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• Classifieds Traffic Soars in Recession

Classifieds Traffic Soars in Recession

Visits increase 84 percent in February 2009;
Industry lends itself to a long-tail strategy

New York, NY  - April 1, 2009 - U.S. online traffic to Classifieds Web sites increased 84 percent in February 2009 compared with last year, according to a new report from Hitwise^®, an Experian company. The industry has experienced positive month-to-month growth in share of U.S. visits in all but one month in the past three years. As the state of the U.S. economy has worsened, visits to Classifieds Web sites have continued to climb, up 28 percent from December 2008 to February 2009.

"Consumers have embraced free classifieds as a way to generate income by selling personal items, while others take advantage of the deals available at the fire sales," said Heather Dougherty, Hitwise research director. "Currently the economy is driving the growth among online classifieds, but satisfied buyers may continue to turn to the Web sites when researching purchases."

The growth is fueled by the increase in visits to Craigslist and localization of existing classifieds. To better understand and communicate the category's growth, Hitwise created two custom categories within its report: Craigslist Cities, which includes more than 300 local versions of Craigslist, and All Other Classifieds. The chart below plots the market share of U.S. visits to these two categories over the past year.[1]

The market share of U.S. Internet visits increased 90 percent to the Craigslist Cities custom category year-over-year in February 2009, while visits to All Other Classifieds grew 22 percent. Visits to All Other Classifieds had been declining for most of 2008, with visits starting to increase in January and February. This trend suggests that the worsening U.S. economy may be boosting visits to classifieds Web sites and contributing to the recent uptick in visits to both Craigslist Cities and All Other Classifieds.

Craigslist dominates the classifieds industry
Among the top 100 Classifieds Web sites, all but three were localized sites for Craigslist (i.e., dallas.craigslist.org). This is a significant change compared with February 2008, when there were 12 sites in the top 100 that were not Craigslist properties. This increase in traffic may be attributable to new localized versions and also an increase in visits from lower income groups.

Craigslist attracts wealthier households, but recent growth is visible from lower-income groups. Analysis of demographics of the Craigslist audience reveals that those earning a household income of $150,000 a year or more were 68 percent more likely to visit a Craigslist Cities Web site than All Other Classifieds Web sites in the four weeks ending Feb. 28, 2009. However, the site's recent growth is being fueled by lower-income segments, suggesting that Craigslist may become less of a destination site for wealthy people and more of a necessity for lower-income groups as the economy continues to sour.

Search provides an acquisition opportunity for classifieds providers
Classifieds providers tend to receive a far smaller share of traffic from search than the average category and are also far less active on paid search than average for the retail category. Hitwise analysis also reveals that search terms sending visits to classifieds Web sites tend to contain more keywords than average for retail Web sites, presenting opportunities for lower costs and potentially higher-qualified search traffic. While high-price, high-volume keywords can discourage any new entrant, the classifieds industry seems to lend itself particularly well to a long-tail strategy.

If you want to read more, access the full report here.

^{[1]Note that visits are plotted on two different axes to allow for comparison between the much larger Craigslist Cities category and the smaller All Other Classifieds.}

About Hitwise
Hitwise, an Experian company is the leading online competitive intelligence service. Only Hitwise provides its 1,500 clients around the world with daily insights on how their customers interact with a broad range of competitive Web sites and how their competitors use different tactics to attract online customers.

Since 1997, Hitwise has pioneered a unique, network-based approach to Internet measurement. Through relationships with ISPs around the world, Hitwise's patented methodology anonymously captures the online usage, search and conversion behavior of 25 million Internet users. This unprecedented volume of Internet usage data is seamlessly integrated into an easy-to-use, Web-based service, designed to help marketers better plan, implement and report on a range of online marketing programs.

Hitwise, an Experian company (FTS: EXPN), www.experianplc.com, operates in the United States, the United Kingdom, Australia, New Zealand, Hong Kong and Singapore. More information about Hitwise is available at www.hitwise.com.

For up-to-date analysis of online trends, please visit the Hitwise Intelligence - Analyst Weblogs and the Hitwise Data Center.