EcommerceBytes-NewsFlash, Number 939 - January 25, 2005     3 of 7

eBay Drop-off Stores Threaten Newspaper Classifieds

By Elisabeth Townsend

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As newspapers face competition from online classifieds services, some may be fighting back by denying space to certain advertisers. One eBay drop-off store owner said that's exactly what happened to him.

Erik Vignau said The Oregonian, a Portland, Oregon newspaper, refused to renew an ad from Bid Brothers, the town's first eBay drop-off store, in December 2004. Bid Brothers is a brick-and-mortar store that sells items on eBay for customers on a consignment basis.

Vignau, Bid Brothers co-founder, first ran a two-week advertisement at the end of October. It wasn't a classified ad, but "a small ad in the living section, (that we) thought people would see and respond to," he said. "The response was phenomenal!"

So Vignau, and his partner and co-founder Denis Burger, Jr., decided to continue the ad and prepared to spend $2000 a month with The Oregonian. He called his newspaper sales representative to discuss making some small changes to the ad but he didn't get a response.

After four days, Vignau called the sales manager only to find that his ad had been pulled. That's when he called the paper's president Pat Stickel.

Why the change of policy? Because it competes with the paper's classified revenues, according to Vignau, who said Stickel said he had the right to refuse ads from anybody. Without success, he said, he tried to convince Stickel that his business was "the same as any other consignment store" that advertised in the newspaper.

AuctionBytes attempted to reach Stickel for comment. Stickel's personal assistant explained that Stickel was on vacation, and said the only comment from the Oregonian would be, no comment. When asked about the newspaper's advertising policy, she referred AuctionBytes to the advertising director, who did not return calls seeking comment.

"We never thought we were competing with the classifieds," explained Vignau, who will take any item worth $50 or more that he can effectively market and sell on eBay. "We sell 95 percent of our items, (but) classifieds don't have sell-through statistics."

Online classifieds are harming newspapers revenue, according to a report by Classified Intelligence LLC. It said that Craigslist is costing newspapers "untold millions" in merchandise and real estate advertising.

According to Bid Brothers co-owner Burger in a press release, "...classifieds just aren't right for a lot of people. Many of our customers are seniors who prefer not to answer the phone or open the door to strangers. We never saw ourselves competing with The Oregonian. We're just a small, local company offering a service that people want and need."

This isn't the only time a newspaper has reportedly refused to take an eBay drop-off store's advertising.

"Sure, you can find other instances where newspapers tend to do this kind of thing," said Steve Outing, senior editor at the Poynter Institute for Media Studies. "It's not a terribly enlightened thing...but inevitable."

Both Peter M. Zollman, founding principal of Classified Intelligence, and Outing agree that the classified advertising industry is shifting and it could learn from Craigslist and eBay.

"Classifieds and personal merchandise are changing," said Outing. He believes "eBays of the world are leading the way."

When Outing heard about The Oregonian brouhaha, he predicted in a weblog on the Poynter website: "Bid Brothers will get enough free publicity from the rejection that it will do more business as a result than if the Oregonian had accepted its advertising."

Meanwhile, Bid Brothers is "getting offers from all the other papers" to advertise with them. Not only did they decide to spend about $500 each month in local community newspapers ads, they also decided on a different strategy. They bought an ad on KGW television (Channel 8), which is running three to four times during the morning news.

Though he hasn't quantified the reaction, Vignau said he has been getting a "great response—many calls, many customers."

About the author:

Elisabeth Townsend is a freelance writer specializing in food, wine, travel, and feature writing, and photography. She took her writing, editing, and photographing skills into the freelance journalism world after 13 years of business experience including corporate communications.

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