A group of California newspapers teamed up to combine their classified ad sales efforts in a bid to compete with eBay and Craigslist.

More than 100 Golden State papers are now part of the Classified Ad Network, backed by the California Newspaper Publishers Association and software vendor Verican Inc.

“After following Google, Yahoo, Craigslist, etc., we found that the market for pure online publishing was saturated,” said Eric Buskirk, chief executive officer and founder of Verican, who started the company after years of working as an independent contractor integrating financial systems such as Oracle and SAP. “[But] the pure Internet plays will never be able to match the value local reporters and sales representatives provide by living and working in the local community. Newspapers can cooperate to leverage their branding and credibility for a combined print and online platform, which is why we partnered with the California Newspaper Publishers Association to build the Classified Ad Network.”

The Sonoma Index-Tribune’s online classifieds are hooked into the Verican-powered classifieds network. The classifieds are displayed by geographic relevance, with locally sourced classifieds showing first, and then expanding outward.
 

The network’s rationale is simple: Since newspapers already take the output from print classifieds software and output it to their Web sites (and sometimes in the other direction as well, using reverse publishing), exporting that same data across new external networks is a natural progression.

Ready to go

CAN formally launched earlier this year after a year of beta testing and fine-tuning. For now, it offers classified ads, but CAN will be enhanced to include content such as headlines and calendar events later this year, Buskirk said.

Efforts like CAN are critical, especially as rapidly expanding companies such as Google and Yahoo obscure the lines between content creation and content carriage.

“[Companies like Google and Yahoo] directly service and brand themselves to readers and advertisers,” Buskirk said. “We frequently warn our customers of this blatant conflict of interest.

“In just a few years Google has grown to a market capitalization exceeding $100 billion. Don’t be surprised if Google turns on the industry after luring readers and advertisers of the newspapers,” he said.

One California paper hoping to reap benefits from CAN is the Sonoma Index-Tribune. The publication originally used TownNews’ classified software, but converted to Verican’s app, believing it to be a better and more customer-friendly product, according to Publisher Bill Lynch.

CAN was appealing because of the continuing entrenchment by online-only competitors, especially in tech-savvy northern California.

 “Putting something on eBay and getting people to bid on it is, for many folks, more attractive than simply selling something in a newspaper classified, taking phone calls and having people come to your house,” Lynch said.

Lynch calls the Index-Tribune’s classified Web site a hybrid, because of the order in which classifieds are displayed. In each category, locally sourced ads are displayed first, followed by the networked ads in each category listed in order of geographic proximity to the Index-Tribune’s local market. All liner classified ads are automatically placed in the network.

Various methods supported

To physically move the data, a variety of methods are supported. Interfaces are currently available for common newspaper classifieds front-ends, including those sold by Mactive, Mediaspan, CAMS, Digital Technology International, Advanced Publishing Technology and Publishing Business Systems. The upload process is typically identical to the procedure a newspaper uses to publish ads online and can be accomplished through FTP, manual upload from a secure administration page, or even copied and pasted if the newspaper does not have a front-end system in place.

“More than 60 percent of our classified private-party ads are ordered online,” Lynch said. “We tell our customers that their purchase includes the benefit of the network.”

The Index-Tribune also uses the Verican software for online pricing and intake of classified ads in a Web browser. The paper is working with Verican to develop a new browser-based self-service display ad order system that is currently in a test phase in the Real Estate Open House section.

Once the tests are complete, the newspaper plans to expand it to use for ROP advertising.

High hopes

Lynch has high hopes for expanding the reach of CAN, even beyond state borders.

“If newspapers would work together, the database of ads that they could create would be huge - larger than Craigslist,” he said. “It would have the added benefit of print publishing and print promotion.

“Our idea was to start with California newspapers through the CNPA and then branch out to other states until we had a nationwide network all made up of newspapers, with access to the system only through participating newspapers,” he said. “This would be a ‘newspaper-owned, newspaper-customer-only’ type of product. You cannot place an ad on the network directly, except through a host newspaper’s Web site - there is no ‘online only’ option.”

Verican’s pricing model is based largely on revenue share - typically around 6 percent for classifieds, depending on which components are used. More software modules are planned for the future, and currently consist of classifieds, recruitment and personals. Module releases scheduled for later in 2006 include news, calendar, real estate and yellow pages.

“Essentially, we envision the Classified Ad Network becoming for newspapers what Visa is for banks,” Buskirk said. “A shared network, which derives significant value for its constituencies.”

To that end, Verican recently signed an agreement with the Arizona Newspaper Association to begin a classified ad network in the Grand Canyon state.

CAN may also soon find competition. Bob Cauthorn, former Internet director at sfgate.com, is planning to launch a similar classified and content sharing network called CityTools, according to a report by consultant Classified Intelligence.