ORLANDO, Fla. (February 29) ñ Line by line and column-inch by column-inch, broadcasters are beginning to chisel away at newspapersí dominant position in classified advertising, a new report showed Sunday.
ìItís a real opportunity for broadcasters, and a real threat to newspapers,î said Peter M. Zollman, founding principal of Classified Intelligence, L.L.C.
Broadcasters in the United States are making inroads into the classified advertising business, taking a growing share of a $16 billion market that once was the exclusive domain of newspapers. The report, ìBroadcasters and classifieds: the new revenue stream,î identifies several markets where broadcasters offer more jobs, homes or cars online than their daily newspaper counterparts, and other markets where broadcasters are generating more than $1 million annually in classified ads. One television group expects to bring in at least $5 million annually from its Web sites within a few years.
ìThe growth of classified advertising on-air and online by broadcasters, and the surge in dot-com classifieds, means newspapers will have to fight harder and harder to hold on to that linchpin of their revenue,î said Zollman. ìJust three years ago, some newspapers garnered 50 percent of their advertising revenue with classifieds. Now, however, most have seen major drop-offs, due to the economy and erosion from aggressive new competitors.î
The 103-page report is the product of more than one year of research by the Florida-based consulting group, which works with media companies including Tribune Co. (NYSE: TRB), the New York Times Co. (NYSE: NYT), the Washington Post Co. (NYSE: WPO) and Hearst Newspapers, and dot-coms such as CareerBuilder.com and AutoTrader.com.
Examples from the report:
Liberty Corp., which operates 15 network-affiliated TV stations, is generating an estimated 3 percent of its total local revenue through classifieds, and is working extensively with auto dealers, real estate agents and employers in various markets. It expects to exceed $5 million in online revenue within five years.
In two small markets, broadcast-affiliated RegionalHelpWanted.com sites generate more than $1 million a year in revenue. The company, founded in 1999, is on track to generate an estimated $12 million in revenue in 2004.
A Minneapolis-based company working with broadcasters has developed automotive Web sites in 20 markets in 16 states. One site generated nearly $1 million in online income and helped a TV station generate more than $1 million in add-on sales to local auto dealers.
ìWhile ëmore listingsí donít immediately translate into ëmore revenue,í consumers naturally gravitate to the marketplace that provides them the most and best information,î Zollman said. ìRight now, this is having a significant impact in just a few markets ñ but during the next three years, the trickle is likely to become a stream, then a river and then a flood.î
A free preview of the $395 report is available for download at Classifiedintelligence.com, or through e-mail requests to info@classifiedintelligence.com . Reporters may request copies for coverage through an e-mail to info@classifiedintelligence.com . Zollman is available for media interviews at (407) 788-2780 or (321) 356-3182.
Broadcasters winning growing share of classified dollars
New report shows