Newspaper Classified Ads Functionally Obsolete

Newspaper classified advertising remains a $14 Billion dollar annual business.

However, in 2007 newspapers saw the single largest percentage drop in year over year classified advertising revenue since the Newspaper Association of America began compiling sales data 57 years ago.

From 2006 to 2007 newspaper classified advertising declined 16.5%.

Trulia CEO and co-Founder Pete Flint has produced graphs from the Newspaper Association of America showing quarterly classified expenditures along with their annual percentage change in revenues over a ten year period for three major newspaper classified advertising categories: real estate, recruitment and automotive.

As their charts illustrate, each newspaper classified advertising category’s expenditures appear to have mirrored US economic cycles yet more importantly, they also appear to reflect general media consumption trends.

Newspaper Real Estate Classified Ads

Newspaper Real Estate Classified Ads

Newspaper real estate classified advertising inflated along with the national housing market seeing its expenditures peaking in 2006.

Recruitment Classified Ads

Recruitment Classified Ads

Newspaper classified advertising for recruitment ie. jobs, saw its annual expenditures peak in 2000.

Automotive Classified Ads

Automotive Classified Ads

Expenditures for automotive classified ads peaked in 2002.

None of newspaper classified advertising categories have reached new levels of expenditures since each reached their respective peak.

Coincidentally, these newspaper classified advertising categories – real estate, recruitment and automotive – now produce a fraction of the revenues they once did for publishers -roughly $600 million per quarter.

It would be easy to attribute expenditures on newspaper classifieds to each respective industry’s sales peaks and troughs along with their accompanying economic cycles, but why are the charts for each category continuing to show double digit annual percentage drops in publisher revenues?

Because the graphs also illustrate changes in media consumption habits and how their adoption within a market disrupts then reduces expenditures on newspaper classified advertising along with publisher ad sales.

When a newspaper classified advertising category’s audience moves online for the new time efficiencies online classified advertising provides – both the newspaper publisher and their advertisers pay the price.

When a publisher’s audience segment disappears, so eventually will its advertisers and their money.

The first newspaper classified advertising category to be eviscerated by the internet was recruitment. Recruitment began moving online in earnest in 2000 and went on to became one of the first models to survive and thrive online – ultimately transforming recruitment in the process.

In 2002, automotive marketing began moving online.

eBay Motors has since become the world’s largest car dealer. When was the last time you heard of an individual placing a classified ad in the local paper to sell their car? When was the last time you placed a classified ad to sell your car in your local paper – and then sold it?

The next newspaper classified ad category to disappear?

Real Estate.

The newspaper industry and its Real Estate classified advertising business are now under assault on two fronts – the decline of the national housing market and the ascent of internet home listing information and marketing services like Pete Flint’s Trulia.com

If the newspaper industry’s loss of the two previous categories to internet publishers is any indication of how they will respond to the internet real estate publisher threat, newspaper real estate classified ads will soon become the next classified ad category to become functionally obsolete.

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One Response to “Newspaper Classified Ads Functionally Obsolete”

  1. peteflint Says:

    Thanks for the coverage Tim.
    The links to the original articles for your readers are here:
    http://www.trulia.com/blog/pete_flint/2008/09/getting_out_of_newspaper

    http://www.truliablog.com/2008/09/08/ouch-trends-in-newspapers-and-real-estate-advertising/

    Clearly the real estate classified industry has imploded and the landscape permanently altered. We’re seeing a sensible transition of some of the dollars online buying packages like Trulia Pro http://www.trulia.com/truliapro/ , but lots of the spend has just evaporated.

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