Google Base set to dominate classifieds, says new report

The fledgling Google Base service is the biggest single threat to the international classified advertising industry, according to a new report.

US-based consultancy Classified Intelligence predicts that Google's plans involve offering free basic classified listings to users. The site would then generate revenue by running paid-for display adverts alongside listings, and by offering paid-for upgrades to listings.

The service has the potential to out-perform giants such as eBay and Craigslist because of Google's immense user base. Google Base is a content database that knits together information with Froogle, Google's shopping tool, and Google Local, which provides business listings and directions.

Classified Intelligence illustrates how easily Google could incorporate a classified advertising service with a mock up of an imagined Google home page; keywords 'cars', 'homes' and 'jobs' are added next to the search box.

Essentially the industry is moving towards a pay-for-performance model, rather than a pay-for-distribution model. Innovation and asking consumers about the service they want is essential; publishers have little time before Google - as well as a new classified service from Microsoft - is fully established.

Peter Zollman, founding principal of Classified Intelligence, said that many US newspapers are finally making significant changes to their advertising businesses. But he criticised US papers for being too timid and complacent.

"In many ways the UK market is ahead of the US, partly because of a more competitive classifieds market served by free publications like Loot and Friday Ad. They have been competing with newspapers for a long time," he said.

"US newspapers stuck their heads in the sand because they had been competition free - sites like Craigslist are a relatively new phenomenon."

The report recommends 10 strategies to help publishers compete with Google. They include training staff to develop expertise in search-engine marketing, giving advertisers a wider audience by syndicating advertising content to Google and partner sites, and developing print as an upsell to online advertising.

Mr Zollman advised news publishers to think about building new business rather than concentrating on protecting their advertising publishing model.

"It's not a case of throwing out the old and bringing in the new," he said.

"It's a balancing act between maintaining the existing market and developing a new audience - and you have to make it all work seamlessly. It's not easy."

Publishers should look at a combination of free classifieds in certain categories, upselling advertising options and a self-service system - popular with consumers and more cost-effective for publishers.

A standalone classified site is also being tried by some publishers including the Bakersfield Californian.

"The goal is to reach different audiences, to learn what they are interested in and serve that interest. Not to deliver what traditional newspapers have always delivered," he said.

"It's a wise strategy. A lot of people aren't reading newspapers anymore, and for different reasons, but publishers are trying to build a new audience."

The full report is available from Classified Intelligence.

More news from journalism.co.uk:
Google searches out new ad territory
Google classifieds get serious
All mapped out but nowhere to go

Free daily newsletter

If you like our news and feature articles, you can sign up to receive our free daily (Mon-Fri) email newsletter (mobile friendly).