To understand online classifieds and how they work, let's begin with a visit to traditional newspaper ads and study how they get the job done.

In every local newspaper there is a real estate section and classifieds. Of 1000 papers, 650 publish a special resale section or homes magazine. The reason is that the real estate industry is the third largest single purchaser of newspaper advertising, next to employment and retail. It is also the engine that drives 24% of the gross national product, including much of the retail advertising that is sold. Think furniture, home improvement, builders, etc. For that reason, most newspapers devote an entirely separate section to residential real estate for the benefit of advertisers and consumers.

Open the real estate section of your local paper and observe. There are ads for agents, mortgage brokers, title companies, movers, top producers, attorneys, builders and more. These are the display ads, which can include graphics and editorial copy. The largest display ads are purchased by the community's top brokers, and feature their latest home listings and solds.

Then there is the classified ads section accompanying the real estate section or set apart in a broad classified section. Classifieds have no editorial accompaniment - they are the shorthand of advertising. At $25 to $35 a week for 14 words or less, or whatever your local paper charges, classifieds are written to appeal to the very motivated, targeted buyer.

Why Newspaper Classifieds Are Joining the Migration

Knowing that classifieds draw targeted consumers, the Web and ISP portals offered free classifieds long before newspapers thought of putting their content and their classifieds online. They were the first to figure out what grabs eyeballs -classifieds and home listings.

The online portals also had another advantage - traffic. With over 19 million subscribers, AOL is the single largest port of entry to proprietary content as well as to the Internet. Yahoo!, the Internet's largest search engine and portal, offers classifieds at the metropolitan level, complete with mapping.

The online portals also took presentation to a new level. Homes are showcased with unlimited copy and photos, rendering cost per word meaningless. The free ads, even in the largest metropolitan areas, aren't nearly as prolific as their newspaper counterparts. The question is, will a consumer go to a local paper or to a large search engine for a targeted quest such as finding a home? Without published data, it is difficult to know. No site yet has published sell-through results of either their ads, banner ads, or any other form of paid or free positioning. They see sell-through as the job of the individual or company placing the ad. No ad, in other words, can guarantee results.

Grudgingly, the newspaper industry also began to put its classifieds online, increasing value to the ad purchasers who would now have exposure in the broadsheets as well as online. This concession also allowed consumers to develop their favorite methods of searching. Those who like to use the Internet use online classifieds; others can leaf through the classifieds over a cup of joe.

As far as print and virtual print media goes, newspapers still grab the most readers when it comes to serving information to home buying consumers. According to a Newspaper Association of America(tm)survey called "Newspapers: The Foundation of a Successful Home Search," 55 percent of home buyers used a newspaper during the buying process, 34 percent used home magazines and 19 percent surfed the Web.

If these figures seem a little too self-serving for the NAA, a Realtor.com/NAR study performed four months earlier showed similar results. "Realtors and the Internet," designed to evaluate the impact of on-line technologies on the real estate industry, and found that 23 percent of all potential home buyers surveyed in May of this year searched for a home on-line, and that 58 percent of all potential buyers surveyed believe on-line searching is extremely valuable or very valuable.

NAR president Sharon A. Millett said an earlier NAR survey in 1995 showed only two percent of home buyers were using the Internet as a search tool. "This amounts to a twelve-fold increase in on-line home searching during the last four years, and mushrooming traffic at web sites such as REALTOR.COM bare this out," she said.

If half the people under the age of 35 use the Internet to find a home, and the growth of online searches is twelve-fold every five years, its easy to see why newspapers are putting their classifieds to the Internet.

Today, 85% of local newspapers post their classifieds in an online edition, but that still may not be enough to get your listings and services the exposure you want. The best strategy therefore is to continue to place ads with your local newspapertake as well as take advantage of both the free or low-cost Internet classifieds at the most popular portals.

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Published: December 9, 1999

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