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 U.S. +1.407.788.2780     Germany +49.89.6.214.6044 info@aimgroup.com

ALTAMONTE SPRINGS, Fla. (Jan. 21, 2011) – Taking advantage of the void left when Craigslist eliminated its prostitution ads, three major websites increased their rates on prostitution ads last month, driving double-digit revenue growth.

Backpage.com and two other escort-advertising sites drove their estimated December revenue from prostitution ads to $3.1 million, a 23 percent increase over November, AIM Group research showed.

The revenue jump was caused entirely by higher rates, because ad volume declined. The number of unique visitors to 24 websites that either promote prostitution or publish free escort listings in December remained flat compared to the previous month. The total number of listings on nine tracked sites decreased 2.5 percent in December compared with November.

The statistics indicate that the migration of escort advertising to sites other than Craigslist continues to stall after ads seemed to shift in September and October. Craigslist in September eliminated its categories for escort ads and other adult services in the United States. Then in December, Craigslist dropped the categories internationally.

Village Voice Media, which owns Backpage.com, increased rates in several markets. Before it eliminated prostitution ads, Craigslist charged $10 for a one-week listing in the United States. At the time, Backpage prices ranged from $3 to $12 per online post in 23 U.S. cities surveyed by the AIM Group. Based on an online review of prices in December in those same cities, Backpage raised rates to at least $5, although rates in the highest-priced markets were reduced to $10. Rates for reposting ads to the top of a particular day, and rates for highlighting a listing, also were revised.

Backpage, a general classifieds site that also publishes ads for real estate, rentals, autos, employment and general merchandise, is clearly the U.S. leader in online prostitution advertising. The AIM Group estimates it generated $2 million from prostitution ads in December, nearly four times the amount generated by its closest competitor, CityVibe.com. In August, before Craigslist stopped publishing adult ads, Backpage’s estimated monthly revenue was $1.4 million. The estimate does not include revenue for prostitution ads printed in the alternative weekly newspapers owned by Village Voice Media.

After convincing Craigslist to eliminate prostitution ads, law enforcement officials have started pressuring Village Voice Media. The company responded by placing Backpage’s personal ads under review and establishing some new rules for ads, but it continues to publish ads for escort services and body rubs, both euphemisms for prostitution.

The $3.1 million online prostitution-ad revenue generated by Backpage and five other websites in December is still less than the $3.7 million a month Craigslist was generating alone. In August, the AIM Group projected prostitution advertising on Craigslist and six other sites would generate $70 million in annual revenue. With Craigslist out of the picture, that estimate is now $32.4 million, based on figures compiled from September through December.

Two other sites, CityVibe.com and AdultSearch.com, also have revised their rates. CityVibe.com changed its rate from flat rates ranging from $1 to $5 depending on the city to $2 a week in every city. AdultSearch.com raised the price of reposting to $3 for four times, up from $1.

In addition to reducing its revenue, Craigslist’s traffic has declined since it eliminated adult services ads. Compete.com reports Craigslist had 54.9 million unique visitors in December in the U.S., down 1.5 percent from November. It was the fifth consecutive month of decline. Craigslist’s unique visitors have dropped by 6.3 million monthly, or 10.2 percent, since August, the last full month it carried prostitution ads.

It’s hard to say where those 6.3 million unique visitors have gone. Traffic to the six revenue-generating sites tracked by AIM Group has increased a total of 11.8 percent since August, but that accounts for just 381,000 unique visitors. Of course, it’s impossible to say how many, if any, of those visitors formerly went to Craigslist to view prostitution ads. And on the 24 sites AIM Group has identified as promoting prostitution or prostitution advertising, aggregate unique visitors were actually down 1.1 percent in December from August.

Here are the December unique visitors to the top 10 most-visited sites, according to Compete.com:

The AIM Group tracked prostitution ads and, where possible, calculated the revenue they generate in these cities: Atlanta, Boston, Charlotte, N.C., Chicago, Dallas/Forth Worth, Denver, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New Orleans, New York City, Orlando, Fla., Philadelphia, Phoenix, San Diego, San Francisco, Sarasota, Fla., Seattle, St. Louis, Tampa and Washington, D.C.

NOTE: There was an error in the Backpage ad count for November, and the correction is reflected in this report. The count for November was 27,000 and was under-reported by about 16,000 last month.

About the AIM Group: The AIM Group, formally known as the Advanced Interactive Media Group LLC, is the world’s leading consultancy in interactive media and classified advertising. It publishes Classified Intelligence Report, a continuous advisory service often called “the bible of the classified advertising industry.” The AIM Group works with leading media companies, broadcasters, dot-coms, yellow-page publishers and technology companies. It provides strategic and tactical consulting; sales training; proprietary and published research about interactive media, and other services. Founded in 1998, it is based in Altamonte Springs, Fla. For more information call (407) 788-2780 or see http://AIMGroup.com.

This monthly update report has been funded by a foundation that has asked not to be identified, in part because it does not want to seem to be taking credit for the Craigslist change in practice, nor promoting other adult-services advertising media.

The original Sept. 15, 2010, report can be purchased at www.aimgroup.com, and proceeds will be given to report’s sponsor. In addition, the AIM Group’s 47-page 2010 report on Craigslist, “Craigslist revenue to top $122 million,” is available through AIMGroup.com.

Note: Peter M. Zollman, founding principal of the AIM Group, and Mark A. Whittaker, senior consultant for the AIM Group, are available for comment on the research. Zollman is available at 407-788-2780; Whittaker at 724-776-2893 or 724-553-8428.