Classified advertising has been with us for over 300 years. From humble ‘want’ ads nailed up on posts in market squares across Britain in the early 1700s, the simplistic advertising notices, which in later years were seen as an aesthetic art form, moved into the nascent press in 1704.
Classifieds experienced a boom in the 1800s, as newspaper circulation rates expanded, and the British population became more literate. Within 100 years classifieds had become a major source of income for publications, in some cases you had to search out the news hidden amongst pages of classified ads and notices.
There is a beauty in the simplicity of classified ads. Concise and to the point, they get straight to the heart of what the advertiser is trying to say and connect readers looking for a specific product or service direct to its seller. The form limits the advertiser to a few lines of text, so they have to be very focussed, honest and straightforward, and even in the digital age we’re in now, this form of communication is still popular after three centuries.
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A study by the Interactive Advertising Bureau (IAB) found that the online classified advertising market in the UK is worth GBP1.3bn. This is expected to grow to GBP1.7bn by 2025. The study also found that the most popular categories for online classified advertising in the UK are jobs, real estate, and vehicles.
However, given the sad decline of print (quite ironic given we’re writing this on an online platform), classified advertising has had its challenges. Print will continue to decline in importance, and although the classified market is migrating to online platforms it is facing challenges from social media and is constantly battling spam – what is classified as spam nowadays – and spammers often use classified ads to send their messages, which means that trust is declining in the advertising form.
Baltic Classifieds migration to social media
That said sellers are now increasingly using online classified platforms and partnering with social media, and it is this adaptability that means that classifieds will continue to be a major force in the years to come.
One company that is enthusiastically flying the classified advertising flag is FTSE250-listed, Baltic Classifieds Group, LON:BCG, a leading provider of online classified advertising in the Baltic Region, primarily Latvia, Lithuania and Estonia. The company employs over 130 people in four offices in the Baltic states, with its head office in Vilnius, Lithuania, and has market-leading positions in automotive, real estate, employment and services and generalist online classified advertising in its target markets.
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With a market cap of over GBP965m, it seems that classified advertising is hale and hearty in the Baltic states. These small countries on the fringe of the EU have a combined population of over six million, but a very high internet penetration rate and high level of digital adoption and adaptability. The company is also a big player in the print classified market, but its online where it’s made its mark, innovating its design to be mobile- and device-friendly and integrating its advertising into the booming social media space in the Baltics. Success has been built on BCG’s ability to adapt to the changing requirements of its clientele and making an antiquated advertising form contemporary and relevant to a growing urbanised middle class and young consumers in the Baltic states.
Triple-digit profit rise
In its last results for the year to the end-April, published at the end of June, BCG reported a 19% increase in revenue to EUR60.8m (GBP52.3m), a 17% increase in Earnings, a 113% rise in operating profit to EUR29.1m, earnings per share up 20% to 7.7 cents (EUR) and a final dividend of 1.7 cents [EUR] per share, up from 1.4 cents (EUR ] per share in 2022.
Justinas Šimkus, chief executive officer of Baltic Classifieds Group, said in a statement at the time: “This has been yet another very successful year for BCG and a record year in terms of financial performance. I was delighted to see that growth was driven by our core classifieds revenue streams and that the growth was relatively consistent across all of our verticals. C2C performance is of particular note as it grew the most supported by both volume and ARPA growth.”
He continued: “The excellent results achieved this year combined with successful pricing and package changes across all of our business units, in C2C and B2C, have provided ongoing momentum moving us into the next financial year.”These results show classified advertising isn’t going anywhere soon in the Baltics, and although a new addition to the London Stock Exchange, having only listed in June 2021, it doesn’t seem to be going anywhere soon either.
BCG shares opened on 13th September at 195p, offering a 33.5% year-to-date return and a one-year return of 37.9%. The shares have ranged between 119.8p and 222.5p over a 52-week period.
Although classifieds have its challenges here in the UK, they still retain loyalty and popularity in the Baltic States. The market is growing, and BCG is well-positioned to continue to grow in the Baltics given its strength of local knowledge and ability to market opportunities in some of the most difficult languages in Europe, which have been to date some of the most economically successful states stepping out from behind the Iron Curtain.
