Craigslist's Self-Censorship Is Smart Marketing

Last Updated Sep 6, 2010 2:50 PM EDT

The online ad site Craigslist recently decided, under significant pressure from media and politicians, to disable its advertisements for escorts and escort services.
Under most circumstances, I think self-censorship is stupid. Apple's decision to keep the iStore squeaky clean, for example, gives gadget-heads yet another reason to buy an Android-based phone. But in the case of Craigslist, it makes more sense to trade revenue for brand equity.

First, let's get the politics out of the way. Censoring Craigslist will have absolutely no impact whatsoever on the amount or nature of prostitution in the United States, because there are numerous alternatives for escorts and escort services to advertise.

Craigslist has direct competitors, like cityvibe.com and backpage.com that carry plenty of escort ads, and there are entire companies that specialize in building websites for prostitutes. Even before the Internet, you could open the yellow pages in any big city to "escort" or "massage" and find dozens of full-page ads for escort services. And most cities had an "alternative" newspaper or two, often available for free on street corners, that contained hundreds of such ads.

A couple of years ago, while preparing an article for another publication, I interviewed David Elms, the founder of the website theeroticreview.com, a site that allows "johns" to rate escorts, along with contact information for the ladies in question. Elms claimed at the time that his site was getting up to 350,000 accesses a day and had a million subscribers, so clearly men who want to hire hookers aren't hurting for information.

So why is everyone suddenly down on Craigslist? The answer is simple. Newspapers hate Craigslist because, as the largest purveyor of free online ads, it killed a major revenue stream for print newspapers, thereby hastening their financial decline. What's worse, Craiglist's popularity made it difficult for those publications to capture online classified revenue to replace the revenue they'd lost in their print versions.

When the media christened the murderer Philip Markoff, the "Craigslist Killer", it was settling old scores. And there little question in my mind that mainstream media is continuing to publicize to wild criticisms of Craigslist simply in order to damage the brand, which in many cases is directly competitive with their own.

Faced with ridiculous and unfair criticism and bad publicity, Craigslist had two choices: 1) tough it out or 2) sacrifice the revenue. Craigslist is making the right choice, in my view.

When you've got attorney generals in 17 states yammering that you're promoting prostitution, you risk losing revenue from the millions of people who advertise and sell less controversial products. Craigslist has, in essence, been forced into the position of the traditional newspapers, where their reputation did not allow them to run escort ads, forcing such ads into the alternative rags.

Craigslist's execution of that choice leaves much to be desired, though. They've simply slapped "CENSORED" over the ad category, which makes them seem petulant. Craisglist would have been wiser to take this opportunity to position themselves as the "clean" online site and use the publicity opportunity to increase their market share against the newspapers.

However, it's hard to blame Craigslist for being a bit annoyed. Everyone involved with the story -- Craiglist, the media, and the politicians -- know that removing escort ads from Craigslist will have only one outcome, which is less revenue for Craigslist.

But this is one of those situations where you've just got to roll with the punches and figure out how to turn a bad situation in brand equity.