Available to good home: Online classifieds

Share this article:
Real estate Web site Zillow includes a map function where browsers can see listings by neighborhood
Real estate Web site Zillow includes a map function where browsers can see listings by neighborhood

Real estate Web site Zillow.com and a group of newspaper companies are expected to roll out a previously announced program this week enabling local advertis­ers that buy ads with the newspapers to also place their listings on Zillow. News­papers participating in the Zillow deal will also be able to use Zillow's real estate content on their own sites.

Despite the relative maturity of the online classifieds space, this news, and sev­eral other recent announcements, seems to indicate there are still opportunities to be had in the sector. New classifieds offerings are also in the works from Cars.com and Walmart.com.

The online classifieds market is broken into four categories — real estate, auto­motive, employment and general mer­chandise — with the incumbents in each looking for better solutions.

“Right now there is no clear break­through winner” in online classifieds, says Barry Parr, media analyst at Jupiter Research. The stakes are huge as the mar­ket transitions from many local players to one or two national players in each category, he continues.

Better platforms could potentially jump­start sales. In 2007, sales for online classi­fieds totaled $3.3 billion, compared to $3 billion in 2006, according to the Interactive Advertising Bureau. However, in 2006, classifieds had an 18% share of the online advertising marketplace and in 2007, it had only a 16% share. The top five online classifieds sites for the month of May, according to ComScore Media Metrix, were Craigslist, Dominion Enterprises, AutoTrader, Cars.com and Kijiji.

But newspapers have been hit hard by the growth of online classifieds. According to the Newspaper Association of America, print classified revenue dropped almost 25% in the first quarter of 2008 to a total of $2.5 billion. It was the largest quarterly decline for the category since 1971.

“Newspapers missed the boat for true innovation in online classifieds in the first wave,” says Sarah Rotman Epps, an analyst at Forrester Research. Now, she posits that papers are trying to reclaim what they have lost by partnering with classifieds sites in a particular vertical to become local ad networks for them.

More newspapers are also realizing that they need more of an audience-focused model. Part of what's driving this is the shift to Web 2.0, which provides the ability to quickly and cheaply syndicate content and function. The Washington Post, for exam­ple, recently launched a widget that lets Washington metro area apartment hunters search for homes based on price, number of bedrooms or proximity to a Metro sta­tion. The widget is exclusively sponsored by a local real estate company.

“Newspapers need to go out, find their audience and serve ads wherever they are,” Rotman Epps says.

Automotive has been a relatively stable category, yet one where Cars.com thinks there is still opportunity, says Sharon Knit­ter, senior director of consumer products at Cars.com. The company's research indi­cates 73% of first-time sellers choose a free site to list their car and 30% of all cars sold either offline or online go through a private party. Cars.com's new Freebo site targets individuals looking to buy a car from a private party. It includes search functional­ity specifically geared toward buying a car, as well as fraud protection.

“In online classifieds, vertical channels are much more appropriate for most peo­ple,” Knitter says. “Having functionality associated with a particular vertical is very efficient for the customer and provides a better overall experience.”

Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Digital Marketing

Follow us on Twitter @dmnews

Latest Jobs:

Featured Listings