Australia now has several online general classified offerings and none more interesting than Cracker. This is a Fairfax owned business.
Fairfax publishes newspapers and relies on advertising revenue from these newspapers so it is interesting to watch their Cracker play. Plenty of Cracker content is fed across from Fairfax newspapers. Some Cracker categories connect across to Fairfax commercial websites – Domain, Drive and Mycareer.
It is an interesting strategy, competing with oneself. There is no doubt many businesses have been successful riding a tsunami on a surfboard and from the front. It sure beats getting swamped while your back is turned. The Fairfax strategy is better than what most publishers around the world are doing in response to the online advertising juggernaut.
Cracker looks like Craigslist. However, given the way it attracts new content and is fed content from Fairfax commercial sites, it is of more interest to readers than Craigslist.
In competing with itself, Fairfax is also competing with their traditional supply chain. They are offering an online only service which competes with and leverages off Fairfax products sold through newsagencies and other retail outlets supplies by newsagencies. It would be interesting to see how Fairfax would react if newsagents directly competed with them I this way.
Where the Fairfax model fails consumers is in the areas of high volume classified advertising – real estate, auto and employment. For these you have to use the Fairfax commercial sites and pay their rates – rates which are priced to protect revenue streams newspaper publishers became used to when newspapers were the only medium for such advertisements. The advertising pricing model should reflect pure online play and have no obligation to the broader Fairfax organisation. It’s only this pricing model which will attract consumers without support from existing Fairfax publications and websites.
With other sites now developing free and low cost online only plays which do not hold any obligation to a mainstream media operator (monkey; gumtree) and therefore do not follow a higher price model, Fairfax will be under pressure on its pricing.
The Australian classified advertising space is ripe for fundamental change. Consumers are paying too much for advertising. As news spreads here is lower prices overseas others will enter this space and play and draw attention to our out of date pricing models.
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