Heat Increases on Backpage.com, But So Does Revenue

CYBERSPACE—Village Voice Media is in a pickle. The pressure to no longer take lucrative prostitution and escort ads on Backpage.com increases with every day, but so does the amount of traffic coming into the adult services sections, and perhaps more significantly, so does the ad revenue.   According to AIM Group, the acknowledged "bible" of data and analysis of the classified advertising industry, Backpage is the leader by a wide margin in revenue generated from online prostitution ads. In fact, according to recent analysis by AIM, "Traffic to U.S. websites that publish escort and body-rub ads hit a record in March, while five of those sites sold at least $3.2 million in online prostitution ads during the month," and Backpage.com accounted for a large majority of that revenue. "Backpage.com, the general classified-advertising site owned by Village Voice Media, generated at least $2.6 million in online prostitution ad revenue during March–81 percent of the total–and had nearly 3.4 million unique visits," the analysis concluded. "Revenue was 2.7 percent higher than February, and 33.4 percent higher than March 2011. Unique visits to Backpage.com were up 8.1 percent from the previous month and 11.6 percent from March 2011." In case there was any doubt about Backpage's standing, the report stated, "Backpage is the leading U.S. site for prostitution advertising, a position it assumed in 2010 when Craigslist stopped publishing ads for adult services such as escorts and body rubs." It was during that same time period that the full focus of state attorneys general around the country started to call attention to Backpage.com in an attempt to replicate the same result they had with Craigslist. But the Village Voice, which has steadfastly maintained that it takes child protection very seriously and works closely with multiple law enforcement agencies to identify, track and locate child abusers who use their sites, has proven to be a far more determined adversary. In recent months, pressure from people like New York Times columnist Nicholas Kristof has increased, as has efforts by politicians calling for the voluntary closure of the sex ads pages. Just Monday, in fact, freshman Congressman Robert Turner (R-N.Y.) introduced a resolution that calls on Village Voice Media to shutter the adult entertainment section. Turner's resolution, H.Res. 646, outlines the recent wave of public pressure against Village Voice to terminate its adult-themed classified ads. It also lists eight specific examples of people who were arrested for sex trafficking, all of whom used Backpage.com to advertise. According to The Hill, "After six full pages of findings, the resolution concludes that the House 'calls on Village Voice Media Holdings LLC to act as a responsible global citizen and immediately eliminate the 'adult entertainment' section of the classified advertising website Backpage.com to terminate the website's rampant facilitation of online sex trafficking.'" To support its position, the Rep's resolution contains findings contained in the same March analysis by AIM, which, while it does provide clear data indicating the popularity of Backpage.com, addresses in general the issue of underage ads on sites like Backpage.com but does not provide any data regarding the alleged number of underage ads on the site or the amount of traffic or revenue associated with underage ads. It does mention, however, changes made by Backpage to its adult section, as well as a law in Washington state that requires "websites that operate within the state to obtain documentation that advertised escorts are at least 18 years old," and also mentions the fact that the ongoing controversy forced "two private equity firms, GS Capital Partners III (run by Goldman Sachs) and Trimaran Capital Partners, [decided] to sell their interests in Village Voice Media back to VVM." The report also mentions, however, that "The U.S. Communications Decency Act protects publishers of online advertising posted directly by advertisers if the ads have not been reviewed before they appear online—even if they promote prostitution or include illegal references to discrimination in housing, for example." Of equal interest, the AIM report analyzed revenue derived from prostitution ads in 23 American cities, and studied 24 websites that either "sell listings or prostitution in other ways." According to the collected data, "Of those 24, we are able to compute revenue based on the number of listings and published advertising rates for six—Backpage.com, Eros.com, CityVible.com, MyRedbook.com, Escorts.com (which closed June 1, 2011) and AdultSearch.com. "We can also count listings on three additional sites—NaughtyReviews.com, Eccie.com, and A1List.net (which stopped publishing ads in July). "For the remaining 15, we track only unique visitors because the other data is not publicly available or because the sites have so little traffic that their revenues or listings would be insignificant. Those sites are TheEroticReview.com, Sipsap.com, Preferred411.com, SexyEscortAds.com, BigDoggie.net, LocalEscortPages.com, HotLocalEscorts.com, MyProviderGuide.com, TNABoard.com, FindHotEscorts.com, EscortGuide.com, EroticServicesGuide.com, EpicDreams.com, Escortme.com, and BarebackEscorts.com." The numbers provide a fascinating glimpse into the not-so-netherworld of online prostitution and escort ads, and highlight the prominence of Backpage.com in the pecking order. For instance, of the top ten most-visited sites in March, Backpage.com dominated with 3,364,762 unique visitors (an 8.1 percent increase from the previous month), with the second place finisher, AdultSearch.com, claiming 746,300 uniques, for a 20 percent increase. The third place finisher, The Erotic Review.com, had only 296,902 unique visitors in March, an increase of 8.2 percent, and the numbers decrease thereafter until the 10th place finisher, TNABoard.com, which had only 88,356 visitors in March, but could claim an increase of 38.6 percent over the previous month. The report also provides monthly revenue estimates derived from prostitution ads from April 2011 for the top six earning sites, with Backpage.com once again leading the pack. Of course, despite the fact that Backpage.com is regularly accused of being the leading destination for sex-trafficked minors in the country, the service insists that the vast majority of ads are placed legally by adults, and it continues to contend that closing the adult services sections will hamper the ability of law enforcement to identify and prosecute criminals who abuse minors in this manner. The incessant calls for VVM to close the sections, however, will no doubt continue to increase in number and volume.