competitive advantage unique to newspapers.
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Bottomline is that CraigsList is not invincible. To the contrary, CraigsList is made vulnerable by its idealistic approach to business. The goal of newspapers should be not only to survive CraigsList, but to bankrupt them.
The company is made up of 25 extremists whose greatest strength thus far has been their zealous commitment to an anti-business strategy. By offering free upsells, we must increase the cost of doing business so much that selling advertising around classifieds is the only way to stay in the black. CraigsList will not take that step, and they will fold.
Here’s Buckmaster’s excuse for why he refuses to sell banner ads: “It's not something our users have asked us for.”
As we all know, users will never ask him for advertising. But CraigsList doesn’t care.
“There are big advantages to focusing exclusively on user wants and needs as we do, and blocking out everything else. That's one of the ways we keep our staff small and our operations simple."
There are also big disadvantages to such an exclusive focus, and they’re outlined by this series of blog entries.
The window of opportunity for your newspaper to proactively respond to this new competitor is small. CraigsList spokeswoman Susan MacTavish Best is quoted as saying it takes nine to 12 months for a new city to catch on.
Tomorrow's entry: The 7th Step; Beyond CraigsList