Craigslist was on track to generate almost $45 million in revenue this year from its “adult services” section — thinly disguised ads for prostitutes. New research by the AIM Group, released today, showed that the site’s adult-services revenue grew almost 20 percent during the past six months.
The AIM Group, which has tracked Craigslist’s revenue since 2003, reported in late April that the company was expected to generate $36.3 million in adult-services revenue, triple the revenue it generated with adult services in 2009.
However, research completed last week showed a substantial increase.
In our snapshot — which is based on extremely conservative methodology — the volume of adult-services ads was up almost 9 percent from February, when our previous research was conducted. Using the same methodology, we now projected revenues of $44.4 million across all of Craigslist’s U.S. markets.
“While it’s not clear whether Craigslist has made a decision to eliminate its adult-services ads temporarily or permanently, it’s clear the site’s revenue was growing exponentially ,” said Peter M. Zollman, founding principal of the AIM Group (formally known as the Advanced Interactive Media Group LLC), which is based in Altamonte Springs, Florida.
“Because of the shutdown, the site may not generate the $44.4 million in adult-services revenue that we estimated just last week.”
The new revenue estimate was prepared on behalf of a private foundation that fights against child prostitution as one of its key goals. The foundation engaged the AIM Group to research revenue among numerous sites in the U.S. that carry ads from prostitutes. The data were scheduled for release on Sept. 14, but the foundation and the AIM Group agreed to release them early because of the decision by Craigslist to replace its adult-services category with a “censored” banner. (See our earlier coverage of that decision here.)
Village Voice Media, publisher of Backpage.com and 14 alternative weeklies throughout the United States, generates an estimated $17.5 million in ads for escorts and adult services, the AIM Group reported.
“While Craigslist generates the most revenue by far in ‘adult services,’ it’s not the only site. Craigslist has drawn a great deal of attention for its adult services ads, but Village Voice Media and a number of other sites and media companies also carry similar ads,” said Zollman. “In fact, the ads on Backpage.com are considerably more graphic and explicit than Craigslist ads, and the photos they carry are definitely not suitable for children — or most adults, either.”
The research into Craigslist’s and Village Voice Media’s adult-services revenue, which was conducted in August, was funded by a private foundation that has asked not to be identified at this time, in part because it does not want to seem to be taking credit for the Craigslist decision nor promoting other adult-services advertising media.
“We have closely tracked Craigslist’s revenue for eight years,” said Zollman. “Our estimates have grown from about $7 million in 2003 to $122 million in 2010. While the bulk of the company’s revenue comes from recruitment advertising, the adult-services category was about one-third of its projected revenue this year.”
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(Here’s a link to our earlier news release about Craigslist’s revenue in 2010: http://aimgroup.com/blog/2010/04/30/craigslist-revenue-profits-soar/ )