Users First

There’s been quite a bit of talk over the past few days about some remarks that Jim Buckmaster, an executive at Craigslist, made at a media conference in New York last Thursday.

It seems that Buckmaster stated that he has no intentions of “monetizing” his online classifieds service with any sort of advertising. The room full of ad and media folks apparently looked at him like he had a second head.

Why no ads? Get this….It seems that Craigslist’s users haven’t expressed an interest in seeing ads…..Mmmm.

First off, they ARE making money…( a few million a year). They just aren’t doing it with “ads”. Craigslist does a fabulous job of hitting the sweet spot on pricing. The rates they charge for job and for-rent ads in a few of the many cities they serve are high enough to pay the bills, keep other sections and cities free, and still make a very respectable profit…but the price is low enough that competitors can’t keep up.

And that may be one ulterior reason that Craigslist is still ad free. Their success is coming out of what used to be spent in newspaper and other print classifieds. Craigslist may be handing out the free classified smack to get people addicted. When the local newspapers decide that the classifieds aren’t worth the dead trees and ink, the papers will discontinue their classified business. At that point, Craigslist may suddenly decide to monetize their monopolistic position with ads or other items.

But there may be a more pure motive.

Maybe they understand that the user/consumer/reader is what “monetizes” the business. Maybe they see that the most effective long term marketing strategy is to grow a base of dedicated loyal users.

Maybe they realize that a clean uncluttered useful page invites people to return and build loyalty to a site. They see that the customer (the single most important element of a business)should not be harassed by pop-ups & pop-unders, irrelevant email, interstitial ads, floating & expanding ads, trick banners, and everything else that webmasters slap onto a website to make a dollar today…only to cost them $100 dollars tomorrow. They see that you can train a customer to mistrust ALL the content on your page because you’ve tricked them too many times into clicking.

Maybe Craigslist sees that simply because you CAN place an ad on a web property (or any place), doesn’t mean that you SHOULD.

It’s a lot like the story of the goose that laid the golden eggs. The biggest mistake that alot of today’s web (and brick&mortar) businesses are making is developing short term strategies that kill long term gains.

But why worry about tomorrow…when you can make 58 cents today off an AdSense sidebar?

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