INFOTECH: Open Season In The Classifieds Industry
Recent Western Cape Business News
It’s open season in the classifieds industry, with lots of big-name international players moving in and lots of exciting changes on the horizon.
“The classifieds industry is very much a hunting ground at the moment because there is such massive interest in classifieds, specifically online, which represents huge growth opportunities for internet players. There have been a number of new entrants to the market and we are certainly seeing more and more big-name, international companies moving into the local industry.
“We are also seeing some consolidation with a few acquisitions of smaller brands by bigger global companies. Then, there are online classifieds providers that are consolidating their vertical sites and those which are looking to diversify their offering with more niche sites, all to win-over a bigger piece of the pie. It’s frenzied excitement all around,” says Junk Mail Publishing Group’s Managing Director, Felix Erken.
He says that it’s pleasing to see the market stimulated, active and growing after the recession.
“The recession made things tough for classifieds companies, especially here at home, as many of the markets which traditionally utilise classifieds, such as the motoring and recruitment markets, have been badly hit by the economic slowdown.
“Our recruitment and motoring advertising revenues for instance dropped by 20% in 2009. Fortunately, this decline was offset by our massive market share growth online following the launch our new online business strategy,” says Erken.
In 2009, Junk mail Publishing Group revised its online business strategy, dumping subscription fees, allowing unlimited access to all adverts on www.junkmail.co.za and www.capeads.co.za, and making the placing of adverts online absolutely free. The company also overhauled its internal mechanisms so that all adverts appear on the websites immediately after being placed.
Since then the number of unique users has rocketed by 500%. In addition, Junk Mail has climbed to sixth position on the South African Online Publishers Association (OPA) ranking – up significantly from 17th position two years ago (the OPA ranks websites according to the number of unique visitors they receive). It is also now ranked in the top 10 000 websites according to Alexa’s Global Traffic Ranking and 38th according to its South African Traffic Ranking.
Erken anticipates that there are more big changes on the horizon for the classifieds market here and abroad.
“The dust has yet to settle. We are going to see more consolidation in the industry as well as the monetisation of classifieds services. And, there are still going to be a number of new entrants to the field.
“Technology advancements and broadband capacity improvements will also play a big part in re-shaping the online classifieds industry. These enhancements will change the way users use the web and online classifieds forever. For instance, the use of videos is going to take off. For local players, getting the infrastructure in place to support new technologies and meet consumer demand for more functionality is going to be a challenge. But, we’re up to it.
“The print classifieds market will continue its slow decline, as it has for the past 11 years. Fortunately, the print medium can still hold its own in South Africa so we will still get some mileage here.”
For the Junk Mail Group, staying ahead of the pack comes down to effectively leveraging the strengths of its print, online and mobile channels – and managing its exponential online growth.
“We’ve got one of the strongest mixes of online, mobile and print classifieds services in the world, and certainly the strongest in South Africa. We’ve got ten print titles, all with websites and all with mobile versions.
“We’re focused on delivering a premium quality, unrestrictive service to our customers. If they continue getting a ‘beaut’ experience with us, we’re confident that we can keep them, and their children, and their children’s children, happy.
“We have a few tricks up our sleeves, but for the immediate future, we have to ensure that we manage our online growth efficiently,” he concludes.
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