A big job: fixing classifieds

For years, newspapers thought Monster was the enemy. And for a while, it was. After enough people in the business had their “Holy crap, Monster’s stealing our business!” moment, Careerbuilder was created.

It was a classic defensive move: stop the outflow, then recover the share. And it worked. Careerbuilder and Yahoo’s newspaper-centric HotJobs both are in the game with Monster, often beating it. Mission Accomplished.

So, why then is this chart still going in the wrong direction? Why is the money-pump of recruitment advertising sucking air?

It’s Craig. Starting around 2000, Craigslist went national with a largely free ad model. Over time, businesses discovered they could fill their open positions with an ad on Craigslist. Money that once was spent on a newspaper ad or a Monster or Careerbuilder ad simply was not spent. Hundreds of dollars per ad did not change hands. And yet the position was filled.

How do you compete against that?

Like the Grinch standing atop Mount Crumpit believing Christmas would never come without packages, boxes or bags, newspapers scoffed at the Craigslist model: “It can’t possibly work”

Well, it does. Mix in vertical job sites that do charge, but at a much lower rate than newspapers and online megasites, and you’ve got the makings of the swoon the newspaper classified business is currently in.

And can you really blame the hiring manager, who fills a job without spending a dollar in a newspaper or on Careerbuilder, for never spending there again? Especially in an jobs economy that’s becoming less of an applicant’s market with each passing day?

This should not be news to anyone in or out of the newspaper classified business. Yet the slippage continues, accelerating even in the past year. We shouldn’t need to say this almost a decade into the 21st century, but we do: We need to change. Fast.

If I had P&L responsibility for print classifieds, these are some options I’d consider to shore up one critical category, recruitment, still the largest slice of the classified pie:

1. Get out of print. The “Want Ads” of previous generations worked well because the classified section was a reliable database of most available positions. A printed database, yes, but for most people well into the end of the 20th century, a printed database was the most accessible database. Today, however, when huge swaths of our population are online with devices both tethered and wireless, a printed database is a museum piece. Convert to 100% digital classifieds now and use the paper to promote the heck out of the online product. This will cost in the short run, but so will doing nothing.

2. Create a weekly tabloid which aggregates the best local classifieds and distribute it along with the paper on Sunday, then free on Monday. This may simply be forestalling the inevitable, but there’s also the possibility that it could pump new life into the old beast, rebuilding the teeming marketplace of old through sheer volume:

  • All 3-4 line ads are free if users create them online. If a user wants the traditional phone support, there’s a $20 fee for the service.
  • Offer aggressively-priced upsells for both print and online.
  • Aggregate classified content from other sources, either through partnerships or straight-up content-scraping.
  • Surround the ad content with original editorial content. Give the publication a voice and an attitude to encourage readership by more than just the hard-core jobseeker.
  • Extend your reach outside of your paying newspaper customers, but still give them the early look by holding off the free edition for one day.
  • If your newspaper owns community papers or other niche publications, use them to distribute the new classified tab.

(Note: a variation on this option recently launched at The Baltimore Sun. I had a small hand in the development of the idea. The Sun’s product as launched does not contain free or aggregated ads, a critical difference to my mind.)

3. Be your niche. Take a look at the Sunday jobs section – a great deal of the jobs there are blue collar and entry-level. Under the current model of the newspaper employment section as an omnibus job source, this is a bad thing. But what if we embraced the reality? Move all of the professional listings to online and focus the printed product on helping employers fill the manufacturing and service jobs in your market. Publish it in English and Spanish to better meet the needs of the workforce. Distribute it outside of the traditional newspaper rack system, employing hawkers at major work sites and home improvement centers, for example.

4. Charge for leads. This is Lucas Grindley’s idea, and I think it has a lot of merit. It starts with free online and in-print ads. Then it gets interesting:

After those ads are printed for free in the newspaper and posted online for free, numerous people will obviously respond wanting to apply for the job or buy the merchandise.

When that happens, notify the job poster or car seller that someone has responded. If they’d like to view the response, they’ll have to pay a fee.

That’s right. Charge them to view responses.

To encourage usage, maybe give away the first response for free. Then charge per response after that.

These are just a few ideas. I imagine Steve Outing at Reinventing Classifieds will be assembling quite a few good ideas about fixing classifieds now that he’s created a $500 bounty for the best idea.

But we’ve got to do something soon – that trend line’s moving far too quickly toward zero.

What can be done to stop the free-fall in classifieds?

Steve Outing, of E&P and, more recently, Reinventing Classifieds, is asking for your help, and he’s offering $500 as an incentive:

WHAT CAN THE NEWSPAPER INDUSTRY DO TO 1) BRING BACK CLASSIFIEDS CUSTOMERS (BUYERS AND SELLERS) THAT HAVE BEEN LOST TO ONLINE COMPETITORS, 2) ATTRACT NEW CUSTOMERS WHO HAVE NOT USED NEWSPAPER CLASSIFIEDS BEFORE, AND 3) RETAIN ITS REMAINING CLASSIFIEDS CUSTOMERS?

Good questions.

But to back up a little, Step One in solving any crisis it to define the crisis. We’ve all seen the numbers, watched them slip year-over-year. But sometimes the numbers aren’t enough. You need a picture. Here’s what the biggest slice of the classified picture, help-wanted, looks like in 2008:

(2008 estimated based on first-half performance. All data from NAA.)

You don’t have to be a draftsman or Photoshop guru to visualize that trend line’s forward direction if nothing changes. It hits zero in mid-2010.

Zero.

You can look at the chart two ways. The first, is that we’ve got $2.6 billion at risk that we have to do everything in our power to save. That’s been the approach of the newspaper business so far. We said the same thing when we had $5.1 billion at risk. And $4.7 billion. And $3.8 billion. And still the slide continues.

Or, we could take another approach. We could say that in 2011 dollars, we have nothing at risk. Because if we don’t do something dramatic, that’s exactly what we’ll have. Nothing.

Next: a modest proposal to help stem the tide and relieve Steve of his $500.

Hint for where this is going: Look at the chart above and remember that Craig Newmark started his expansion in 2000.

The Glengarry Glen Ross revenue solution

On the subject of finding new revenue streams, Lucas Grindley has an interesting take that argues the old model of charging advertisers up-front for space has it backwards:

Generating an audience first requires attracting advertisers. It’s NOT a chicken and egg situation. Luring advertisers is more important than users.

To get on the advertiser’s list, posting an ad absolutely must be free. Otherwise, you’re asking the employer to take a risk and abandon one of their old standbys.

If it’s free to post an ad, then all you have to do next is convince the potential advertiser it’s worth their time to fill out an online form. Here’s a sure-fire way to persuade them.

Print the ad.

That’s right. After completing the online form, the reader’s ad will appear in the newspaper for free.

It’s really not as odd as it sounds. To protect their market share, newspapers around the country already give readers free ads for merchandise under a certain dollar amount. But I’m saying let all ads appear in print for free.

You can read the whole piece here. Stay until the end. It’s worth it.