Media is not a constant, unchanging thing; it is something that is ever-evolving with existing vendors while new vendors enter the scene. What advertisers and media must do alike is figure out how each platform is unique and communicate that to the end user- the customer. MediaPost recently reported about how the free online classifieds site Craigslist has affected local newspapers’ own classified revenues.
A new study, “Responses to Entry in Multi-Sided markets: The Impact of Craigslist on Local Newspapers,” was created by the professors at NYU Stern School of business and Harvard Business School. Results showed that local newspapers reported a $5 billion loss in classified ad revenue between the years 2000 – 2007 when Craigslist came into the marketplace.
Observations of the papers that heavily relied on classified ad sales showed a chain reaction based off of diminishing revenues. These papers attempted to increase subscription prices to make up for the lack of classified, which in turn lead to lower subscribers. This led the papers to really rely on display ad rates.
While this can be taken as a strike towards local newspapers, it can really be the starting ground to refocus on what consumers want from a news product. Advertisers will have to work with news vendors to come up with cost effective and mutually advantageous opportunities to reach target audiences.