Innovation in College Media

Last week, I had the opportunity to interview Derrick Peavy of Universal Advertising, which operates in the classified advertising space. They are currently building out collegeclassifieds.com, a site which has a number of partners in the college media community, with a strong presence in the Southeast. The recent announcement that Facebook would be launching their own online marketplace for classified advertising (AP story) provided an occasion to get an explanation of what collegeclassifieds.com is, and how the classified marketplace in general is changing with new media. These answers were provided via e-mail exchange after an earlier audio interview via iChat lacked sufficient quality.

What is it that you do?

Classifieds, classifieds, classifieds. That's it.

Since 1996, Universal Advertising (UA) has worked to build the easiest to use ordering system for classifieds within college newspapers, and we put that system on the web in 1998. Advertisers might pick one college newspaper or 100. Universal Advertising facilitates that transaction. Some college newspapers also work with UA to re-brand the site, and create their own classified service center, and that automates the classified sales process for the paper, lowers costs and simplifies a lot of things. UniversalAdvertising.com was the first site of this kind to focus on college media. It's a very cut and dry transaction and it's been a print-only transaction until this year.

Now, CollegeClassifieds.com is one domain among many that the company has owned for since the late '90's. And as classifieds have become more and more of a commodity, a free "gimme" on-line, I've spent the last couple of years thinking about how a free service can also bring revenue to college media and to my company (of course). At least in syntax, that sounds like a contradiction. But I think it's doable. Starting in the fall of 2005, I put up a couple of test versions of CollegeClassifieds.com to gauge the traffic and interest level. Based on that data, I opened the current CollegeClassifieds.com site in November of 2006. So, a year of actual data collection went into that, along with more than 10 years of experience working with classified advertisers and newspapers.

What's in it for the college papers?

An opportunity. It's the opportunity to keep and recapture some of the business that has been lost to online outlets. It's also an opportunity to better service the advertiser, keep the advertiser close to the newspaper and re-establish the newspaper as "the" marketing center for the campus community. Despite the proliferation of online outlets, many people would still like to have a clear-cut path to the college market. I'd like to help the newspaper maintain that path.

How does CollegeClassifieds.com work?

A college newspaper such as the Daily Cardinal (Madison, WI / University of Wisconsin), helps promote CollegeClassifieds.com by printing promotional ads when (and only when) they have free space in the paper, and also on their website. The emphasis there is when they have free space. There are no requirements, but it is in their interest.

Now, that idea is a pretty old idea - partnering with the paper to promote and build a brand or website and a lot of papers have been burned by that in the past. What is new, is the benefit to the paper. Their obligation, time and effort ends at those promotional steps. CollegeClassifieds.com then expends time and resources through paid online advertising and marketing to build the brand, free listings and traffic. As traffic for the specific campus increases, and as free listings for the campus increase, customers upgrade their free listing to a paid listing which will be shown in one of three ad zones, premium spots on the CollegeClassifieds.com site. The ad is then also fed back into the college newspaper web site to complete the circle, build on line readership for the paper and bring more value to the ad.

The upgrade price is about the same as printing the ad for the same duration in a campus paper. The accounting is made very transparent and the split is 10/45/45 - 10% cost, processing overhead, and 45% to the newspaper or student group, and 45% to CollegeClassifieds.com. So, the newspaper or group gets a clean, no cost split. CollegeClassifieds.com has to use it's split for paid advertising and marketing. But, that is a big return for the paper at no real cost or capital outlay. As Ron Popeil would say, you "set it and forget it."

What has been the newspaper's response so far?
Any push back?

It's been really, really good. I think most students get it, they know what is happening out there and they know the opportunities being lost even if you cannot precisely quantify that loss. I've seen one small paper push back. I think it's a matter of continuing to prove the concept.

What about Facebook?
What does that mean for CollegeClassifieds.com?

I am a little embarrassed to say that before I set up a Facebook account, I just assumed that Facebook had classifieds, it made sense. Being 35, I am a little past the college age and never felt the need to set up an account on Facebook. I knew that MySpace had classifieds and so I just assumed Facebook was already doing this.

About a month ago, the rumor gets out that Facebook is going to do classifieds and the web "power users" and bloggers start to loose their minds. They predict CraigsList is going to suffer and that any and every little niche oriented classifieds site is going to die an instant death. I just don't believe that.

Donna Bogatin has a good rebuttal for that.

I think my own embarrassment serves as a good example of why this is not such a major issue. Of course, we all know that there is a 22-million member market on Facebook and you can already advertise there. But the point is, the lady looking for childcare, the apartment manager with units to rent, the shop owner looking for help; these people aren't potential Facebook classified advertisers, they just aren't. Either they don't know of the site (believe it or not), or they don't really care. You gotta remember, if you're over 25 and out of college, there is a lot of stuff competing for your attention, family, kids, work. Facebook and MySpace become less and less important.

Another thing, people think there is all this money to be made in on line classifieds. Depending on who you talk to and how they gauge it, newsprint as a whole has lost anywhere from 5-15% of their classified business over the last 5 years to on line outlets, and a lot of people point to CraigsList. But there are some contradictory trends in that assumption and that figure.

Classifieds were already under pressure before CraigsList, from sites like Monster, HotJobs, etc. More importantly, what people often miss is that much of the value that has been lost in print revenue wasn't really there to begin with, it's actually new revenue and new business that has been created since the web came into wide spread use. Classifieds are a natural online commodity - a free commodity. CraigsList did maybe $20-25 million in 2006, according to Forbes. So here you have the leader, the big guy, who flat out states that they are -not- competing and purposefully devaluing the ad - and they only did $20-25 million. When you factor in Oodle, Edgeio, Backpage, and all these other large outlets, it puts the whole Facebook move into perspective. It should also be mentioned here that the biggest emerging competitor for the printed classified dollar tomorrow is cable TV. That's a huge opportunity and a bigger threat.

Ultimately, I believe this is less about Facebook trolling for money or trying to compete with anyone than it is about checking off a "to do" item. It just needed to be done for the sake of their community. But it doesn't change my offer to the college paper, the opportunity that CollegeClassifieds.com presents. And it isn't going to stop CraigsList or Oodle or even my own small site from continuing to grow.