Compete With Free By Going Beyond Free
Newspaper executives often complain that the Internet culture of giving everything away for free makes it hard to devise a business model that can sustain newspaper journalism. This is especially true of classified ads, since competitors like Craigslist are (almost completely) free.
However, given how competitive things are in online media, perhaps free isn't enough! Maybe newspapers should consider going beyond free -- where you not only give away content or services for free, but also offer users something extra.
Yesterday on my site ReinventingClassifieds.com, I profiled a new competitor to Craigslist that is taking this seemingly crazy approach. Jicka.com is a Craigslist clone that hopes to do a better job than Craigslist by offering better features and technology. (Craigslist has been notoriously conservative about keeping up with the times; its sites don't even support video ads.)
Jicka is targeting many of the same cities as Craigslist. How can a little startup attract attention and users when the 800-pound gorilla (Craigslist) is already satisfying most people who want to post free classifieds? One interesting element of Jicka's strategy is to give advertisers who place ads something extra beyond free ads: trial warranties.
Here's how that works: If you place an ad to sell your house on Jicka.com, you'll get a six-month limited home warranty for the buyer. Sell your car through Jicka ad and the buyer will get a 30-day limited warranty. Place any ad on Jicka and get one year of identity theft protection.
This scheme doesn't cost Jicka anything. The companies that offer the warranties consider it to be a good marketing opportunity, and they'll make money when some of the Jicka free-trial customers decide to renew the warranties for a fee. It's a win-win for Jicka and the warranty providers. (I don't know the fine details of Jicka's relationship with the warranty companies, but if you want to try something like this and are in a good enough bargaining position, your site might be able to get a cut of after-trial orders that result from your site.)
News organizations could try a similar strategy. In today's extremely fragmented media landscape, you must think creatively about how to attract an audience. Free is not as far as you can go.