Mature online newspapers now generate more revenue from online-only classified ads than classified upsells. Other newspapers rely heavily on upsells and are creating opportunities for online-only competition to win over their customers with lower prices.
A number of papers still sees a significant amount of revenue from classified upsells, while some, even now, don?t charge anything separately for an upsell. They bundle it in with the print ad in one price, which often is used to justify the print side and ends up devaluing the online portion.
Print classifieds have dropped so far, so fast that many online newspaper operations are seeing a year-over-year decline in their total revenue. Many operations that rely more heavily on upsells are suffering the most.
An effective way of upselling classified ads into online is by establishing a separate price for print and online and one discounted price for both together.
Rate increases for the online product are justified by the growth of the Web site audience and additional reach of the ad. If a site audience grows 20 percent, it is certainly justifiable to grow the online price by 20 percent, especially considering the cheap price of upsells at many newspapers.
The opposite is true on the print side. The industry may have reached the point where further increases may not be possible; indeed, prices are flattening and likely face declines in the coming months and years. The declines will be necessary to increase volume, revenue and profit for the online product.