with Peter Zollman

Until recently, there was just anecdotal evidence. But now it’s proven: To bring in more money from advertisers, let them place their own ads using a robust online system that lets them see the ad as they build it themselves.

It may be counter-intuitive to newspapers that want a direct, personal relationship with their advertisers, but it’s clear: If you let them build it, they’ll make it bigger and fancier and spend more money.

Classified Intelligence recently released a 37-page report, “Selling Print Classifieds Online: New Money, New Business,” showing conclusively that there’s good reason to buy (or build) a good program for accepting ads online and to promote it heavily. Based on a survey of more than 75 U.S. daily newspapers, the report was sponsored by AdStar Inc., an application service provider that works with dozens of newspapers to support online sales of print classified ads. The report is available free online at http://www.aimgroup.com/reports.

Ads placed directly online by advertisers averaged five percent to 38 percent more revenue than comparable ads placed by phone. (We heard from papers where the numbers were even better than that, but none would share details on the record.)

At the same time, there was a lot of whining by the people we interviewed who were not accepting ads online, or who use very limited applications that are little more than e-mails to the classified department. At many papers where the e-mail method is used, ad sales reps have to call the advertiser back to outline prices, verify the content and collect credit card or other payment information.

While it’s true the phone call provides the advertising rep a chance to upsell special features and services, it’s also true that the customer has already told the newspaper how he or she prefers to do business — online — and the newspaper is disrupting a relationship it has just developed by forcing the customer to respond in a different manner.

Furthermore, many of those callbacks fail. At the Asbury Park (N.J.) Press, about one-quarter of all the e-mailed ads were lost in process without appearing in print, until the paper upgraded to a complete online ad entry system.

The report looks in depth at five newspapers or groups that exemplify best practices: the Atlanta Journal-Constitution, the Orlando (Fla.) Sentinel, King County Journal Newspapers near Seattle, Wash., the Asbury Park Press and the Daily Camera in Boulder, Colo.

The Daily Camera, a 33,000-circulation daily, is selling an average of $1,000 per day in classifieds placed online. The Atlanta Journal-Constitution indicated it is taking in more than $500,000 annually in ads it would not otherwise receive if it weren’t for the online sales site.

One group is generating amazing results accepting display ads — primarily retail — developed and built online directly by advertisers. The King County Journal papers use an online application to pursue non-advertisers and sporadic advertisers. Within three months — post-Sept. 11 — 20 advertisers had purchased ads ranging in price from $75 to $380. More impressive, all 20 purchased additional ads when the papers’ reps followed up with a sales call.

Most of the papers promote this service poorly, which is surprising, since it enhances revenue and cuts costs at the same time. Some list the URL for their online ad order sites in the paper, next to the phone number for calling in a classified ad. Others hide it or promote it minimally.

During our interviews, executives at newspapers that are not taking classifieds online frequently explained why they feel they have to maintain the relationship with customers by speaking with them on the phone to gather information about the caller. They must have forgotten that online they get much more information. If the online application is robust enough, they can watch every step the advertiser takes in building his ad, or, in some cases, abandoning it. They can gather phone numbers and match them against a subscription database to offer a real-time special offer to non-subscribers, they can collect e-mail and mailing addresses, and they can use the data later for e-mailed ad and subscription renewals.

Some papers have developed online ad-input services in-house, including an impressive one at the Daily Camera. But we’d argue strenuously against “build it yourself.” With so many good programs and strong vendors out there, why pay staff to build something you can probably buy cheaper and launch faster, all the while benefiting from others’ experience?

All in all, this is a no-brainer. If you’re not taking ads online yet, in the most robust fashion possible, you should be.

Peter M. Zollman is founding principal of Classified Intelligence L.L.C. and the Advanced Interactive Media Group L.L.C., a consulting group that works with newspapers and other media companies to develop profitable interactive services. He can be reached at 407.788.2780 or via e-mail at pzollman@group-aim.com.