The free ads market - publisher opportunity or threat?

Julian Smith | March 31, 2006, 05:42 AM

In my recently published report looking into the online classified marketplace in Europe (clients click here) I suggested that the emerging free online classifieds ad market, as spawned by the likes of Craigslist, would be a threat to traditional purveyors of classifieds (ie local and regional newspapers) and to investment in the classifieds marketplace in general as it does away with the need for local advertisers to pay to post ad listings. As these sites, coupled with the pure-play classifieds marketplace specialists, seriously impact the revenue streams of traditional classified providers it is good to see that not all are taking it lying down!

In a classic example of turning threat into opportunity, the UK Trader Media Group, which publishes over 70 magazines and associated websites, is launching their very own local free site called Wooo (we own our own). It seems their business strategy is to build up a significant user base on this site which they can then exploit by cross-selling their extensive portfolio of ad-funded properties, such as autotrader.co.uk. So by giving away free ad listings they still hope indirectly to generate ad revenues elsewhere. It seems the demise of classified revenues could be to the advantage of display formats.