The newsagent role in replacing the Trading Post
Melbourne Trader, the first Trading Post replacement, distributed with the Melbourne Observer, hit the streets a week ago. Former Managing Director of The Age, Stuart Simson is talking up his plans to launch Trading Mart into the classifieds space.
Outside of a common cover price, the two offers are quite different. The Observer offer is made on the back of a successful weekly newspaper with a history of free classifieds. The Trading Mart offer is the traditional Trading Post offer – pay only for ads which generate a sale.
Classified advertisements have moved online worldwide and they are unlikely to return to print in a stand alone form like the Trading Post. Trawling a newspaper for items to buy or sell is so yesterday and so environmentally unfriendly. People like the ability to search and other facilities with an online model. Look at the success of craigslist in the US and elsewhere. Many say it is a newspaper killer. While I disagree, it has become a lightening rod for drawing everyday classified online.
I think that the free classifieds offer with the Melbourne Observer will work because of already strong distribution and a loyal customer base. The keys are free ads and that they are included within the existing successful product.
I am skeptical about the prospects for Trading Mart because of the considerable capital required to launch, that it is a stand alone product without any other traffic drivers and that they appear to be relying on newsagents to drive advertisement acquisition.
I am biased against print when it comes to classifieds. After considerable research, I spent in excess of $750,000 on FindIt between 2005 and 2006. FindIt was an online classified model to be launched in partnership with newsagents. Despite attracting in excess of 20,000 advertisements and a hundred or so genuinely supportive newsagents, I pulled the plug because we did not have sufficient newsagent support to reach the critical mass necessary and because we had made a mistake in how we connected online classifieds with a bricks and mortar retail network.
While newsagencies are a natural hub for a classified offering to the less online-connected demographic, they will need to demonstrate genuine engagement for a stand alone classified offer to work – far more engagement than ever before and beyond just selling the newspapers. If they want the traffic from Melbourne Observer and Trading Mart sales, they need to ensure their success on a variety of fronts.
The Trading Post has the same retail space allocation as the Herald Sun newspaper in my newsagency. The gross profit it generates is only 3% of that of the Herald Sun. In a cash-flow sense, allowing for the cost of real-estate and labour, the Trading Post is a loss making title at least at Forest Hill, Victoria. Beyond the financial return is the efficiency.
Interesting to read an Editor& Publisher 