Friday, March 30, 2012

News Corp. wants its used car ads back, will launch new website to compete with Auto Trader in the UK

According to the UK website Motor Trader, Rupert Murdoch's News International wants to launch an online website to attract used car advertising in direct competition with the UK site Auto Trader.

Motor Trader has discovered that Murdoch's UK unit is looking to hire a "Head of Product and Content" to help launch the site. The report hints that the new site will use a typical Murdoch strategy of cutting the prices for advertising in order to bleed Auto Trader, which is owned by Guardian Media Group and Apax Partners (though to be fair, that is my interpretation of the report).

News International will have a tough task, no matter what its tactics. Regaining classified business is much harder to accomplish once the business is lost – something any classified manager will tell you.

Most observers, while trying to explain why the newspaper industry is suffering so badly, will point to the loss of classified advertising as one of the core reasons for the decline. Most attribute the loss to the rise of the Internet, but as TNM readers probably know I hold an alternative view. My belief is that newspapers have in the past, and many continue now, to view themselves as newspaper companies first, publishers second. The consequences of this are that newspapers tend to protect their print product against all comers, even other print products, rather than considering the merits of launching their own new products. The fear, of course, is that by launching their own new products they will compete against themselves.

The reality is that the business – used cars, real estate, help-wanted – has moved on to other platforms, other companies. Creating a competitive website will mean that they will have to hire new sales teams that are both comfortable selling digital and also knowledgable in selling the category. I have no doubt News International can do a decent job at this, but it would have been easier if they did not lose the business to outside interests to begin with.

Just to reinforce that point: most of this business (used cars) started to migrate to the auto traders long before the rise of Internet publishing.

The approach most newspapers in the U.S. have taken has been to wait until it is too late and then invest in online properties such as Classified Ventures and CareerBuilder. The problem with this approach is that it is outside the newspaper. Rather than transforming the classified department into a cross-platform selling unit, it continues the us-and-them approach.