Slide1 : Dan Pacheco
Senior Product Manager
The Bakersfield Californian Goodbye, Classifieds. Hello, Community!
Overview : Overview Introduction
My Background & perspective
Fun activity: let’s sell on Craigslist!
The changing marketplace
The trend from print to online communities
A close look at the big competitors
The Bakersfield Californian’s Initiatives
Bakotopia.com: goals and learning so far
Online, self-serve Classifieds
Bakersfield Listing Service
SMS
Wrap-up
Let’s check back on Craigslist!
Q&A
My Background : My Background My background
4 years in news, both print & online
I used to be a feature writer who considered advertising an unfortunate but necessary evil. I got over that delusion years ago!
6 years in online community
Strong focus on consumer product development and marketing
Focused equally on community management and “monetizing” communities.
Only 6 months thinking about Classifieds!
Takeaway: I know a lot about consumers and online communities. You most likely know more than me about the traditional Classifieds business. It will take people like me and you working together to ensure that newspaper companies are relevant in the future. 1. Intro
My Background : My Background Significant online community experience
Have participated in, created or worked on many community initiatives over the last 20 years, including:
Early online community participant:
On “BBS” bulletin board systems in the mid-1980s.
Was also active in early Prodigy service.
I grew up with online community.
In last decade, created or managed:
Interact & Talk Central, the first Washington Post online communities
AOL’s People Connection, AOL Chat (nearly 1 billion monthly page views!)
AOL member profiles
AOL Hometown (personal Web pages)
AOL Groups (family and topical interest communities)
AOL’s You’ve Got Pictures: Photo sharing community
Bakotopia.com 1. Intro
The Past : The Past Newspapers used to own the business of connecting buyers and sellers.
“Classifieds verticals” of jobs, merchandise, autos and real estate were the primary marketplace for consumers.
Personal ads & community announcements.
Because there was nothing else better, Classifieds offered real value, and paying by the line made sense.
The value proposition: Helping people of like minds, interests and goals connect. 2. The Changing Marketplace
Today’s Reality : Today’s Reality The Internet is superior to print for all types of communication, and especially in helping people make meaningful connections.
Message boards, chat rooms, Craigslist, EBay and social networking are all about connections.
Most successful communities work because they offer free and open communication. Freedom usually applies to both thought, and wallet! 2. The Changing Marketplace
If we do not provide the same or better value to local members of our physical communities, nationally-based, locally-focused online communities will dominate in our markets. !
Different Products, One Goal : Different Products, One Goal These are all the same thing – people connecting with each other online. 2. The Changing Marketplace
Migration from Print to Online : Migration from Print to Online All aspects of the local marketplace are migrating online, including Classifieds. Pace is impacted by:
How soon the majority of consumers move online and dictate where the bulk of classifieds are placed.
Breadth and swiftness of competition in individual markets and categories
Over time, volume will increase, but revenue and margins will drop.
But self-serve and online drops costs, too!
Our critical challenge: not being left behind as mass market shifts to digital in the next 5-10 years.
2. The Changing Marketplace
What’s at stake? : What’s at stake? Newspapers are in a tough spot
Print Classifieds generate $100 billion worldwide, and $15.8 billion in the U.S. alone.
U.S. newspapers typically make 30-50% of annual revenue from Classifieds.
Blessing: Great revenue that pays for much of what we do!
Curse: What happens if we lose this?
Our Paradox: As the marketplace moves to online communities, charging by the line in print will no longer be competitive. How long this will take is anyone’s guess, but one thing is clear. You can either embrace this trend and experiment with ways to be relevant (probably for less revenue), or you can do nothing and cede any future revenue potential to others. 2. The Changing Marketplace
Jobs, Real Estate and Autos : Jobs, Real Estate and Autos Migration of jobs is well underway
U.S. newspapers have seen their share of recruitment advertising fall from 47% in 1996 to 39% at the end of 2002.
Online services have grown from 1.5% to 18.1% in the same time span.
First Monster.com, followed by Yahoo Jobs and others.
Real estate and automotive have been slower to migrate, due to a smaller number of advertisers.
About 6.1% of real estate ads are now online.
Realtors are starting to do it themselves. Some 90% of MLS listings are available under a new listings-sharing standard known as Internet Data Exchange (IDX). Lets realtors display listings of other brokers on their sites.
An estimated 60% of car buyers use the Internet for research. 2. The Changing Marketplace
Merchandise : Merchandise Much of merchandise is already lost to EBay, Craigslist and similar sites.
2/3 of papers surveyed by Classified Intelligence, LLC reported major to moderate impact on merchandise.
Craigslist is having major impacts in big cities like San Francisco, New York and Los Angeles.
In a recent report, Classifieds Intelligence estimated revenue lost to San Francisco newspapers to be $65 million a year!
Look in your own market for a new trend: local consignment stores that you pay to sell stuff on EBay for you. 2. The Changing Marketplace
Free Print-Online Combo Products : Free Print-Online Combo Products Most markets also have print competitors with good online components.
In Bakersfield, Pennysaver (pennysaverusa.com)
Thrifty Nickel, others elsewhere
Free online ads for private party, small print charge.
But Our Numbers are Going Up! : But Our Numbers are Going Up! Print classified ad revenue may be increasing as we come out of recession, but the recovery is weaker than it has been historically.
Looming danger: real estate boom and increase in jobs advertising is providing a false sense of security.
Advertising IS increasing, just not all in newspapers. Source: New Classified Models, Futureofthenewspaper.com, 2004. 2. The Changing Marketplace
The Worst Excuse Ever! : The Worst Excuse Ever! “EBay is all about private party, which has lower margins. We make more money off commercial customers anyway.’
Dangerous because:
“Private Party” advertising is really community publishing, and it’s where the readership is. For every individual who stops placing classified ads because of a better online site, you also lose a vital member of your community and marketplace.
If you focus on revenue at the expense of readership, your ads will ultimately not work as well for anyone. You could win the revenue battle and lose the war to dominate “mindshare”.
2. The Changing Marketplace
The EBay Steamroller : The EBay Steamroller 25 million items available at any one time.
$2.17 billion sales, $441.8 million in profit.
3.5 million items sold every day ($60,000 per minute).
100,000 sellers earn $2,000 - $10,000 every month.
11,000 new users ever day. 2. The Changing Marketplace Can your paper provide this kind of value to each local seller? Probably not. Q:
What’s so great about EBay? : What’s so great about EBay? EBay is first and foremost a community.
People on EBay often refer to themselves as “EBayers,” and the site cultivates this with regional in-person reunions. Have you ever heard anyone call themselves a “Classifieder”? Why not?
You can tell who you’re doing business with.
On EBay, everyone has a profile, with trust ratings and public comments for both buyers and sellers. You can instantly tell if someone sells great cars, or lemons.
If you don’t do right by people, you don’t sell!
EBay is fast, efficient, effective, fun, and 100% self-serve.
Can you honestly say all of these things about placing Classified ads in your newspaper?
2. The Changing Marketplace
More About EBay : More About EBay Mainstream: In 1999, 55% of sales were of used collectibles. Today, 85% of sales are for “practicals” like cars, computers, baby clothes …
Global: 44% of buyers are from outside U.S.
Bulk listings & automation: EBay makes it easy for “power sellers” to replicate a listing many times, while companies like MarketplacePro automatically handle business behind the scenes.
Affiliate Sales: Sellers increasingly can operate as affiliates for big warehouses like Overstock.com.
2. The Changing Marketplace
EBay is More Than Auctions : EBay is More Than Auctions It now allows fixed-price “buy it now” sales that are growing in popularity. What’s the difference between a fixed-price “auction” and classified ad?
2. The Changing Marketplace
EBay Motors : EBay Motors Last summer eBay Motors sold its 1 millionth car. It has 12 million auto shoppers daily, making it one of the most-trafficked auto sites – on par with Yahoo Autos, AOL Autos, Cars.com, and AutoTrader.com.
2. The Changing Marketplace
Craigslist : Craigslist Locally-targeted, community-based classifieds. Now in 70 U.S. cities and 17 countries.
More popular with young and “young at heart” audiences, but it’s quickly also becoming mainstream.
Profitable from $75 job ads in San Francisco alone! Recently added $25 charge for New York and Los Angeles. Low overhead – only 17 employees!
Competes head to head with newspapers in San Francisco. Estimated to have cost them $65 million in annual Classified revenue.
EBay now owns 25% of Craigslist. 2. The Changing Marketplace
LiveDeal : LiveDeal Launched in 2004 by former EBay employees.
All listings are free!
To search, you must provide a zip code. Search results are ranked by distance away from you. (Why isn’t EBay doing this?)
Sellers can optionally offer online commerce for a service charge. 2. The Changing Marketplace
Classified Aggregators : Classified Aggregators Newspapers have been aggregating online Classifieds within networks of papers for a while (e.g. Careerbuilder.com)
Other sites now do the same, but across all types of Classified sites. A couple new ones to watch:
Oodle.com: Aggregates all verticals
Launched this year.
Currently only in Chicago, Dallas & Philadelphia
Indeed.com
Focuses on jobs.
Aggregates from multiple job sites and company sites.
LinkedIn
Pulls from company sites and ties into a “social network”
2. The Changing Marketplace
Social Networks : Social Networks Offer new ways to buy, sell, connect with people who know your friends. Mirrors the way many people already find jobs, apartments by word of mouth. There are many demographically-targeted sites:
MySpace.com, Friendster.com cater to youth (focused on music and dating).
Monster Networking, Ryze, LinkedIn focus on jobs.
Tribe.net targets 20-30-somethings & intellectuals. 2. The Changing Marketplace
Social networking and content : Social networking and content New sites are emerging that mix social nets with community publishing. People meet based on shared interests or goals that they publish.
WHY SHOULD YOU CARE? Whenever online communities form, commerce communities always develop organically. Community and commerce are both about connections! Flickr – newly part of Yahoo (oh, great!) 43things.com – Amazon is a major investor. (Ugh!) Keep an eye on these two: 2. The Changing Marketplace
Freecycle & misc. communities : Freecycle & misc. communities
Most cities have a Freecycle group in Yahoo Groups where people trade stuff for free. It’s a direct mindshare threat to newspapers.
Over 2,500 Freecycle groups and 1 million members across the U.S.
Search Yahoo Groups for your city name and you will find many other smilar types of communities.
This stuff is not new – it’s been going on in message boards practically since they were invented. What IS new is the Freecycle organization and brand. 2. The Changing Marketplace
Slide26 : Marketplace Rules of Behavior If you excel at meeting these, you will retain long-term audience market share.
The 8 Marketplace Rules of Behavior : All people, including those buying and selling stuff, generally have the same expectations when they’re doing business with each other:
Everyone wants to …
Be where the action is.
Have fun while they’re doing business.
Buyers want to …
Find what they’re looking for right away. Get in, get out.
Know who they’re buying from, and whether or not they’re trustworthy.
See what they’re going to buy.
Sellers want to …
Have space to describe their stuff for sale.
Move inventory quickly with as little hassle as possible.
Make a high profit margin.
The 8 Marketplace Rules of Behavior 2. The Changing Marketplace
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #1. Everyone wants to be where the action is. 2. The Changing Marketplace Free or cheap = volume.
Volume = content.
Content = more usage “Man, everyone is selling their stuff here! I’d better start, too.”
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #2. The “fun factor”: Mixing business with pleasure. 2. The Changing Marketplace “Will I win???” “This site has a sense of humor” “There are some cool people on Craigslist”
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #3: Everyone wants to find what they’re looking for right away. 2. The Changing Marketplace Craigslist: one click or search to see content. Easy! Typical newspaper Classifieds site: way too many options. Where do I start??? Where print hurts us big-time:
Ads composed for print are written in “haiku” that does not work for search.
e.g. Who’s going to search for “2BR 2BA Split”? They’ll search “two bedroom” and get nothing.
The solution: get users to provide separate online text whenever they place a print ad, and set the online limit at a ratio of print to avoid abuse.
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #3 continued … 2. The Changing Marketplace Future approach of Bakersfield Californian Classifieds: simple search and browse, 1-click to see content. EASY!
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #4: Buyers want to know who they’re buying from, and whether or not they can trust the seller. 2. The Changing Marketplace Tribe.net service recommendations EBay seller ratings & comments
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #5: Buyers want to see what they’re going to buy. 2. The Changing Marketplace Something new we’re trying: “Web Plus” numbers in print that reference photos online. User types number into search form to see full online listing with photos.
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rules #6: Sellers want space to be able to adequately describe their stuff for sale. Online ad made first for print
“I can’t breathe!”
“These guys are gouging me.”
Seller: “Ahhh, space!!!”
Buyer: “What a great story! I simply must have that chair!”
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rules #7: Sellers want to move inventory quickly with no hassle. 2. The Changing Marketplace Print Classifieds Experience
Wait a day or more for ad to go in print and Web, with phone number publicized to the entire world.
Seller gets 30 disruptive phone calls in two days. Calgon, take me away!!!
A week later, he’s still getting calls! “We sold it. Thanks.” Click.
A telemarketer calls a month later. How did they get the number? From the ad!
Bakotopia & Craigslist Experience
Ad goes on Web immediately, and can be completely anonymous.
Seller gets 30 e-mails.
Seller chooses which e-mails to respond to, on his own time.
Which experience would you prefer? So would your customers.
The 8 Marketplace Rules of Behavior : The 8 Marketplace Rules of Behavior Rule #8: Sellers want to make a high profit margin 2. The Changing Marketplace Newspaper, print or web or both
Pick up the phone, or if I’m lucky maybe go to a Web site.
Pay $30 for a 5-line ad with a photo and border.
Balance sheet:
Selling price: $100
Marketing cost: -$30
Total Profit: $70
Bakotopia & Craigslist
Go to web site.
Post my stuff.
Sell my stuff.
Balance sheet:
Selling price: $100
Marketing cost: 0
Total Profit: $100
Scenario: I’m selling a couch for $100. These are my choices:
How do we make money tomorrow? : How do we make money tomorrow? Caveat: This should not be your driving factor, since a marketplace of nobody will never have a chance of making money. Put consumer “mindshare” first!
Some of our ideas:
Charge an optional service fee for online transactions (LiveDeal model).
Promote online as primary place to list stuff, and offer shorter print “promotions” for a fee. Print becomes the “best of” rollup of the larger online marketplace.
Charge for SMS delivery of targeted content.
Charge realtors to provide more information from sign through SMS code.
Charge for multiple photos, or for enhanced presentations of photos (such as streaming slideshow or MP3 voiceover upload with photo).
Create special categories that require membership to view (Monster.com social network model).
We don’t have all the answers, but we know that by doing nothing, we are giving our market away so that someone else will. 2. The Changing Marketplace
Other Advice : Other Advice Organize yourself for the future. If you believe that online is the future, then manage your staff that way.
Make sure people on your staff have responsibility for proactively guiding the print-to-online transition of the business instead of feeling victimized by it.
Provide a common experience for all Classifieds, but manage each vertical as a separate business
Jobs are totally different from autos, and many online competitors are taking us on one niche at a time.
Monster.com doesn’t compete in the merchandise space.
Identify local online competitors and measure market share.
Count the ads, advertisers, functionality and rates.
Know how your offering stacks up.
Take advantage of the web's ability to personalize and push content (RSS, SMS alerts, etc) 2. The Changing Marketplace
New Products Group Focus : New Products Group Focus Started in 2004 to create new multi-platform information products in Bakersfield.
Strong focus on products that meet the needs of specific audiences that the core newspaper has underserved, including:
Suburban families in growing communities
Northwestvoice.com and print publication
Young people ages 18-35
Bakotopia.com
Cell phone “SMS” text messaging features
Hispanics
El Californiano
More coming soon!
3. Bakersfield Californian Initiatives
Bakotopia.com : Bakotopia.com Pronounced “Bake-oh-toh-pee-ah”
Launched in February 2005. It’s still just a baby!
Targets 18-35 Bakersfield youth
Initial focus on Classifieds because:
Lots to lose tomorrow if we don’t have an answer for young people today.
We knew Craigslist was in Fresno, so Bako was not far behind.
We knew online community was big with youth. If we could get Classifieds right, we knew we could nail community, too. 3. Bakersfield Californian Initiatives Bulit “on the cheap” and intentionally not marketed in the Californian
Based on the free Noah’s Classifieds product.
We could get higher usage by promoting from the Californian, but we don’t do that because we’re specifically targeting people who don’t read it. This is about growing marketshare among an “at risk” audience.
Bakotopia, Continued … : Bakotopia, Continued … Good early growth!
We consistently see 50% increase in unique visitors each month.
We’re doing well in the categories we care most about
Events: Compared to Bakersfield Craigslist, we own this category. Dozens of local bands promoting their gigs, including the two hottest bands in town (“Mento Buru” and “The Filthies”).
Merchandise: The kind of stuff you would expect “young and hungry” people to sell, including electric guitars, old cars, used furniture. Personals: High quality & highly local compared to Craigslist. Amazingly, we have no “adult” pictures yet, while Craigslist is crawling with them.
(Side note: have you looked at the personals in your city’s Craigslist?)
Miscellaneous: Fun postings we’ve seen:
A real-life “ghost-buster” for hire in Bako
A home-made guitar
A humongous Star Wars action figure collection 3. Bakersfield Californian Initiatives
Dan’s Favorite Listing So Far : Dan’s Favorite Listing So Far 3. Bakersfield Californian Initiatives
Other Bakotopia Initiatives : Other Bakotopia Initiatives The “BakoBlog”
Published for free by local bloggers we approached. They’re our biggest fans.
Posts get decent traffic because bloggers promote posts from their own blogs.
“Seen on the Scene”:
Photographer takes pictures at local clubs and gives cards to people with the URL so they can check out their pics (based on Spotted from the Augusta Chronicle)
Collaboration with “The Blackboard”
Working closely with a local, home-grown alt-monthly. We give them a category where people can post stuff, they print the best content (chosen by them) each issue.
We may power online classified submission for them in the future. Appearing in The Blackboard would be for a fee. 3. Bakersfield Californian Initiatives
“We Can’t Afford a Bakotopia” : “We Can’t Afford a Bakotopia” Yes, You Can!
No matter who you are or how big you are, you can do something like Bakotopia very inexpensively. Anyone in your community can – and that’s why you should consider experimenting now.
How did we do it?
First, make sure you have support from the top. We’re lucky that Ginger Moorhouse and Richard Beene are open to experimentation!
Sign for a Web hosting account for $12/month.
Make sure it has PHP, MySQL, CPanel and “Fantastico Autoinstaller.”
Install the free Noah’s Classifieds in one click!
Pay someone $5,000 - $10,000 to customize, and you’re done!
(Oh yeah, and someone passionate to manage and promote)
3. Bakersfield Californian Initiatives
Self-Serve Classifieds : Self-Serve Classifieds New web self-serve through vendor FutureofNews launched last week!
Need self-serve? FutureofNews has great functionality and is very affordable!
Consumers can create their own ads to appear in print, or just on the web. Ad prevew is exact.
Can upload a photo for print, and include extra text and pictures for the web as an upsell.
Free web ads for merchandise to better compete with craigslist, EBay etc. 3. Bakersfield Californian Initiatives
Bakersfield Listing Service : Bakersfield Listing Service Late last year, local realtors formed the “Bakersfield Listing Service” (BLS) as an alternative to MLS
Likely just a local anomoly for our market, but maybe not!
Bakersfield.com is the exclusive home for all BLS listings.
Traffic in BLS area is up 20% in the first 30 days.
Lesson: Convenience matters for both consumers, and for realtors. Everything is in one place. 3. Bakersfield Californian Initiatives
Cell Phone SMS Alerts : Cell Phone SMS Alerts Classified and News alerts for cell phone text messaging (SMS) launched last month.
Objective is to provide relevant information to people on cell phones, especially young people.
Users can receive all alerts for a category, or only alerts from a category that contain certain text (e.g. “2BR on H Street” in real estate listings).
Realtors have already covered development costs, making this profitable from the start! 3. Bakersfield Californian Initiatives
Contact Info & Copyright : Contact Info & Copyright Dan’s Web site & blog:
www.futureforecast.com
Copyright
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