This is the fourth in a series of 10 posts on what local newspapers should do to survive and thrive in the face of the economic meltdown and the societal shift to the Internet.
4. Make the classifieds a separate, standalone business. Instead of trying to beat Craigslist from within a newspaper operation, free the people running classifieds to do what’s best for that business or hire new people to take the business in a different direction. (I owe this opinion to a seasoned newspaper advertising executive who encouraged me to consider this approach.) Give the new company the existing revenue stream and technological base and the authority to set their own course. If they want to buy pages in the newspaper for print ads, fine. If not, fine. Remove any contribution from classifieds from the newspaper’s budget. Don’t include any projections of a contribution from classifieds. What this will do is free the people running classifieds to stop thinking of them from a newspaper perspective and start thinking of them from a customer perspective. Their role going forward: Connect buyers and sellers. If a newspaper or some other print products work in specialty categories, fine. If not, that would also be fine. The managers would not need to use print unless it made sense. If they can’t make the business successful, it dies. This would also free the rest of the newspaper from waiting for the return of classified revenue in key categories. It will make it clear to everybody left at the newspaper that they have to find new sources of revenue, that they can’t live on the hope that what once worked will come back and save them.
Here are some concrete steps:
• Create a new company with the mission of connecting buyers and sellers. Do not burden the new management with the existing staff. Let them hire the team to achieve their goals.
• Reset the revenue budget of the newspaper to determine the expenses it can support under the new business structure.
• Establish a team to find new sources of revenue not tied to existing classified categories
Next: Make the local newspaper a transactional site.
Previous: Realign the internal operations of local newspaper companies to make marketing, advertising and editorial partners every step of the way.