By Hays Goodman
Associate Editor

Newspapers run the gamut in the business of taking classified ads online.

Many smaller publications provide a simple e-mail link, effectively saying “e-mail us your ad,” some provide an online form that passes the information to an e-mail account, and some have full integration with legacy classified systems that handle the entire transaction including credit card verification. That last step is considered the critical part of the chain, since the e-commerce industry as a whole has, from the very beginning, seen this process as a vital part of the consumer experience.

AdStar is one of the better-known solutions for a newspaper wanting to take classified ads online. The Marina Del Rey, Calif.-based company, which functions as an application service provider, offers the service for more than 50 publications that range from the basic service of ad intake and credit card billing that transmit an e-mail to an existing ad taker, all the way to full integration with a newspaper’s front-end system. AdStar was founded in 1986, as an offshoot of a consulting project with The Newark (N.J.) Star-Ledger to move terminals out of their phone room and install them into their large-volume recruitment advertising center. The costs of that were prohibitive, so alternatives were explored such as using Radio Shack TRS-80 computer terminals. At that time, AdStar developed software running under DOS that allowed remote terminals, through the use of phone lines and modems, to input classified ad data into the existing front-end system.

“We thought we had invented levitation,” laughed Leslie Bernhard, president and chief executive officer of AdStar. “We imagined that every paper, not only in the United States, but in the world who was doing classified advertising would want to do this. And we still believe that they do, and they will, you just have to live long enough because of the speed at which the industry is able to move.”

Predictably, the expansion of the information economy was a big turning point for AdStar, as well as many in the newspaper business.

“When the Internet came along, it was a major ‘ah-ha!’ for us,” Bernhard continued. “We said, ‘here’s a built-in infrastructure through which we can put together this application environment to support the buying and selling of classified ads utilizing the Web.’ In 1998 and 1999 we shifted the focus of the business to combine it with the Internet to be a revenue generator, and at that time repositioned the company as an ASP.”

In the third quarter of 2001, AdStar processed more than 26,000 individual ads through the infrastructure compared to just over 22,000 in the same period in 2000.

A number of manufacturers offer individual modules for their existing ad-taking systems that can extend their functionality onto the Web. For example, those publications that run Harris Publishing Systems Corp.’s AdPower installation can add the AdWebster component, which then offers a full WYSIWYG interface, so advertisers can see the layout of the ad before buying it, including any upsold components. Where AdStar specializes in interfacing with multi-brand systems, the AdWebster option is used only with existing or new Harris systems. Similarly, the WebBase module from Mactive interfaces with the AdBase front end to use common customer records so possible duplication doesn’t occur.

Other companies are pursuing another side of the equation: exploring how best to present graphical ads to the consumer. Many systems exist for putting liner ads online, and the vast majority of newspapers realize that classifieds are really an ad medium that is ideally suited for the Internet, due to the very nature of classified search and retrieval. Display ads are another story, however, and with the increasing adoption of PDF-oriented workflow, several firms have developed ways to search and display graphic ads online.

One of those companies is AdExpedia, a small company based in Chico, Calif., that is now supplying their services to a number of Web sites such as SFgate.com, DallasNews.com and HoustonChronicle.com. They also work as an ASP arrangement, in which a publication sends either full pages or individual ads in PDF or EPS format to a central repository, and the process does not require an ad manifest: only the live ad bank of files.

Paul Wolfe, vice president of newspaper sales, 
demonstrates AdExpedia at the Interactive 
Newspapers show in Jan Jose, Calif., last month.
Photo by Hays Goodman

The files are sent to AdExpedia by 11 p.m. PST, and the AdTabs processing is completed by 6 a.m. the following day. The AdTabs system converts the large graphic files into lightweight GIFs or JPEGs that download quickly. Merely clicking can then zoom into specific areas on the ads, and embedded coupons can easily be printed.

At the time of process, information is extracted from the text to create a navigation structure, allowing the consumer to search ads by location, brand, item and category. In addition to digitizing display ads, the service can also convert whole special sections to make them available online, and does not break up facing pages but preserves the two-page spread while adding the unique features.

“We really feel this is creating distinct value for the advertiser,” remarked Paul Wolfe, vice president of newspaper sales. “The consumer who looks at ads in the Sunday paper might be more of a browser, where the person who is actually searching on an item category on our customers’ sites is a buyer that knows what they’re looking for.”