Marketplaces Report - Amazon S3
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Marketplaces Report
Business Intelligence for Marketplaces and Classifieds Vol. 20 No. 1 – Jan. 17, 2019
Craigslist reaches
$1 billion in revenue
© Copyright 2019: Advanced Interactive Media Group LLC
Illustration Robert Dibrell
New design: New name / design for Classified Intelligence Report , page 2
Craigslist’s rivals: Marketplace, LetGo and OfferUp lead the pack, page 13
Print: Did Craigslist kill off newspapers? page 16
Vol. 20 No. 1 – Jan. 17, 2019
New name, new focus on marketplaces,
but our mission, serving you, is still the same
• Starting our next 20 years with a new identity and purpose
• “Classified Intelligence Report” doesn’t do us justice any longer
• You’re a marketplace (or getting there); we reflect that change
AIM Group Marketplaces Welcome to the first edition of AIM Group Marketplaces Report –
Report is the new name and a publication with a 20-year history.
focus of Classified
Intelligence Report. It more We’ve rebranded the report that was known as Classified
accurately reflects whom Intelligence Report because, quite simply, we’re about much more
we serve, and what we do. than classifieds nowadays. As you probably are, too.
Classified Intelligence Report was a great name for about 17 or 18
years. People knew what “classifieds” were, and it described what
we were about.
But more and more, classifieds are evolving into marketplaces.
And so we should, too.
At our first AutosPlus conference, in late 2017, Scout24 CEO Greg
Ellis challenged us, and the entire audience, in his keynote
address.
“The whole sector needs to stop describing itself as a ‘classified’
business,” he said. “It’s actually not reflective of where every
company’s talking about going. They’re actually talking about
being a marketplace, which is actually not a classified. …
“Secondly, most of the people who are less than 35 don’t even
know what a classified is!”
And that, in a nutshell, is why we’ve changed our name. It
seemed especially appropriate to do so as we move into our 20th
year of publication. (More about that in in our next article.)
Marketplaces, more accurately than classifieds, describe what
many of our clients are offering, and what most are moving
toward or striving to offer.
The primary difference between marketplaces and classifieds is
simple – the transaction. As we see it, and as most of the industry
defines it, classifieds are listings – cars, homes, jobs, stuff and
other item descriptions that buyers use to find what they’re
looking for. Marketplaces, on the other hand, participate in some
way in the transaction. In many cases, they provide the e-
commerce engine, the payment assurance, the shipping and
ancillary services like insurance, paperwork (houses, cars),
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •2
Vol. 20 No. 1 – Jan. 17, 2019
the back-end software (applicant tracking
About our redesign
systems) and more. CIR was redesigned into AIM Group
Marketplaces Report by Aleksey
If you’ve been an AIM Group client for a Belyalov, a talented and flexible designer
while, you’ve seen the transformation of from Almaty, Kazakhstan, in conjunction
Classified Intelligence Report during the with Pavel Marceux, our managing editor
past few years – cover art, many more in Moscow. Aleksey collaborated with us
graphics, more data about the companies through Upwork. The type font is Saira
we cover and a larger team of analysts. from Omnibus Type, offered under SIL
Open Font License. Our new AIM Group
The AIM Group last year added a new senior logo was designed by Luke Smith, our
consultant – Jonathan Turpin, who now runs marketing director, who lives near our
the company on a day-to-day-basis. headquarters in Orlando.
Jonathan was founding CEO of Fish4, the
classified advertising consortium owned by
the regional press in the U.K., operating
across autos, homes and recruitment. He in the conference business four years ago,
built Fish4Jobs into the highest-traffic and now run three highly rated working and
recruitment website of its time in the U.K. networking meetings for industry
executives: RecPlus, coming up in Barcelona
He joined the management team of Katja in March; Global Online Marketplaces
Riefler and Peter M. Zollman. Katja is our Summit, Miami Beach in June, and
managing director, conference organizer AutosPlus, London in September. We plan to
and executive responsible for our EMEA add one or two more conferences in the next
clients and coverage. She’s worked with dot- 12 months; you’ll hear about them shortly.
coms, newspapers, investors and trade
associations to help shape media companies We’ve also stepped up the frequency of AIM
for the future. Based in Munich, she joined Group Update, our email newsletter, and
the AIM Group in 2002, became European renamed it AIM Group Marketplace Digest. It
Director in 2011 and MD in 2015. now comes out weekly, on Tuesdays,
summarizing the extensive coverage of the
Peter, our founding principal, launched the marketplace / classified industry we carry
AIM Group in 1998 after stints in interactive on AIMGroup.com.
television, broadcasting, newspapers and
news services. He started his career in You probably know the AIM Group is a full-
classified advertising when he sold ads for service business intelligence company. In
the Record, his college newspaper, and has addition to publishing and conferences, we
been involved in interactive media since the provide a wide range of consulting services.
days of audiotex and fax newsletters. He is We help clients find new business and
well-known as a dynamic keynote speaker investment opportunities. We help them set
and has led hundreds of consulting projects strategies for growth. We support revenue
for AIM Group clients. He’s responsible for growth with training and analysis. In short, if
AIM Group operations in the “ROW” – rest of you need help, we can probably give it to
the world outside EMEA. you, with our team of senior-level
executives and experts all around the world.
We also added two regional directors, Leo
Siqueira in Latin America, and Angela So as classifieds evolve into marketplaces,
Hawksford in Sydney, who’s responsible for and the world of classifieds grows into much
our Asia-Pac services, team more, so have we.
and clients. They are expanding our
business and audiences, along with our We don’t say “thank you” often enough to
coverage, in those regions. our clients and friends, so allow us to say it
again. Thank you for your support, and best
We’ve grown in other ways, too. We started wishes for a healthy and happy, peaceful
and prosperous, 2019.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •3
Vol. 20 No. 1 – Jan. 17, 2019
Where did ‘Classified Intelligence’ come from?
It’s hard to believe this issue starts our 20th year of publication.
And it’s even harder for me to believe we’re no longer “Classified
Intelligence Report.” But AIM Group Marketplaces Report is a
much better name, in today’s world, so that’s what we are now.
(See our other introductory article for more about the name
change.)
People often ask: “How did you get into this business?” It’s
instructive and a bit of nostalgia to give a quick history lesson. So
indulge me, please, or just turn the page!
When I started in “interactive media,” more than 35 years ago, we
used two primary technologies. One was audiotex – dial a number
on your phone (which was, of course, plugged into the wall!) and
get stock prices, weather reports, sports scores and the like. The
other was fax newsletters. Yes, you could get a newsletter by fax
that included content of specific interest to you. Innovative. Truly.
Along came pagers, and I worked with Skytel to deliver news and
sports headlines by “alphanumeric” pager – another hot new
technology – and later with Motorola, which in 1990 launched
EMBARC, or “electronic mail broadcast to a roaming computer.”
Email, version 1.0 – or maybe version 0.5, since email version 1.0
came along after the internet became commercially available.
After work on an interactive television project for Time Warner in
the late 90s – “the world’s most advanced interactive media
project” at the time – I inadvertently began consulting in
interactive media and classifieds. Wrote a small book about it,
“Interactive News: State of the Art.” And my phone rang
incessantly. One of those calls was from Buzz Wurzer, then the
No. 2 guy at Hearst Newspapers. “This thing called The Monster
Board” – it hadn’t yet acquired the Monster.com URL – “is
probably going to have a big impact on us and all newspapers in a
few years,” he said. “Would you be willing to track it for us?”
And so, in 1999, Classified Intelligence Report was born. It was a
proprietary report for Hearst for almost two years, chronicling the
growth, linkages and deals made by classified and technology
providers. Mostly, we worked with newspaper companies, which
understood online classifieds would have an impact on them.
They just didn’t know what to do about it (and wouldn't listen to
us when we said they had to evolve, fast!). They were making so
much money with classifieds – at some papers, classifieds were
40 to 50 percent of revenue, with margins of 60 to 70 percent –
they just couldn't let go. Even though they knew that gravy train
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •4
Vol. 20 No. 1 – Jan. 17, 2019
would stop. Some were smart. Several
joined or built consortia, like Classified
Ventures and AdOne, but even those efforts
failed.
After a while, Buzz and Hearst Newspapers
president George Irish graciously agreed to
let us turn their proprietary consulting report
into an industry resource. Classified
Intelligence Report quickly became known
as "the bible of the classified advertising
industry,” a nickname we shed today as we
evolve into AIM Group Marketplaces Report.
But the future is much more important than drinks and food, but no speeches, no
the history. presentations, no speakers. One-on-one
time with your colleagues, your friends and
What’s ahead for us and our clients? us. Join us at a conference or Unconference
soon, would you?
More data: It’s an endless battle,
unfortunately, to get data about this More consulting: We’ve always been
business. Companies don’t share it, or they “consultants first, then publishers,” but that
provide it selectively – only the good news. word is finally getting out. It’s hard to
Our industry includes many privately held actively promote our consulting because
companies, which almost never provide data most of it is proprietary, meaning we can’t
on their operations and other metrics, and talk about it. But we’re doing much more
publicly held companies, which sometimes consulting these days than a few years ago.
provide overarching data about their So if you have any vexing issues or “out of
classifieds / marketplaces, but few specifics bandwidth” problems, call us and see if we
except those that make them look good. We can help.
keep working to provide more data and
better graphics that you help you A bigger, better team: Jonathan Turpin, who
understand the industry at a glance, and once headed the leading classified site in
that you can incorporate into your the U.K., has taken over day-to-day
presentations and internal reports. management of the AIM Group from Katja
Riefler, our managing director, and me.
More conferences: We entered the That’s freed up Katja and me to stay in
conference business a few years ago with a closer touch with our clients and prospects,
recruitment advertising conference. Now we put in more work consulting and on our
operate RecPlus for recruitment advertising conferences, and manage our respective
and technology companies; AutosPlus, the teams.
only conference in the world about
automotive advertising, technology and new About 35 people work with us now, all over
sales models, and the Global Online the globe, with clients and team members
Marketplaces Summit, which drew almost on every continent except Antarctica. Pretty
300 people last year and will be held in cool for a company that started in a
Miami Beach again this June. We’re working bedroom of my house near Orlando.
on one or two more conferences (details We’re glad you’re a part of this journey.
TBA) and more Unconferences, too. The From all of us, thank you. As always, let us
Unconferences are some of our favorites – know how we can help you get better at
three hours of networking with great people, what you do!
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •5
Marketplaces Report
Business Intelligence for Marketplaces and Classifieds Vol. 20 No. 1 – Jan. 17, 2019
2019 Craigslist Special Report
Craigslist reaches
$1 billion in revenue
© Copyright 2019: Advanced Interactive Media Group LLC
Illustration Robert Dibrell
© Copyright 2019: Advanced Interactive Media Group LLC
Illustration Robert Dibrell
New design, new name: After 20 years, CIR evolves into AIMR, page 2
Craigslist rivals: FB Marketplace, LetGo, OfferUp lead the pack, page 14
Print: Did Craigslist really kill newspapers? No way, we say, page 17
Vol. 20 No. 1 – Jan. 17, 2019 CONTENTS New name, new focus on marketplaces page 2 Where did ‘Classified Intelligence’ come from? page 4 Craigslist: The billion-dollar behemoth page 8 Craigslist: Our methodology page 13 Can U.S. app competitors catch up to Craigslist? page 14 Craigslist and the death of newspapers page 17 Mini edition next week This is a special edition of AIM Group Marketplaces Report, focused on Craigslist and on our rebranding. You’ll receive a “mini” version of AIMR, with our usual coverage of automotive, real estate and recruitment, along with people news and web briefs, early next week. Our next “regular” edition of AIMR will be published Jan. 31. Our recruitment trends and advertising annual report will be published the first week of March, just in time for our RecPlus conference – this year in Barcelona. Craigslist data sheets Our comprehensive Craigslist data sheets, which show all the markets where we counted ads on Craigslist, are available on request. Companies in this edition AdOne (5), AffordableClassifieds.com (16), AirBnB (10), ApartmentList (15), Autotrader.com (18), Borell Associates (18), CanYa (16), Cars.com (15), Classified Ventures (5), Craigslist (8,9,10,11,12,13,14,15,16,17,18), Edmunds (15), Elance (10), Facebook (10,12,14,15,16), Finn.no (17), Fish4 (2,3), Hearst Newspapers (4,5), Indeed (10,18), LetGo (10,12,14,15,16), Mercari (14,16), Monster.com (4,18), Motorola (4), Naspers (15), OfferUp (10,12,14,15,16), OLX Group (15), PatriotList.com (16), Poynter Institute (18), Realtor.com (18), Recruit Holdings Co. Ltd. (18), RentHop (10), Schibsted (17), Scout24 (2), Skytel (4), Uber (12), Vendr (16), Vibelyst (16), Wallapop (15), Workopolis (18), ZipRecruiter (15), Zumper (15). Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •7
Vol. 20 No. 1 – Jan. 17, 2019
Craigslist: The billion-dollar behemoth
is the latest California Gold Rush
• 2018 revenue topped $1 billion, the AIM Group estimates
• Prices remain stunningly inexpensive; ads are just $3 to $75
• It’s not a not-for-profit company, despite the dot-org URL
by Peter M. Zollman Craigslist has cracked a billion dollars in annual revenue.
Cheap prices and a familiar At 23 years old, with about 50 employees, the San Francisco-
interface keep pulling in based company is a bigger gold rush than the original 1848
revenue despite mounting
California Gold Rush at Sutter’s Mill. With profit margins
competition
probably close to 90 percent, it’s made founder Craig Newmark
and CEO Jim Buckmaster, the sole owners, massively rich.
And yet. And yet. The company – which has never attempted to
maximize profits, even though its dot-org URL falsely leads
many people to believe it is a not-for-profit company – could
probably increase revenue by six or seven times without a blink
of an eye, and make many users happier because it would work
better.
After an extensive review of Craigslist ad counts in almost 90
markets – large, medium and small - the AIM Group estimates
Craigslist revenue for 2018 at $1.034 million. Large markets
accounted for the vast majority of the revenue - $981 million.
Mid-size markets delivered $44 million; small markets, just $10
million. (A detailed outline of our methodology is on Page 13.)
The billion-dollar figure represents growth of 45 percent from
our estimated revenue of $693.7 million in 2016, which was a
whopping jump of 75 percent from $396.3 million in 2015. (We
did not provide a 2017 revenue estimate, for technical reasons.)
Large markets account for 95 percent of revenue, primarily
because they carry the highest number of ads at the highest
prices; medium-sized markets account for 4 percent, and small
markets are just 1 percent of the total.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •8
Vol. 20 No. 1 – Jan. 17, 2019
Revenue up – traffic dropping steadily ranked as the No. 15 site by traffic in the
United States and No. 56 globally. More
While Craigslist’s revenue has been soaring than 93 percent of its traffic comes from
- for reasons we’ll explain in a minute - its within the U.S.
traffic has been dropping steadily since
about 2015. Factors behind Craigslist’s traffic decline
In March 2018, SimilarWeb credited Why is traffic declining?
Craigslist with 650 million total visits; in
April, it dropped to 525 million. By We don’t know for sure, but here are five
November, it had fallen still further to 423 likely causes, among many:
million, although it jumped slightly in
December to 450 million. Still, Craigslist is • The elimination of personals. Craigslist
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •9
Vol. 20 No. 1 – Jan. 17, 2019
Source: Andrew Parker, 2010. Reprinted with permission
• dropped personals in March 2018 after • important alternative to Craigslist,
the U.S. Congress passed the SESTA especially since it provides much stronger
(“Stop Enabling Sex Traffickers Act”) / (albeit not flawless) safety and security.
FOSTA Act to make websites liable for
ads involving trafficking on the sites. (It • Other direct competitors like LetGo,
dropped its “adult services” category, OfferUp and dozens of smaller ones. (See
which was largely filled with prostitution article on competitors on Page 14.)
ads, in September 2010.)
• Large chunks of its marketplaces have
• The growth of Facebook Marketplace. been hived off by niche competitors.
Although its 800 million monthly users Everyone’s familiar with that famous
are spread across 70 countries, and 2010 chart by venture capitalist Andrew
include buy-sell users of its Facebook Parker illustrating the growth of Craigslist
Groups, this product has to be hurting competitors like AirBnB, Indeed, Elance,
Craigslist. Facebook CEO Mark RentHop and dozens of others. Now
Zuckerberg said in July that one out of there are probably thousands that could
every three people in the U.S. uses fit on that graphic, if only there was
Marketplace. (For more about Facebook enough space. As the popularity of those
Marketplace and general classifieds, see marketplaces has grown, Craigslist has
our Global Classifieds / Marketplace diminished in importance.
Annual report, CIR 19.11, published in June
2018.) Facebook has become a very • Safety and security are significant
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 10Vol. 20 No. 1 – Jan. 17, 2019
problems for Craigslist. Lots of people, for
good reason, think of it as sketchy. While
millions of transactions have been
conducted safely – I’ve used it myself from
time to time, even though there’s probably
no one in the world more familiar with the
dangers of Craigslist than I am – the
company still lives up to the moniker I
applied in 2011, a “cesspool of crime.” More
about that below, but its dicey reputation
certainly can’t help drive traffic.
Revenue increases – how do they do it?
Craigslist charges for ads in six categories:
• Jobs
• Gigs (part-time work)
• Autos
• Services
• For sale, including tickets
• Real estate – for apartment listings by
brokers and agents in New York City only.
Its prices are remarkably low – from $7 to
$75 for a recruitment ad, $5 per car per
month, $5 for ticket sales by brokers, and
just $3 for for-sale items. Ads by private
individuals (for-sale and cars, for example)
are still free. Only dealers have to pay.
That’s in keeping with Newmark and
Buckmaster’s philosophy: “The deal is, the
site should be monetized as little as
possible,” Newmark told Kara Swisher of
Recode in a July 2018 podcast. “Craigslist is
providing ads that are much more effective,
we feel, for less money.
and by $5 in McAllen and El Paso, Texas, for
“We may be unique in America or even example.
world business, because we are serious
business people … and yet we just Recruitment advertising is the most
remember the values that we learned in lucrative category, by far, on Craigslist. It
Sunday school.” generated 69.7 percent of all revenue in the
90 markets we surveyed. Autos was
In late 2016, Craigslist added fees in a second, at 16.4 percent.
number of categories, but it’s barely raised
prices since then. There was no significant Space to raise prices, improve service
change in most categories, but prices went
up by $5 to $10 in a few markets in Although it goes against the Newmark-
recruitment ads – by $10 in Charlotte, N.C., Buckmaster philosophy, the company could
Denver, Nashville, Phoenix and others, generate considerably more revenue by
making just a few tweaks to its model.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 11Vol. 20 No. 1 – Jan. 17, 2019
It could double or even triple prices on Safety is still a major issue
recruitment ads and probably have just a
minimal impact on volume. Clients say it’s Safety is one of the worst things about
extremely effective; some clients, like Uber Craigslist. Unlike Facebook Marketplace,
and trucking companies, post hundreds or where – at least nominally – you’re dealing
thousands of ads each day in various with friends, friends of friends, or a trusted
markets. They study their effectiveness local or topical group. And because LetGo
closely to make sure they’re worth the and OfferUp are apps that require
investment. They might cut back a little bit if downloads to a specific phone number, and
prices went up, but they still find many of registration, they may be somewhat safer.
their best drivers through Craigslist so Certainly, the geolocation of mobile phone
they’re not about to stop. signals can provide much more accurate
identification of users than desktop use.
Auto ads, just five bucks? Double it and
(Still, there’s no perfect safety assurance.
Craigslist would take in millions more in
Probably the best option is to follow our
revenue from the independent dealers who
advice and conduct transactions at a law-
fill its auto pages. (Some franchise dealers
enforcement office. See
use Craigslist too, of course, but the small
SafeTradeStations.com for more about that
independents are its bread-and-butter.)
initiative.)
Likewise, increasing the fee on for-sale ads
It’s not Craigslist itself, of course; it’s the bad
by dealers from $3 to $5 or $6 would add
actors who use it for robberies, rapes, rip-
millions more in revenue.
offs and much worse. But as of the end of
2018, law enforcement officials had linked
Ironically, lots of Craigslist advertisers we’ve at least 128 killings to Craigslist since the
spoken to say that when it adds fees for the first was recorded in 2007. Philip Markoff
first time, the service improves. Fees cut was the first person to earn the sobriquet
down on the need to repost constantly to “Craigslist killer,” for killing Julissa Brisman
stay near the top of the list, and cut the in Boston in 2009, but dozens of “Craigslist
number of spam and bogus ads. And while killers” have been arrested, tried and
presumably no Craigslist advertisers would convicted since. That’s horrific. And while
be happy to see rates go up, its prices are so Craigslist is not the cause of, nor is it directly
low that almost any increase would be responsible for, any of those killings,
tolerable. Heck, even if it doubled the price Newmark and Buckmaster, its two owners,
on every ad, they’d still be pretty cheap. are both good-hearted, well-meaning,
(Don’t worry; it won’t.) honorable, extraordinarily wealthy guys.
They created the ethos out of which that
Also: Craigslist could launch its own app. A mayhem occurs. They could do much, much
handful of apps have been licensed by more to strengthen safety and security of
Craigslist to improve the mobile experience the site, and of their users.
and search across markets, for example, but
none are well known and none appear to
have gained much traction. By launching its What keeps Craigslist on top?
own app, presumably, Craigslist could drive
more traffic and thus more revenue. But We wrote this in 2016. It’s still true:
there’s no indication that Buckmaster has
any plans to launch an app. Flip side? He “Ease of use. Market liquidity or critical
could launch one, with or without fanfare, mass. And user-friendliness. Simply put, it
tomorrow. The company never talks about works. “
its plans.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 12Vol. 20 No. 1 – Jan. 17, 2019
Craigslist: Our methodology
How do we estimate revenue at Craigslist? We survey the number of ads in a week in
It’s simple and complicated at the same all paid categories, in each of 62 large
time. markets, 13 mid-size and 13 small markets.
We then multiply those numbers by the
We count ads. As simple as that. Because price of each ad to arrive at weekly revenue,
Craigslist does not offer any contracts, divide by seven and multiply by 30 to
special deals or cut-rate pricing, each ad has project monthly revenue. Next, we multiply
a price attached to it and that’s the price. By monthly revenue by 12 to estimate annual
counting ads in each category and revenue in each category and each market
multiplying by the price of each ad, one can we survey.
come up with a very effective approximation
of its revenue. There are 420 Craigslist markets (147 large,
130 mid-size and 143 small) in the U.S. In
At the same time, it’s a lot more complicated addition, Craigslist charges in three
than when we started estimating Craigslist Canadian markets. Since this is a manual
revenue in 2003. Back then, there was only count, we couldn't count them all. So we
one category with fees – employment – and take the average revenue in large markets,
charges in just 24 cities. Now the company and apply it to all of the large markets we
charges for ads in all 420 U.S. markets, with didn’t count to arrive at total revenue in
fees in five categories including services, large markets. We do the same for the small
autos, for-sale ads of all kinds, and real and mid-size markets.
estate (but only in New York City). Private-
party ads remain free, except in Add them all up, and we have our estimate.
employment and tickets, but dealers pay a
lot more fees than they used to. Interestingly, we checked our numbers with
another research company that estimates
By using a bot and counting every ad during Craigslist revenue in about 80 markets
the course of the full year, we could using an entirely different approach. On the
generate a near-perfect revenue total. four or five comparable markets we
However, that’s a violation of Craigslist’s checked, our numbers were almost identical.
terms of service, and we have no desire to
get a cease-and-desist letter from the We’re clear this is far from perfect. We
company. So we employ a researcher who believe it’s probably a conservative number,
simply counts ads, manually. A second rather than an overestimate. We call it a
researcher spot-checks some of those “projection” or an “estimate,” not an
markets for quality assurance. absolute. But we believe it’s accurate,
understated, and the best revenue number
Our 2018 counts were carried out during available, short of an actual number from
September and October, with a few Craigslist. We asked them, of course, for a
verification checks in November. figure and for comment (as we’ve done
every year). We got no response, as usual.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 13Vol. 20 No. 1 – Jan. 17, 2019
Can U.S. app competitors catch up to Craigslist?
• Well-financed rivals are determined to dislodge Craigslist
• Facebook Marketplace, LetGo and OfferUp are best placed
• Craigslist’s refusal to embrace modern tech offers opportunities
by Brian Blum It’s hard to beat Craigslist at its own game, so competitors in the
United States are trying to one-up Craigslist by changing the
Craigslist’s rivals are rules.
spending lavishly in the
hope of eventually As long as Craigslist declines to release a mobile app of its own
capturing the site’s massive (let alone update its dilapidated-if-still-functional interface), there
revenue will be room for upstarts to innovate and claim that they’ve got
Craig and company on the run.
Do they? Let’s take a look at the current runners-up.
Facebook Marketplace
The most recent Craigslist competitor – and potentially the one
with the greatest chance to do serious damage to the incumbent
– is Facebook Marketplace. Marketplace is already available in
more than 70 countries and Facebook claims it receives 800
million monthly users, although that includes the 450 million
users who were already using Facebook’s existing buy and sell
groups.
Marketplace is baked into Facebook’s main app and website in
the regions where it’s been turned on, meaning it’s hard to avoid
for many of Facebook’s 2 billion worldwide users. Buyers and
sellers can chat by Facebook Messenger and a Spanish / English
translation service within Messenger is available.
Revenue is generated by sellers placing ads via Facebook Ad
Manager. “You can’t run ads just in Marketplace,” Facebook
spokesperson Mike Manning made clear in an interview last year
with the AIM Group. Rather it’s about “extending a campaign that
starts in Newsfeed as an additional placement.”
That multilateral strategy, where sellers can advertise anywhere
across the social media network with a single click and a single
bill, makes Marketplace a near irresistible opportunity for sellers.
From a functional perspective, Marketplace lines up neatly with
LetGo, OfferUp and Mercari: a scrolling Pinterest-like homepage
plus filters to search by categories and location. In October,
Facebook added price suggestions and automatic categorization
using a combination of computer vision and natural language
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 14Vol. 20 No. 1 – Jan. 17, 2019
processing. Facebook says consumer LetGo decide into which category to put an
engagement with listings is up by nearly item you want to sell. LetGo has a chatbot
100 percent since its product index system named Emma that will keep buyers
launched. occupied if the seller is away or asleep.
LetGo’s “reveal” feature provides an instant
Marketplace is not just for private sellers; price suggestion.
the app takes automotive, real estate and
job feeds from a number of high-profile LetGo said its app has been downloaded
partners: Cars.com and Edmunds for 100 million times and has generated 400
vehicles; ApartmentList and Zumper for million listings since it was launched in 2015.
rentals; ZipRecruiter and other job
aggregators for recruitment listings. Based on the size of the most recent
investment, LetGo does not appear to be
If all that’s not enough, Facebook is adding profitable yet. In a 2017 interview on CNBC,
another “marketplace” – online dating. It LetGo CEO Alec Oxenford said: “We expect
was soft launched for testing in Colombia LetGo to be profitable two to three years
late last year. down the line.” So, 2020 could be a make-
or-break year.
LetGo
LetGo got a jump on the competition when it
LetGo received a big infusion of cash in merged with competitor Wallapop shortly
August 2018 – half a billion dollars, some after both entered the U.S. market. LetGo
already in the bank and some promised – has since introduced automotive and real
from its lead investor, Naspers. The estate verticals within the app.
company previously raised $475 million.
That’s not exclusively for the U.S. market, Listing on LetGo is free; the company has a
but as we wrote at the time (see CIR 19.15, premium feature called “Bump” which
August 16), Naspers is clearly signaling places an item above the organic results for
Craigslist: We’re coming. $1.99 per listing for 24 hours.
“LetGo has established itself as one of the OfferUp
most promising startups in the world by
injecting excitement, new technology and A few days after Naspers announced its
half-billion-dollar investment in LetGo, its
fresh thinking into a space that’s lacked all
main app competitor in the U.S., OfferUp,
of the above for decades in the U.S.,” Martin
followed suit with an SEC filing stating that
Scheepbouwer, CEO of OLX Group, said in a
OfferUp was seeking to raise approximately
news release, barely hiding his Craigslist
$150 million. That’s in addition to the
contempt. OLX Group is the Naspers unit
previous $221 million raised. According to
that’s been making its investments in LetGo. the August 2018 filing, OfferUp had already
raised $39 million of that $150 million.
LetGo looks like Pinterest when you first (There have been no further
open the app. (There’s a website, too, which announcements.)
functions mostly the same way.) Scroll to
see if anything entices you to “let go” (of If Naspers was signaling through its
your money, or stuff you want to get rid of) investment in LetGo that it was coming for
or search for specific items or categories. Craigslist, the timing of OfferUp’s new
There are filters for location, price and how investment was more a message for LetGo:
new an item is. You’re not the only app that can challenge
Craigslist.
Buyers and sellers can chat from within the
app. Six billion messages have been sent so “We’re now well on our way to leveraging
far, LetGo says). Image recognition helps our size and reach into building a real
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 15Vol. 20 No. 1 – Jan. 17, 2019
business with significant revenue and a as of July 2018.
clear path to profitability,” OfferUp CEO Nick
Huzar said in a statement. The app has similar functionality to LetGo
and OfferUp,
Huzar added OfferUp is “the largest local
marketplace in the U.S.,” but didn’t offer up including a price-appraisal feature and
any numbers. Online sources put total Pinterest-like scrolling home screen. A
downloads for OfferUp at 23 million in 2017. unique recommerce feature that rolled out
(The company was founded in 2011, a few in 2017 was closed six months later. But the
years earlier than LetGo.) company is still innovating. The latest: the
ability to list items via smart-goggles. Point
Whoever’s on top (and this horse race also your finger at what you want to sell and a
must include Facebook Marketplace with its pop-up window will display similar products
800 million “users”), comparing app and their selling price on an overlay
numbers is tricky: You can’t count unique appearing in your glasses.
visitors for an app as you can at web-based
Craigslist, and there are no app download Listings at Mercari are free. The app charges
numbers for Craigslist because it has no app a 10 percent fee when an item is sold.
(although it licenses a few). Shipping rather than meet-ups are
emphasized, with Mercari emailing printable
OfferUp has a similar interface and shipping labels to the seller.
functionality to LetGo. One big differentiator
came in 2018 when OfferUp added a “Ship In the U.S., Mercari has offices in Portland,
to me” button at the top of the app. It shows Boston and Palo Alto.
users photos of products that are available
for shipping, with fees ranging from $5 to Other Craigslist wannabes
$20. The company charges a 7.9 percent fee
per transaction. There’s one other category of competitors
worth mentioning, but just barely. We call
Another differentiator: OfferUp focuses them YACLWs: ‘yet another Craigslist
primarily on the U.S. while LetGo was global wannabe.’ They are:
from Day One, although it’s only a factor in
two or three countries. • Vibelyst: A ‘social marketplace’ based in
New York City.
Mercari
• AffordableClassifieds.com: A listings site
Compared with LetGo and OfferUp, Mercari’s for cars, motorsport vehicles and other
U.S. operation is the runt of the classified vehicles. Based in Riverside, California.
app litter. It has raised “only” $165 million
(over six rounds of funding), but the Tokyo- • Vendr: A “cashless, local marketplace
based company is far from throwing in a app” based in New York City.
used Bed Bath & Beyond towel.
• PatriotList.com: A website for veterans
Founded in 2013 in Japan, Mercari expanded and first responders, started by a Seal
to the U.S. the following year. It has a team veteran. (Launched in 2017;
European operation as well, but the apparently dead already.)
company says it will discontinue that by
June 2020. Mercari claims the same number • CanYa: A “hybrid blockchain ledger
of downloads as LetGo (100 million), turned service marketplace” where users
although in this case they’re divided “can find, book and pay for services,” that
between the U.S. and Japan (with Japan requires users to load a blockchain wallet
logging around 70 percent of those with cryptocurrencies, convert them to
downloads), and more than a billion listings CanYaCoins, and then search for and buy
services.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 16Vol. 20 No. 1 – Jan. 17, 2019
Did Craigslist kill newspapers? No way.
Did it have an impact? Absolutely.
• Newspapers were responsible for their own downfalls
• Craigslist ‘really helped pave the path for rapid decline’
• ‘Free is a pretty attractive price point, and it’s worked pretty well.’
by Peter M. Zollman Craigslist did not kill newspapers. It did not kill journalism. Craig
Newmark did not kill newspapers. He did not kill journalism.
Craigslist has often been
blamed for killing Let’s be honest about that. Either nobody killed newspapers,
newspapers, but that’s a changing times and media habits killed newspapers, or
gross canard. It just isn’t newspapers killed newspapers. Newmark and Craigslist did not.
true
It’s fair to say that free classifieds hurt newspapers. Badly. But it
was the fault of the newspapers, not Craig Newmark! Does
anyone really believe that newspapers “fell prey” to free
classifieds? If you believe that, look at Schibsted and Finn.no. The
brilliant executives there understood the existential threat,
responded effectively, and created a classified advertising tool
that still dominates in Norway, more than 20 years later. And
Schibsted is now a leading multinational marketplace company.
In the United States, certainly, and later the rest of the world
(most of it, anyway), the problem was that newspapers couldn't
get out of their own way. They faced The Innovator’s Dilemma
and simply rolled over and played dead. They were making too
damned much money from classifieds – waaay too much money
– to ever say, “Wait a minute. We’ve got to figure out better
ways.” Some newspapers ran at 60 and 70 percent profit
margins. (All while paying their poor journalists effectively
minimum wage, or lower when the long hours were factored in.
But that’s a different story.) They were fat, lazy, arrogant and
unbelieving. Most of the publishers I dealt with in the 1990s and
early 2000s were very up front – they were hoping and expecting
to retire before “that internet thing” either ate their lunch (as it
did), or that they expected it to go away. Who would use it,
anyway? Especially to get news?
U.S. newspapers had no competition, or very little. Especially in
classifieds. If you wanted to find a new job, you looked in the
paper. A new home / apartment, the newspaper. A new or used
car, probably the newspaper, too. Rates reflected their
dominance.
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 17Vol. 20 No. 1 – Jan. 17, 2019
Along came Monster.com, Realtor.com and
Autotrader.com, and thousands (probably
tens of thousands) of similar / related /
competitive sites, and Craigslist too. And the
newspaper classified monopoly collapsed.
“I think the Monsters and Realtors and
Autotraders did far more damage to the
newspaper industry than Craigslist,” Gordon
Borrell of Borrell Associates, which analyzes really answered user questions regularly –
data in local advertising, told us. “Craigslist to philanthropy. One of his most notable
was one of those weird little models that causes? Journalism. (He also
said ‘We can do things differently.’ I think it contributes millions to veterans’ causes,
helped the newspaper industry say, ‘That women in technology and voters’ rights
will never work.’ And they were in denial. … protections.)
The damage it did was, I think, more
psychological than actual. … Some people have criticized Newmark’s
donations to journalism because of
“Craigslist did some damage. I think it Craigslist’s impact on newspapers, but he’s
significantly changed the public’s mindset of contributed more than $40 million to
classified advertising, and it really helped journalism projects and programs since
pave the path for rapid decline.” 2015, including a $20 million endowment in
2017 to the City University of New York
Newspapers in Canada and the U.K. were Graduate School of Journalism, which was
used to competition. In some markets, promptly renamed the Craig Newmark
especially metro areas, there were five or six Graduate School of Journalism. He’s also
newspapers. But they rarely competed donated $1 million to the Poynter Institute, a
head-to-head on classifieds. The Globe and journalism research and education center,
Mail in Toronto, Canada, for example, had and to ProPublica.org, a nonprofit news
primarily upper-level and executive help- organization.
wanted ads, while the Toronto Star had
white-collar and mid-level listings. They “Journalism is a mission-critical resource for
joined forces to build Workopolis, which this country,” Newmark, who acknowledged
became the No. 1 recruitment site in Canada Craigslist might have had some impact on
for quite a while – but faded steadily until it newspapers, told Forbes magazine in
was taken over in August 2018 and August. “I’ve learned that a trustworthy
subsumed by Indeed.com, owned by “Big press is the immune system of a
Six” classified / marketplace company democracy.”
Recruit Holdings Co. Ltd. So in Canada, the
U.K. and many other Western markets as Rick Edmonds, media business analyst at
well, newspaper / print classifieds failed or the Poynter Institute (who freely
are steadily dying out, just as they did in the acknowledges he could be considered
U.S. conflicted), told the AIM Group he also didn’t
think Craigslist killed newspapers. “There’s
Newmark, the eponymous founder of sort-of a midway between ‘they killed
Craigslist who really didn’t want to call it newspapers’ and ‘they didn’t.’ I don’t think
that, has pocketed certainly more than a they single-handedly killed classifieds. …
billion dollars in profits. (He’s entitled.) He Free is a pretty attractive price point, and it’s
turned over management of the site to Jim worked pretty well. Craigslist was part of
Buckmaster in 2000, and has moved from that picture. A lot of different verticals (sites)
customer service at Craigslist – yup, he were, too.”
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 • 18Vol. 20 No. 1 – Jan. 17, 2019
Team
Peter M. Zollman, founding principal / executive editor Western Europe Southeast Asia
Katja Riefler, principal / managing director Cila Warncke Marian Jacob
Anastasia Gnezditskaia
Jonathan Turpin, principal / senior consultant
Johanna Wild Asia
Rob Paterson, principal Lars Herlin Tariq Ahmed Saeedi
Yael Schrage
Jim Townsend, principal
India
Pavel Marceux, managing editor Eastern Europe Prabhu Gowda
Andrzej Sowula
Léo Siqueira, director, Latin America Emre Dalkilic Data analysis
Angela Hawksford, director, Asia-Pacific Kalyan Banga
Middle East Xiaolei Xie
Diana Neatu, director of business development, EMEA Ayman Yasser Hilal
Stacey Fink, marketing director Production
China Oskar Luck
Amy Conway, director of sales – North America Tom Marling Oleg Agibalov
Suzanne Lander, finance director Aleksey Belyalov
North America
Robin Monti, client service manager
Brian Blum Artwork
Luke J. Smith, marketing and IT June Arney Robert Dibrell
Africa
AIM Group headquarters: Adegoke Seun
+1.407.788.2780 Louisa-Jane Steyl
402 Spring Valley Road
Altamonte Springs, Florida 32714
EMEA headquarters:
+49.89.6.214.6044
Aschauer Str. 21, D-81549
Munich, Germany
Advanced Interactive Media Group LLC © 2019 info@aimgroup.com • EMEA: +49.89.6214.6044 • U.S. / global: +1.407.788.2780 •19You can also read
