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The big idea for newspaper classifieds: Lead generation

Pretend you are a newspaper that has no classifieds section, facing a crowded playing field. The best way to strategize a classifieds program that will work for modern newspapers is to imagine what you’d do as a newbie to the market.

Well, I don’t have to imagine. That’s exactly where I found myself after taking over the Web site for BostonNOW, a free daily newspaper distributed largely on subways. And the idea that follows is what I developed after being asked to create a program.

Because I’ve pitched this idea to a few large newspapers already, I know the twist – the big innovation – must be saved for the end. Read through the premise and then you’ll have the “ah-ha moment” when it arrives.


FIRST, A NEW MINDSET

The outdated assumption built into most classified strategies is that your site should become the No. 1 Web source in a geographical area. I don’t care about that. Neither do users.

Consider the employment vertical.

As an employer with a limited budget for advertising my job opening, I’m looking for the best three or four places to post an ad. All that matters is whether your site is on the employer’s list, not whether you’re at the top of the list. The same is true for job seekers.

As someone who recently had no job, I can assure you the unemployed will check any site that seems worth our time. My livelihood is at stake, after all! You think I’m going to be lazy and check just one site?

Before planning your new classifieds strategy, first scrap this dumb mindset that the goal is to become the first site any job seeker checks or job poster visits. Just get on their list.


SEEKERS VS. POSTERS

Anxious ad sales people will insist they can’t sell a classified if there’s no audience. The Web people will say they can’t attract an audience if there are no ads.

That’s why so many sites have been attracted to aggregation services such as Oodle. It’s an tact I seriously considered because it creates an instant marketplace. But it’s 100 percent the wrong approach.

If a job poster can get their ad on your site by posting it elsewhere, then that’s what they’ll do. And if users realize (and they will) that your site offers nothing that can’t be found someplace else, then you’re banished from their list.

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


PRICING

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.

Everyone understands the value of having their ad printed in the newspaper. Here’s how I know that.

BostonNOW boasted hundreds of community members creating blogs and posting regular entries. Readers did this despite the admittedly crappy user-experience our blogs offered. In theory, these folks should have been using Blogger.com or something more professional. But they weren’t.

So we asked them: Why are you posting to BostonNOW.com, of all places? The overwhelming majority of respondents (about 80 percent) said they posted to BostonNOW.com because their post might appear in print. Part of the newspaper’s business model was to print entries from bloggers.

The same carrot will work for folks with a classified to post.


HOW TO MAKE MONEY

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.

Hopefully, you’ve just had your “ah-ha moment.”


LEAD-GENERATION IS THE FUTURE

In the new Web-based business models, advertisers pay only for what they use. What started with iTunes letting listeners pay only for the songs they wanted instead of a whole CD has spread to more traditional markets.

Google has based its entire business model not on traditional advertising but on lead-generation. That’s essentially the definition of cost-per-click.

Monster.com already lets advertisers buy leads instead of ads on its site. A small department is tasked with creating new ways to sell what it calls “lead generation” instead of classifieds. They charge advertisers for the number of applicants their site generates instead of per ad.


CRUNCHING THE NUMBERS

I always like to imagine wild success. What would you do if the newspaper was inundated with free ad posts? Is there a point where it’s no longer cost effective to print every ad for free?

There might be. So do what BostonNOW did with blogs.

Boston readers were never guaranteed their post would appear in print. Instead, we said their post had a good chance of being printed. When it was, it became like winning the lottery.

To launch your lead-generation classifieds, print everything you get. As the economics change, be more selective.

Remember this is a marketing gimmick. The goal is to get on employers’ and users’ lists. Trust me, you will. And you’ll do it in a way that CraigsList cannot match. Start putting that printing press to good use.

Comments (7)

Interesting idea, Lucas.

I think the main problem with any pay-per-lead program is the quality of the leads generated.

As a seller, if I paid for a bogus lead I would be pretty upset.

(Example: I'm an employer and I have just paid for a lead from a job candidate who is completely unqualified for the job. If I'm the employer, I want my money back from that bogus lead.)

How do you prevent that sort of thing from happening?

Bravo, Lucas! That's the kind of nontraditional thinking newspapers need to survive and, indeed, thrive.

You're right about the power of print. You mentioned how empowered the Boston bloggers felt when they got their stuff in print, and I've got a video on my blog from one of them — CC Chapman. He's no pajama blogger; he is the founder of a marketing firm (AdvanceGuard). He talks about the thrill he still got seeing his blog in print.

Including bloggers in the paper and in the website would work almost everywhere. I don't know why newspapers are resisting it. Baffles me.

Congrats on your new job! See you at ONA?!

John

Lucas:

I think you're getting a wee bit ahead of yourself with concerns about whether folks will consider these leads to be good quality. With that said, here's how to fix the problem.

Particularly, car advertisers are spoiled and want only qualified leads. You could always offer a premium service in which a person is paid to go through the leads and weed out the bad ones. But here's how to use technology to accomplish a similar level of quality.

When the person applying for the job, or inquiring about the merchandise, fills out the inquiry form ... they should also be asked to rate whether the item they're asking about matches their needs.

So if you are applying for a job, you should be asked how well the job matches what you're looking for. The employer can then use that information, combined with whether you filled out all the neccesary information, to be given a relevancy score for each lead. Then the employer can decide which leads to buy.

Plus, the user can be recommended better and better choices for jobs or merchandise based on their ratings.

Joe:

I think you are on to something here Lucas with the qualified lead concept. This is much better than pay per click and traditional paid classifieds where an advertiser is basically paying a flat rate betting on print circulation for the return on investment. Plus through lead generation presumably the advertiser will obtain more information on their prospects and strategically leverage it. Can't do that with Google Adsense unless you engage with them following a click through. I have two observations to add: 1. is there any guarantee the prospect will take the time and reliably answer the pre-qualifying questions?, e.g., real estate where buyers are often guarded from the start; and 2. perhaps the print component isn't even necessary or can be phased out as I don't see it as the real hook. In business quality leads are worth paying for above all because of the greater opportunity to engage (or not engage) with a quality prospect is what ultimately drives sales. Yes there will be some duds but what stings more, a paid print ad that generates little interest or an assortment of decent leads that at least give you a shot at a range of prospects?

Lucas:

Thanks Joe,

To your first question about how much a lead should be qualified before being put up for sale . . . I don't have all the answers here since I haven't tried things out. My best advice would be to give things a try. Or, let the advertiser decide how much information is required of a lead before the person can submit the form. Each advertiser might have different thresholds.

For the second question about whether the printed version can be eliminated altogether, I have a strong belief. It cannot.

The possibility that the classified could appear in print is the cheese in the mousetrap for potential customers. Without this lure, no one will post jobs or classifieds of any sort. That means there won't be a large enough market of readers to generate leads.

This absolutely must have a print component. Remember that not every ad submitted via the site must run in print, which could lead to high costs of running the program. But just the reasonable probability the advertisers' ad could appear in print will be enough to attract posters.

Heck, once you've got enough free ads, and eyeballs, there might very well be a market for advertisers who will pay to guarantee their ad runs in print. But that guarantee would be an upsell on a short, free ad.

Bart:

Devious as ever, Lucas.

Robyn:

Since you are a (ahem) expert, I want to ask you what is McClatchy's downfall. (I know it has nothing to do with this post but I used to work for a McClatchy paper and since I've left, it has twice cut its workforce 10 percent). Do you think it took on too much when it bought Knight Ridder? Or is the economy? A combination? I'm just curious to see what you think.

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