We’re always looking for what’s up and down in the economy. One likely contender: Garage sales.
In this week’s AdAge, Walmart’s Duncan Dreschel sheds a little light, noting that the company seeks to simultaneously extend the brand, drive traffic to the site and help customers. “We see part of our role as connecting customers to help each other. It also allows us to provide a more complete offering.
“We’re looking at lots of things to make classifieds evolve,” he added. Already, he noted, some people close deals struck on the website in the parking lot of their nearest store.
Is it really so easy for the Facebooks and Wal-Marts of the world to use a national platform like Oodle or LiveDeal to successfully launch classifieds? Jay Schauer, a friend who runs Ad2Ad.com, doesn’t think so. (Among other services, Ad2Ad automates classifieds for community and college newspapers.)
Schauer complains that “people seem to assume that classified advertising is an easy business to understand and enter. It’s not. It’s a business that demands fierce commitment to localization, understanding the nature of the small local advertiser, and a commitment to small, individual sales.”
Schauer notes that it is “hard ground for start-ups driven by dreams of an IPO. In the past year I’ve seen three competitors drown. Two others are careening toward the treacherous shoals of this turbulent sea. It gives me no pleasure. Good people with good intentions and lots of hard work wasted — it’s a shame and I mean it.
“What those failing groups seem to have lacked is the desire to get down and get real with the individual advertiser who will actually pay for classifieds. That customer is not rich, not sophisticated, not interested in pretty, elegant or cool.”
He goes on to note that “the bulk of classified advertisers live in small towns and tight neighborhoods. They don’t build social networks. They are typically the salt of the earth — and hence of little interest to VCs. This customer wants RESULTS FAST. They want to get information to their neighbors — who are also their customers. Most important, they will pay a reasonable price to do so.”
“Classifieds are not pretty,” says Schauer. “But the economic engine they support is large and remains robust. More important, the neighbor-to-neighbor business interaction is core to the strength of the greater economy and to our political well-being.”
LiveDeal, under new management, has moved away from its roots in Yellow Pages and classifieds, and begun a strategic focus on high end SMB services. As part of its strategy, the company has been selling off many of its directory-related accounts, which CEO Mike Edelhart calls high maintenance, high churn, low yielding and declining.
To date, 24,000 accounts have been sold off, including 14,000 yesterday to Local.com, which paid $3.1 million. That leaves roughly 25,000 of LiveDeal’s original directory accounts.
Edelhart notes that the typical Internet Yellow Pages account has been bringing in just $380 per year, with as much as 45 percent going to third parties and billing costs. They often have delayed payments to boot.
By contrast, its suite of SMB services brings in $3,500 per year. Included in LiveDeal’s suite are URLs, websites, SEO/SEM and click to call. Most are being sold via telemarketing. “We’re good at that,” he says.
The company’s clean, new, sophisticated website also plays a role. “It encourages people to call us.”
“We’re (no longer) selling other people’s capabilities,” says Edelhart. “We’re selling things that we service ourselves” and allows the company to extend customer relationships.
At this point, LiveDeal has 1,500 leads-related accounts, on top of the remaining 25,000 directory accounts. In the end, Edelhart hopes to acquire many more leads-related accounts, while keeping just 10,000 of the directory accounts – the ones that come from higher-yielding national- and automatic clearing house accounts.
Classifieds, however, are not a current focus (remember, LiveDeal started life as a classifieds company). But Edelhart expects that they’ll eventually be integrated with the new offerings.
With the sales of the directory accounts and the SMB services’ stronger cash generation, the company has developed a cash hoard of $11 million, Edelhart adds, up from $3.8 million in September. “This business model accumulates cash,” he says.
The company also has a management team “that is entirely new,” says Edelhart. “We never had a VP of marketing before. We never had a VP of product.” The company now has 120 employees in total, half of which are in sales.
Oodle has been describing itself as a “social classifieds” platform for some time, extending its reach via deals with local powerhouses such as AOL, Comcast, Cox, Media General, Freedom and Wal*Mart. Now, it is set to make the hype more of a reality with dramatic enhancements that will power Facebook Marketplaces.
The launch strives to leverage the social values of Facebook, and takes it several steps beyond earlier Oodle features, such as local car price comparisons. The site will start with personal goods. Housing and employment will be added in coming months.
Users of the new service have four options. They can sell, sell something, give stuff away or donate to charity. The charity angle is a powerful one – also embraced by InsiderPages, which makes a donation to charity for every written review. In Facebook’s case, users can choose to donate proceeds from their sold goods among one million charities that have partnered with Network for Good (i.e. “Nature Conservancy”).
“It is a virtual garage sale for charity,” says CEO Craig Donato. It also comes complete with a receipt for tax purposes
While users may choose their own charity, more than 20 charities are highlighted on the site. Each has committed to helping get the word out to their own members.
In keeping with the social aspect of the site, Facebook not only lets users describe the goods and chosen charity, but also lets users describe why they are supporting this cause. “It is a big part of the conversation and building community,” Donato notes.
Other enhancements include some basic mainstreaming for listing goods. “We learned something. Don’t make them fill out long forms,” says Donato. Goods are also searchable, and locations can be configured (so that only my San Diego friends will bid on a couch, for instance). “We are asking ourselves how we can create an opportunity for our advertisers,” says Donato.
To be sure , the addition of Facebook is something of a coup for Oodle, which has also recently added AOL and MySpace (the latter, which has had pre-existing classifieds, is still being finessed). The new social and charity angles also could conceiveably put a mega- used goods forum such as eBay within its sites. “We are building a critical mass through the network,” says Donato.
While Oodle gets about 50 percent of its traffic via the network now, that ratio is expected to kick up to 75 percent within a few months. “Our partners are quite large,” notes Donato. “Last year, even without Facebook, MySpace and AOL, we tripled our traffic.”
There is a certain magic with coining a far-out name that really sticks, like “Google” or “Yahoo.” Apparently, the new folks running eBay Classifieds, however, don’t think that ‘Kijiji’ has made the grade. Kijiji, which is Swahili for “Village,” is eBay’s homegrown version of Craig’s List.
Key categories include motors, pets, goods, services, housing, jobs and personals. Unlike Craig’s List, which is embroiled in a lawsuit with eBay, the site enables users to personalize the site (My Kijiji)” and add alerts, photos, events and search.
A report in RentBits (via TechCrunch) today notes that eBay has sent letters to registered Kijiji users in San Antonio and Pittsburgh, testing a simpler name: “eBay Classifieds.” The name is certainly easier to grasp, although it may mean the end of the specialized classifieds sites that eBay has acquired or developed over the past several years.
“Please rest assured that nothing will change other than the name and the domain!” notes eBay’s letter. “Everything else stays the same. That means your ad will stay posted on the site, but instead of finding it at Kijiji San Antonio you will now find it at eBay Classifieds San Antonio.”
Kijiji, which launched in February 2005, is now serving 23.2 million users around the world, although just 3.7 million of these users are in the US. Last April – almost a year ago –eBay claimed that it had a “leading position” in 12 countries, including Germany, the UK, The Netherlands and Canada. It has launched in some of these markets from scratch. In other markets, such as Germany, it has purchased an existing online classified provider (OpusForum.org) and rebranded it.
Cablevision bet big on synergy (and ignored the CW about the newspaper industry) when it bought Newsday from Tribune Co. last summer for $650 million. Today, less than eight months later, it concedes that it has written off $402 million of that investment (a significantly worse investment than Stephen Marbury of Cablevision’s Knicks).
Whether the economics of the deal ever makes sense, here’s the rub…. Cablevision remains extremely bullish on the possible synergies between the newspaper, the newspaper website, and the on demand video capabilities of its Optimum broadband service. On January 1, it launched the Optimum Autos brand across both Newsday and Cablevision on Channel 605. Looking forward, Optimum Homes, a real estate channel, has been slated for Channel 606.
During an analyst call today, COO Tom Rutledge said that Cablevision continues to believe that it can better manage the transition of Newsday, which counts a million users a week for its newspaper and website. News is one aspect – Cablevision has been an industry leader with local 24/7 news. Classifieds are the other.
“Optimum Autos has great content related to Long Island, it’s a respected brand and it will continue to attract the same advertisers and consumers that we want to reach,” said Rutledge. “That’s ultimately the value that Newsday offers to us.”
Optimum Autos itself is poised to leverage the combined dealer base of Newsday, Newsday.com and Cablevision. A quick count looks like they may have around 300 dealers between them.
The rebranded site, which switched from Cars.com to Adicio Motors on January 1, provides “the best of all worlds,” per company press release. It has “maximum coverage across print, interactive and cable TV platforms, easy to use technology for uploading, searching and reporting, and a customizable local environment.”
The release went on to note that Optimum Autos includes “multiple color photos for each listing and one-click dealer contact. It also has hundreds of promotional video clips from leading auto manufacturers.”
Adicio Motors GM Deep Menon told us that after 11 weeks, the implementation has been going very well. By using Adicio’s reporting tools, Optimum Autos can show dealers their ROI based on the number of qualified leads they are getting. They can also get exclusive leads.
“Dealers have many ways to maximize their visibility, especially with video reviews, says Menon. At the same time, “the site can also sell pre-roll and video sponsorships by car make.” More advanced technology is in the works.