GOOGLE is facing the greatest challenge yet to its might in Australia as two of its largest media customers threaten to pull their business over the internet company’s decision to enter the real estate listings market.
This is the opening paragraph of a story from the Sydney Morning Herald yesterday. The opening paragraph could easily have been: News Ltd and Fairfax face a tough challenge from the move by Google into real-estate advertising.
The SMH article raises the prospect of the publishers boycotting Google. Hmm, newsagents have suffered poor treatment at the hands of publishers many times over the years. I wonder how they would have reacted had newsagents boycotted them in an effort to resolve a dispute.
The Inquisitor also has a good report about this story.
Google, or the Internet more widely, has won the battle of advertising platform of choice for real-estate, motor vehicles and employment. This was won several years ago. Any action by newspapers today to block or slow the migration will be futile.
The AIM Group in the US, has recently published a report on the state of classified advertising there. The report includes the results of a poll claiming that nearly 6 out of every 10 real estate agents polled think newspaper advertising is useless. I’d note, however, that the US situation is quite different because of the entrenched position of craigslist, the (mainly) free online classified site. While craigslist is here, it is yet to gain the same traction it has in the US.
This is why newspapers and newsagents need to find traffic and revenue from non classified advertising sources. It is why I invested $750,000 in Find It a free online ad portal designed to drive traffic to newsagencies. I pulled the plug on Find It mid 2008 due to lack of engagement from newsagents and their associations.
Google is not facing a challenge. Newspapers face the challenge. By association, newsagents face the challenge. Newspaper publishers and newsagents show no sign of understanding this yet.
How was Find It suppose to work?
Michael, We developed the platform and initially offered it to newsagents to sell ads for commission. Given slow uptake we offered 100% commission. But less than half the ads cost anything. It was an excellent opportunity for newsagents to play online and be the go to location in Australia for this. There is plenty in the blog history on this.
“The best laid plans of mice and men….eh?
If you want to see how Google new real estate offering can be used, check out http://www.baseestate.com. This move into real estate by Google can be a real disruption to the business model of the big portals and they are worried. The portals need Google more than Google needs them, more than 70% of traffic to portals such as these comes directly from Google. They seem to forget it is agents who own the listings, not them.
“They seem to forget it is agents who own the listings, not them.” – Craig
Hello.
And we thought the big papers just owned li’l ole us. We are forced to tow their lines and they keep getting away with it.
How refreshing to see that they’re being taken on from an unexpected direction, and having ownership of someone else’s bread and butter challenged.
Irony is cool.
I think a few more newsagents then you think are aware of the trend and are doing something about it.
What they are doing is disconnecting thier business from newspapers, ie giving up delivery runs, removing newspapers from prime positions instore, removing external signage that is unpaid advertising for publishers. We have done all this and more to a point that newspapers only make up less then 10% of our business, and if we removed them all together my shop would not skip a beat.
Do not be fooled into thinking the only way a newsagency business can survive is by selling papers. We are at a point that the term “newsagency” is doing us and other retailers a disservice, because it gives customers the wrong perception of what we do. We are retailers and not simply paper boys and girls.
Google has snuck under the gaurd of the paper companies and to tell you the truth good luck to them. I still call myself a newsagency because I offer my customers news by way of instore news, internet access, magazines and yes newspapers but I am so much more then that.
Luke,
This is an amazing revalation. Obviously you do not have a loan against your investment (newsagency)for you are not courageous enough to take down the sign “newsagent” or stop selling the product that is not a major “pull” any more How sad to have such a double standard when I thought for a moment you were going to show some light to the future and take retailing somewhere, instead we get more of the obvious without resolve.
Graeme, I agree with Luke. The newsagency shingle does not have the value it had in the past. Today, it means too many things. This is where the brands under which we trade: enwsXpress, Newspower etc are more important than the type of business.
I would think many branded stores have done away with using the word “newsagency” altogether. We haven’t used it in any marketing, documents, etc in over 18 months. The word “newsXpress” has been substituted into every instance of the term “newsagency”. We have found that it has helped distinguish ourselves in the local marketplace. We no longer get grouped with all other newsagencies by consumers.
When was the last time you heard McDonalds refer to themselves as a “the take-away”? or Video Ezy as “the video shop”? or Dan Murpheys as “the bottle shop”? They remove themselves from industry lables for a reason.
Mark,
My point is exactly that. So isn’t it time to reinvent ouirselves and brand differently? David Jones is after all David Jones. W.H Smiths-Harvey Norman. If one is not satisfied re Brand and leave the paperboys and girls to themselves. Plenty of scope there.
Graham, I have a loan against my business and I can assure you newspapers do not cover the repayments. If you are of the opinion that newspapers are the “pull” to your business and everything else is an add on then you are doomed to fail. Our product mix, and service is what pulls our customers not newspapers. You obviously sell a sh#tload of newspapers to cover your wages, expenses and good luck to you, I’ll let you get up at 3am and struggle throught the day if thats what you do? We have operated our business for 20yrs and that is why I still call myself a newsagent, I do not have any signs up out the front stating newsagent, I have removed the big N from the shop as well and I’m not going to stop because older people like you will not let go of the past.
We actually got knocked back for a loan under newsagency because the bank stated the security was not there but reapplied under retail only store and got it, I cannot see the profit in newspapers and that is what I am interested in. I’m sure you are of the opinion that if we lose lotto then we will all go broke, how about we have more faith in ourselves.
Stay positive Graham, it will be younger people that will keep our industry alive, but the industry is not all about newspapers.
Can anyone give me a clear definition of what a “newsagency” is?
According to many around here, a newsagency is soley a lotto agency. Pity for them that we aren’t
😉
Luke,
I think a newsagency is a milk bar, a relic of the past. I have servered the newspaper nexus as well so my business does not rely on just one product anymore. I have wrestled with what the newsagency of the future should be called but so far have come up dry. NewsXpress will do me forthe short term but I think we will all need a new path within as close as 5 years.
Luke
A newsagency is a hole in the wall of a building where ‘mum & dad” drag their sorry arse in at some ungodly hour and unpack and stock their goodies for the trade ahead. Then they attempt to smile and greet their $2 customers and pocket their 8% profit. At the end of the twelve hour shift they pull down the rattley roller door and pick up a six pack and a bbq chook from Woolies and head home until the next ‘Ground Hog Day’ starts.
G, I used to be like that, but now I open when it is profitable for me to do so and shut the doors when it is no longer profitable. Yes I still get to serve the $2 customers and smile as they talk rubbish and still work our 12 hours but now I also get the $100 customers that come back on a regular basis, these are the customers I am building my business on not the sparrow fart walkers that buy a paper and walk out. Do these people have a bed wetting problem?
We work on the 80/20 rule and concentrate on the 20% that will continue to help my business grow, we still offer great service and products to the 80% but that is not our future.
I hope this industry has not made you bitter G, just treat people as they treat you and if that is without respect then so be it. There are good customers out there, we have found them after a long search.
This is a great retail industry but it is changing, get on board and change with it.
the name “newsagency” was/is still a strong brand.
Eric,
The name “newsagency” isn’t a brand. Its a generalised shingle. It isn’t strong. It is WAY past it’s used by date. Even the most basic evaluation of the shingle would show it lacks many key elements of a strong brand.