Industry experts say if daily newspaper classified departments don't become more aggressive, they stand to lose ground quickly.
In 1996, total newspaper classified ad spending was $15.1 billion with $2.7 billion attributed to real estate and rental classifieds, according to the Newspaper Association of America. That number was up from 1995, when total classified advertising was estimated at $13.7 billion with about $2.51 billion coming from real estate and rental classifieds.
SALES EFFECT CITED
"Newspaper classified ads remain the strongest advertising vehicle for home buyers and sellers," says Tony Marsella, VP-classifieds, NAA.
Classified Federation, an arm of NAA made up of representatives from the classified departments of member newspapers, is giving particular attention to real estate and rental classifieds, says Mr. Marsella.
`The Classified Federation "wasn't shortsighted, [it took] a look at a category most vulnerable to new technology; [classifieds are] very searchable, easily reorganized, easily put up on the Web," says Mr. Marsella.
Mr. Marsella says the findings of the recent study, "Classified: Make the Right Moves," will be presented April 30 at the NAA conference in Chicago.
It is a follow-up study to the 1996 survey, "Classified in Crisis."
GREATER EFFORT URGED
The first study included interviews with advertisers and resulted in NAA urging member newspapers to make an effort to understand their classified advertisers' needs.
To help newspapers maintain their stake in real estate classifeds, the federation in January launched RealFind, a toll-free service linking 70 members' newspapers. The move was in response to a similar program by Harmon Homes Publishing Co.'s Homes, where readers call a toll-free number and request a Homes for the area of interest.
RealFind offers readers the opportunity to request a copy of a Sunday real estate section from the community where they plan to relocate. In addition, the insert includes ads from Century 21, America Online, AT&T Corp., Alamo Rent A Car and four Hospitality Franchise Systems hotels: Days Inn, Howard Johnson, Ramada and TraveLodge.
500 PACKAGES A WEEK
The response to RealFind has been better than expected. NAA's distribution center is shipping at a pace of a little more than 500 packages a week. NAA expects to be shipping about 1,000 packages a week by the end of April.
In the future, an order form will be available on the Web to allow people interested in moving to the U.S. to order real estate sections.
Kevin McCourt, director of operations for RealFind, says the service results in increased value for an ad placed in newspapers, driving national distribution.
NAA plans to follow up with customers to find out at what point in the process they saw the ad and made the call.
INTERNET NOT REPLACING ADS
As for the Internet, Dean Welch, director of classified advertising at Atlanta Journal & Constitution, says, "Everyone's looking at the Internet, trying to sell something off of it, trying to make money, but let's face it, [access to the Internet] still isn't at a point where they are going to turn from traditional media that is working. They are going to experiment with it, try it out-it's a new and additional opportunity for them to extend their reach, but not replacing anything at this point."
Neither is RealFind replacing anything, says Mr. Welch, but it is an opportunity to access a market that might have been out of reach before.
Individual newspapers also are striving to make gains.
When The Sentinel in Grand Junction, Colo., initiated a survey of its advertisers, its consultant, Black, Williams & Associates, discovered that real-estate agents wanted a Sunday tabloid.
As a result, the newspaper last June launched a 24-page section inserted into Sunday papers that was also placed on racks in area stores during the week.
Prior to that, the newspaper had an every-other-Friday section.
Focus groups composed of area real-estate agents revealed the need for a strong Sunday section.
"We recommended to the newspaper they reconfigure the section, add articles and make it more like a piece that has an increased shelf-life," says James Williams, president of the consultancy.
"Realtors wanted their own product, and that's what we designed. We're able to pick up on our lineage and revenue," says Alan Todd, Sentinel classified advertising manager.
Mr. Williams says his group developed the same type of Sunday insert for the 142,000-circulation Eagle in Wichita, Kan.
Mr. Williams says single advertiser magazines also help newspapers stay competitive.
Gannett's 22,000-circulation North Hills News Record in Warrendale, Pa., offers Coldwell Banker a 72-page Real Estate News and Buyers Guide. The tabloid runs as an insert the first Friday of each month in the News Record and Coldwell Banker distributes 27,000 additional to area racks, where the section has a monthlong shelf-life.
"Five years ago, this would be unheard of," Mr. Williams says, adding that Advertiser and Star-Bulletin in Honolulu, also offers a Coldwell Banker magazine.
Mr. Williams says the Honolulu section is tied by contract to a 52-week full-page Sunday real-estate section ad-and he encourages all newspapers to forge similar deals.
Realtors are looking to save money, he says, and newspapers should not assume that helping the advertisers save money means newspapers make less money.
"They make more money through an increased market share," says Mr. Williams who adds, newspapers must evaluate their real estate classified products.
"If you don't do something about it, it's not a matter of if you lose your lineage, but when and to whom."