Facebook Marketplace disrupts classified ads landscape

Facebook Marketplace disrupts the classified ads landscape – In 2016, Facebook created its own marketplace, which has significantly altered the online classified advertisements area in the five years thereafter. According to a new study, while the company’s large customer base and wide partner network give it an advantage in most circumstances, some businesses have managed to outmaneuver the social media juggernaut.

In 2007, Facebook launched its initial Marketplace feature, which allowed users to publish classified advertising in the areas of sale, housing, and jobs. The feature never caught on, and control was handed to Oodle, the platform that powered it, in 2009, before the company folded in 2014.

However, the international conglomerate remained committed to entering the online classifieds sector, and in 2016, it reintroduced a revamped Facebook Marketplace after learning from its failures. This time, the corporation wanted to capitalize on the growing popularity of organized “buy and sell” Facebook Groups, so it gave the new version a higher prominence in the main Facebook app, displacing Facebook Messenger.

Since then, Facebook Marketplace has quickly established itself as one of the most well-known and credible challengers to traditional classified business models in recent years. According to OC&C Strategy, Facebook’s threat is based on its massive global user base, which the company has used to help optimize user engagement while milking it for advertising revenue. This has allowed Facebook to provide a user-friendly platform, where customer-to-customer items can be listed for free, and professionals can list for far less than most other platforms.


In addition to the scale of Facebook’s built-in audience, the company’s data collection from that base gives it a significant competitive advantage over traditional classified players. The ability to “know your seller” in particular is critical to Marketplace’s success, as relevant product advertising can be targeted to certain user demographics.

Furthermore, through an extensive partnership network and expert support, Facebook has accelerated its Marketplace expansion into its most developed regions across North America and Western Europe. In the United States and Canada, for example, the feature has over 50 relationships with automobile companies and nine with rental or housing companies. In the meanwhile, it provides professional listings, eCommerce assistance, and on-platform transactions.

Even one of North America’s most successful online marketplaces has struggled to keep up with the disruptive offering. According to OC&C, since the launch of Facebook Marketplace in late 2016, Craigslist, which has been at the forefront of the classified ad market since 1995, has seen an alarming fall in monthly visitors across all platforms. Since then, visits from mobile and desktop users have decreased by a CAGR of 24%.

Craigslist’s user base had been rising before that, but shortly after Facebook joined the market, it peaked at slightly about 100,000 million monthly visitors. Its inability to stay up with Facebook’s user-friendly interface has worsened its declining visitors since then. Craigslist has a reputation for resting on its laurels as one of the only shows in town, having barely changed its interface over its 26-year lifetime — and failing to introduce a mobile phone app until late 2022. So yet, the app’s rollout appears to have had no impact on the company’s sagging fortunes.

Traditional incumbents, on the other hand, can adjust to the challenge if they box cleverly, according to OC&C. Facebook Marketplace’s inventory depth and quality, as well as seller services and lead quality, are lower than other classified suppliers, and the fact that Facebook’s global brand is still mired in multiple scandals means it is significantly less trustworthy than other marketplaces.

Leading classifieds platform Marktplaats in the Netherlands has utilized these facts to highlight its edge over the newcomer. Marketplaces are still the first choice for nearly seven out of ten Dutch purchasers, compared to only 9% for Facebook Marketplace. If the platform’s range and quality of items aren’t enough, it’s also made a point of investing swiftly in product features like a mobile app and a proprietary ad engine to help it compete more effectively with Facebook.


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