She is editor and publisher of Interactive Publishing Alert, a bi-weekly newsletter from which this is excerpted.
The current IPA offers detailed descriptions of each of the sites mentioned here plus Q&As with publishers and reviews of other online sites.
Views expressed are not necessarily
those of NewsLink.
Classifieds in Crisis
Can online newspapers
stand their ground against net-saavy
encroachers? O
F COURSE, the newspaper industry
isn't rolling over -- not by a long shot.
The Chicago Tribune
boasts an extensive real estate section
with articles and links to other real-estate
Web sites that serve the Chicago area.
The New York Times
offers enhanced and searchable real estate
listings that allow users to search by
multiple criteria. The Los Angeles Times
has an extensive real estate site and
a large automotive area.
W
ISHING TO BUILD a closer relationship
with local realty organizations, the
Union-Tribune several months ago created
an MLS "hotsheet" that allowed Sandicor
agents to create ads that would run in
Sunday's paper directly from their MLS
systems. Sandicor took a small percentage
of the listing fees.
By Rosalind
Resnick and Melinda Gipson
W
ITH NEWS, SPORTS AND
WEATHER fast becoming commodities
on the Internet, newspapers are waging
another battle -- the battle to protect
their classified ad revenues from encroachment
by net-savvy newcomers.
This battle, while not nearly so
well-publicized as the fight to defend
local news against incursions by Microsoft,
America Online and other technology companies,
is far more critical to newspapers' survival.
Newspapers operate at about a 14
percent profit margin, while classifieds
enjoy a margin of nearly six times that,
according to a recent study by the Newspaper
Association of America. A loss of half
of all classified advertising -- which
could happen in just five years if newspapers
fail to address online and other competition
-- could slash newspapers' operating
profit to 3 percent, the NAA's new "Classifieds
in Crisis" study warns.
In 1995, real estate ads accounted
for $2.5 billion in revenues, most of
which went to newspapers. However, market
forces have been eroding the newspaper
industry's position. Among the key challenges
that newspapers need to address:
National franchises offering TV home
shows, niche home guides and online listings
services all are grabbing a piece of
the pie. National and regional groups
like the National Association of Realtors'
Real Estate Information Network
offer online services of their own, cutting
online newspapers out of the buyer-seller
chain. Not only can online readers quickly
and easily search for homes on the basis
of price, features and location, but
they also can match that with information
on how much money a particular community
spends per school child and the proximity
of shopping, parks and other amenities.
"RIN has run a fear campaign against
the newspapers in many markets, making
us out to be the lion coming over the
mountain," says Mitch Golub, general
manager for interactive services for
the Fort Lauderdale Sun-Sentinel Co.
"They say we're going to put Realtors
out of business by putting ourselves
in the loop between buyers and sellers
and become the marketplace. We'd be out
of our minds to do that because Realtors
are the source of millions of dollars
in advertising."
Rent Net,
a Web-based real estate guide, now boasts
listings for all 50 states. What's more,
the service provides e-mail notification
of newly listed apartments, floor plans,
color photos and location maps. In contrast,
the Boston Globe's
Apartment Guide offers a searchable database
of its extensive New England listings.
But it does not yet include pictures
and layouts similar to the Rent Net offerings.
Yahoo,
the popular Internet directory, reportedly
is planning to roll out an online real
estate classifieds service this summer.
The service would be free and supported
by advertising.
"For those of us in the real estate
industry, it is a great opportunity,"
one California real estate professional
said.
However, Karen Edwards, director
of brand management for Yahoo, declined
to offer public details about the plan,
saying only that the description provided
by sources was "reasonably accurate,
but not 100 percent accurate."
The Fort Lauderdale Sun-Sentinel's
Home Spot
is successfully challenging The National
Association of Realtors' efforts to monopolize
online listings. Home Spot offers a richly
layered, useable product that offers
excellent information to readers. Homebuyers
have made it the online resource of choice
in Broward and Palm Beach Counties.
The Sun-Sentinel worked closely with
local real estate agents and brokerages
to obtain their listings and to spotlight
brokers in its featured homes sections.
The Sun-Sentinel is not charging brokers
to place resale listings but plans to
next year. All other advertising on the
site is paid. The Home Spot is being
syndicated nationally by Interealty,
the real estate solutions company formed
by newspaper publishers Knight-Ridder,
Advance, Cox and Tribune.
Another way to beat the competition
is to join them. That's what the The San Diego Union-Tribune
has done in teaming up with its regional
multiple listings systems provider, Sandicor,
to create Homebuying Net.
As a result, when the Union-Tribune
proposed creating a new product that
married a zoned, tabloid monthly with
a Web site, there was none of the suspicion
that often separates real estate brokers
from their local newspaper publisher.
Monthly listings in the print publication
and the Web site sell for $14 apiece
and are offered as a package.
"We feel strongly that print drives
Net traffic," says Jim Drummond, The
Union-Tribune's electronic publishing
manager. "You can see how, when the tabloid
hits the streets, traffic on the Web
site goes through the roof."
The Virginian-Pilot's Real Estate Web,
created by InfiNet for its flagship Virginian-Pilot
Online, offers a broker-friendly solution
for member newspapers. InfiNet hopes
to syndicate its classifieds program
among InfiNet affiliates and other newspaper
publishers. Some of the systems have
been adapted for use with MLS systems
because, says Chris Kouba, director of
InfiNet's consulting group, "it makes
a lot of sense to work with existing
databases."
At this point, Real Estate Web is
geared toward use by listing agents;
the systems does not yet accommodate
by-owner ads. Besides the Virginian-Pilot,
the system is in place (or soon to be
installed) at Gannett Suburban Newspapers;
the Journal Gazette and the News-Sentinel
of Ft. Wayne, Ind.; the Cedar Rapids
Gazette; the Fayetteville Observer-Times;
The Free Lance-Star of Fredericksburg,
Va.; the Times Leader of Wilkes-Barre,
Pa., and the Pensacola (Fla.) News Journal.
New Century Network, the nationwide
newspaper coalition, also intends to
aggregate newspaper content in the hopes
that a collection of local listings will
draw buyers nationwide. Some smaller
papers aren't waiting for NCN, however.
Ad One
has gathered listings from mid-sized
papers into a database of 10,000 classified
ads.
In deciding how to put their real
estate classifieds online, newspapers
need to ask:
Smaller newspapers, in particular,
need to beware of inadvertently "disenfranchising"
themselves by allowing a classifieds
aggregator to take over the newspaper's
traditional relationship with its readers
and advertisers.
Newspapers worried about losing half
their classifieds revenue shouldn't be
too quick to trade it for a share of
revenue in a medium that has yet to mature.
Newspapers that are serious about
competing in online classifieds are going
to need to re-think their publishing
systems, both online and off. Software
patches that simply pull ads out of back-end
publishing systems may be a necessity
for now, but we believe the sooner a
newspaper moves to database-driven publishing
plantwide, the better able it will be
to protect its editorial and advertising
franchises.
Newspapers that decide to go it alone
had better start reaching for their checkbooks.
While ClassiFACTS, which offers a faxable
classified service to readers of its
client newspapers, is toying with making
a new Web service free to its fax affiliates,
Newcomer Developer's Workshop of Toronto
is putting a six-figure price tag on
its end-to-end software solution.
IPA's view: Change is never
cheap, but, with their profit margins
under attack, newspapers need to act
now to defend their real estate classifieds
while they can still afford it. Papers
that fail to act may quickly find themselves
lost in cyberspace with no way to get
home.