This story is a perfect example of what is wrong with business media in the US. Remember a few months ago when Craig- the guy who runs Craig's List - was on the cover of everything? He was giving his opinion on how newspapers should change, he was telling anyone who would listen that he didn't want to make a profit and was just in it to find good homes for couches, that kind of stuff. It was always clear that the adult industry was an important advertising base for Craigslist but no one was reporting that ONE-THIRD of his total revenue was being generated, essentially, from escorts! ONE-THIRD - according to this article, $45 million dollars a year. I am waiting for Wired Magazine to put that on the cover. Is he still a genius? Should we still listen when he tells print publications how they should change?

Craigslist Adult Services Closed Down Worldwide

Under pressure from several state attorneys general, online classifieds company Craigslist shut down its “adult services” category—estimated to have made up as much as one-third of the company’s revenue—in the U.S. several months ago. It didn’t go quietly—the company put a big black “censored” bar up where the adult category used to be for a few days. Now, the company has shut down its adult services category worldwide without any fanfare.

The adult services ads, which had cost $10 each to post in the U.S., were a significant portion of the company’s revenue—almost $45 million of the $122 million in revenue the company would have made this year, according to one estimate. (That’s a mid-year estimate that doesn’t factor in any losses from the adult category shut-down.) The estimates don’t break down international versus U.S. revenue.

Backpage.com, a Village Voice Media online property that offers ads for adult services and escorts, is estimated to have revenues of $17.5 million.

The news was confirmed by outgoing Connecticut Attorney General Richard Blumenthal, who told The Associated Press that Craigslist told him about the move Tuesday. Blumenthal, a Democrat who was recently elected to the U.S. Senate, has railed against Craigslist for some time, saying the company’s adult services category enables prostitution. He’s also gone after Google for its privacy policies.

Other attorney generals have gone after the site as well, including South Carolina attorney general Henry McMaster, who tried but failed to bring a criminal case against the site. 

This story in the Wall Street Journal on the pressure being placed on large ad agencies by their clients to reduce fees is really worth reading, if for nothing else, because it gives some insight into the attitude many large agencies have concerning their self-importance and the value of their services. This quote in the story, sort of sums up their general attitude: "The reality is that clients want more for less," says Maurice Levy, chief executive of Paris-based Publicis. "It's something that is unfortunately becoming quite common."

What is surprising is that it took Maurice (who allegedly is an advertising professional with a pulse on what consumers in general want) this long to figure this out. Isn't more for less one of the driving forces of our economy? Wal Mart, Target and Sam's Club have done pretty well operating under this premise. Why does Maurice think that his customers want more for less when it comes to the toilet paper they buy or the clothes they wear but not when it comes to the services of Publicis? It appears that he really thinks companies should pay Publicis more just because they are Publicis. At no point in this article does anyone from any agency say that clients should pay the same or more because they are doing a better job, or driving more sales for their clients. They just believe they should make outrageous commissions because that is the way it has always been. Good luck fighting against the tide, Maurice. Maybe Maurice's dreams will come true and once the economy recovers advertisers will come to their senses and get back to the good old days where they were willing to pay more to the people with the coolest clothes, regardless of the services they provide, but I wouldn't bet my Target jeans on it.

Here is part of the Wall Street Journal story:

While ad companies have historically lagged behind in economic recoveries, this time their rebound may come even later, and be less convincing. Not only have marketers slashed what they spend on ad time and space, but many companies have also significantly reduced what they pay their agencies for ad services, such as creating TV commercials.

Ad executives say marketers have slashed the fees they pay by 5% to 30%. Some companies have even asked that fees be reduced retroactive to Jan. 1, meaning firms are paid less for work they have already completed, say two ad executives.