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KSL.com had some important advantages. First, it started early, shortly before Craigslist came to Salt Lake City. And because it was a TV station’s website, it wasn’t perceived as competitive by its existing staff; there was no classified-ads manager to complain about giving away a lucrative revenue stream. “KSL didn’t have legacy products that were competing with this service,” says Chris Lee, general manager of DeseretNews.com. “If they wanted to do cars, there wasn’t someone saying, ‘But we’re already doing cars!’”
The site also demonstrated a keen sense of its audience—which shouldn’t be a surprise, given the church ownership. Managers tried to be especially vigilant about keeping the site clean (“no way were we going to allow prostitute or massage ads,” Gilbert says) and detecting fraud.
KSL.com also committed to “letting our users develop the product with us,” Gilbert said. For instance, in the spring of 2011, KSL.com asked its readers what kinds of firearms they thought the site should allow to be sold. It also asked them, “How often do you believe people are using the KSL Classifieds Firearms and Hunting section to circumvent firearm laws?” Users help police the site for bad actors. Anonymity isn’t allowed: “Sellers had to have an identity,” Gilbert said.
The classifieds give KSL.com an unusually high level of engagement. According to according to Mike Petroff, vice president of new media sales, the site gets around ten million page views from 250,000 users on an average weekday, for a stunning daily rate of forty page views per visitor. (The ads don’t appear on the newspaper’s site; the Deseret News shares business, but not newsgathering, operations with The Salt Lake Tribune, owned by MediaNews Group.)
Most ads expire after thirty days. Even with such a short lifespan, there were more than 206,000 listings on a typical day in March 2011, in categories ranging from goats to muzzleloaders, from paintball equipment to bands seeking members.
Gilbert came to Salt Lake City in late 2009 after a career that included a professorship at Harvard Business School, where he worked closely with Clayton Christensen, author of The Innovator’s Dilemma, a well-known book about disruptive change. The two of them collaborated on the “Newspaper Next” project, a 2006 study sponsored by the American Press Institute to encourage innovation. Gilbert was hired by Deseret Management Corp.’s president and chief executive officer, Mark Willes, who had a troubled reign as CEO of Times Mirror (1995-2000) and publisher of the Los Angeles Times (1997-1999).
One of Gilbert’s main goals was reflective of a tenet of Christensen’s philosophy: “Business units don’t evolve; corporations do.” So Gilbert separated the digital sales force to enable it to take more risks. He said that KSL.com had been “run through the mainline channel—the TV. The [ad] sellers would have an afterthought to also sell web. They’d throw it in if you also bought TV.” The new company “created a profit-sharing relationship with the legacy organization. They’d benefit from our growth—but they didn’t control it.”
KSL.com’s revenue grew 75 percent from 2009 to 2010, executives say, though they don’t spell out numbers. Gilbert says his company will continue to push on both the cost and the revenue sides of the equation: “News is expensive,” he says, and audience loyalty is key. “You can’t get two clicks and expect to pay off on that investment.”
For decades, there has been a connection between the journalism that news organizations provide and the advertisements that generate most of their revenue. Whether it’s a glossy spread that runs before the table of contents in a fashion magazine, or the anchorman’s “more after this message” assurance on the local Eyewitness News, ads and content have always been closely linked in the stream that appears before the consumer.