Friday, February 24, 2006
Free Not Necessarily a Path to Paid
I sat in on a session at the
Newspaper Association of America convention
this week hoping to learn how newspapers bold enough to experiment with
free classified advertising were being rewarded with significant
payoffs in the form of up-sells and other revenue streams.
Not so, it turns out, at least in the experience of Tribune Company and the
San Diego Union-Tribune.
Dexter LaPierre, classified advertising director of the
Union-Tribune, said the paper took a
step into free (in limited circumstances, for merchandise under $5,000) last August partly to stem the loss of business to
eBay and
Craigslist.
Especially when supported by what he described as "a lot of money spent
on promotion," he said that part of the strategy worked well.
LaPierre said the paper learned a couple of painful lessons in the
process: "We were not very successful at up-selling, and when we
stopped promoting, (lineage) began dropping." He said the
free offer
increased lineage by as much as 200 percent when it was promoted, but
leveled off at an increase at 110 to 120 percent when the promotion
stopped.
Tom Finke, director of corporate development for Tribune Company, reported similarly disappointing
up-sells at his company's
Recycler.com site.
"The up-charges weren't enough," he told the NAA audience, "to offset the cost of acquiring the customers."
It's unclear whether either case provides sufficient reason to abandon
free altogether. But they certainly do provide a realistic sense of the
risks.
Read more about the session in
this blog item by the NAA's
Rob Runett on the conference site.
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