Long a lucrative source of income for newspapers, classified advertising has been migrating to the Internet. Publishers have launched their own online efforts, but they are having difficulty competing with sites such as Craigslist, which provides free classifieds. If newspapers want to reverse their fortunes, some say, they’ll have to change their approach to classifieds. One company offering an alternative is Creative Circle Advertising Solutions, a tenant of the Center for Design & Business incubator in Providence. Creative Circle has created adQ, a Web-based front end for classified advertising. This month, Providence Business News spoke with CEO Bill Ostendorf about the adQ technology and the state of classified advertising.

PBN: You’ve described adQ as the first true e-commerce solution for newspaper classifieds. What do you mean by that?
OSTENDORF: For 20 years I’ve been doing consulting to newspapers. For one of our clients, we looked at all the available ways of taking classifieds online, and all of it was garbage. All basically had a big box that said, “Write your ad here.” We found that 70 to 90 percent of the people who started to place a classified ad in a newspaper online gave up. That’s way too high. So I had this idea to create something that would help people write their ads. The vast number of people who call a call center at a newspaper call and say, “I have a car. What should I say?” Giving them a blank box … doesn’t help them. The purpose of this software isn’t to take in data or take in ads. The purpose is to make sure good ads are written – ads that sell are written; because the job of the newspaper isn’t taking classified ads. The job of the newspaper is selling your stuff.

PBN: Craigslist seems to have done all right just putting a box up and saying, “Put your ad here.” What advantages does your system have?
OSTENDORF: Craigslist is mostly free, but … the vast majority of people wouldn’t use it. … And if they did use it, they’d write a bad ad, one that’s not complete or won’t sell very well. Newspapers and media sites want to charge for advertising, so they have to give you something more. What they give you is promotion and distribution. They have a lot of eyes coming to their news. One of the other values they should bring is they should help you write your ads. Our software does that and adds value that makes it viable to charge 25 bucks for an ad when others are charging nothing for theirs. We’ve written hundreds and hundreds of tips, and we’re still writing. We have writers who look at classified ads and brochures and think about everything you can say about a product and put them in drop-down menus that are ready for you when you write your ad. Eventually, if you want to sell your cat or your dining room table or your car or your hockey equipment, we’ll help you make sure you word that ad appropriately.

PBN: You mentioned that television stations can use your product?
OSTENDORF: Channel 10 [WJAR] is a pioneer at this. They were the first station to buy adQ. It’s an interesting twist. We developed this to help newspapers, and its ease of use allowed a TV station to get into the classified business. I think television stations are going to become major classified players because their Web sites are getting a lot more hits.

PBN: One of your selling points about adQ is that it’s poised to take advantage of the next round of technology advances. What advances might that be?
OSTENDORF: Classifieds are going to be distributed in a lot of different ways. They’ll be combined with GPS. You can be driving through a neighborhood with your car and through your cell phone or navigational system call up all the houses for sale in it within a mile of your current location. Or you could go to a Web site and say, “I’m looking for this kind of car at this price in this region” and your phone would go off when someone places an ad that meets your requirements. Because our technology is open source, it can talk to any technology, so we’re in a position to be an interface for anyone who wants to be in the business of posting information about stuff.

PBN: To counter competitive pressure from the Web, the newspaper industry has adopted an “if you can’t beat ‘em, buy ‘em” strategy. Will that address the problems facing the industry?
OSTENDORF: Newspapers need to focus on improving the product. … They’re cutting staff. They’re not investing in new technology to improve their products, print or online. … They aren’t dying. They’re committing suicide. Anyone who studies change and disruptive competition knows you can’t manage your way out of that by cutting. You have to manage your way out of that by innovating.

Editor’s Note: Bill Ostendorf’s Creative Circle Media did a redesign of the Providence Business News in 2004.