An interesting dichotomy has developed in the traditional media industry: TV-powered conglomerates like Viacom (VIAB) and CBS (CBS) are saying they see no impact from the recession. Newspaper companies like McClatchy (MNI) and The New York Times (NYT), meanwhile, are getting demolished.
Some crazy people still argue that the newspaper industry’s problems are just cyclical, that when the economy comes back, newspaper advertising will, too. The relative strength of other traditional media (relative) belies this, as does commmon sense. The weak economy is obviously playing some role–newspaper display advertising appears to have been the first line item cut (understandably)–and when the economy recovers, some of this may come back. For a while.
But the newspaper industry’s real problem, of course, is that its primary product–a pile of paper delivered to your door–is obsolete. And one major revenue stream that paid for that pile is well on its way to being gone for good: Classifieds.
Where has classified advertising gone? Different places:
- Monster, HotJobs, TheLadders
- Match.com, JDate, Plentyoffish
- REALTOR.com and a thousand real-estate web sites
- And mostly to…craigslist.
As you listen to your favourite newspaper company management bemoan the weak economy and real-estate market and discuss the progress made in another round of cost-cutting, consider the chart below, courtesy of Hitwise. Except for the small amount of classified revenue newspaper companies can manage to transfer to their web sites, this one-time cash cow is g-o-i-n-g t-o z-e-r-o. And so are the stocks of newspaper companies who take too much longer to figure that out.
Heather Hopkins of Hitwise explains:
Craigslist traffic just keeps climbing. Year on year last week, share of US visits to Craigslist.org were up 93%. And it’s not just traffic to the main Craigslist page, share of US Internet visits to the Hitwise Classifieds category, which is dominated by Craigslist properties, grew 137% year on year last week. (We track each city separately, so for example the San Francisco, Sacramento, Boston and New York Craigslists are all counted separately). Craigslist.org ranked #23 last week based on share of US Internet visits up from #25 a month ago, #29 three months ago and #39 a year ago.
What accounts for the growth?
The answer is in part – increased awareness of Craigslist, as indicated by an increase in searches for the service. The search term “craigslist” was the fourth highest volume search term last week, based on share of US Internet searches, beat out only by “myspace”, “ebay” and “myspace.com”. The search term accounted for one in every 357 queries last week. Searches for “craigslist” overtook searches for “youtube” in September and for “mapquest” in July.
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