How do free classified website sites make money?

How do free classified website sites make money?

Traditionally, classifieds acquire listings of some sort (sales, data partnerships, scraping, stealing, selling etc.) and with volume one can monetize through AdSense or other networks. Some even sustain on this level without taking the next step of charging for premium/bumps, for which liquidity is a pre-requisite.

There are a few more options - even though they probably represent a very small share of the global classifieds revenue (approx. $75b 2014: source AimGroup) . This is by no means a priority list nor a comprehensive one, but I thought it might be useful with a more detailed comprehensive list with real examples.

1. AdSense

Worth mentioning about Classifieds is that they can be smoothly presented on empty searches, so as not to display empty searches - instead of just having it has related content.

2. Display

Display has traditionally been an important revenue source for most digital media, but some classifieds offer display in more creative forms. High traffic volumes and users searching on city and category levels make it possible to sell targeted display on geo and interest. For certain brands who have reached a winner takes all position (e.g. Blocket.se and http://Finn.no) display has proved to have a higher growth on mobile where profesional stores/boutiques pay for being part of search lists in banner formats, sometimes with a slight delay for increased exposure.

3. Listings

There are numerous variants of monetizing listings

By number

Blocket.se is one of the few sites that charge for every single listing in all categories. Most sites, do it only in a few (Craigslist) or like eBay Kleinanzagen only charge for heavy usage i.e. more than 5 ads.

By pro/private

Another dimension instead of by number is charging differently for businesses, which is quite common among the mature sites (http://Subito.it, http://Mobile.de, http://Avito.ru etc.). A fair, common and straightforward division, but which often results in creating a behaviour where sites have to moderate to find “hidden professionals” trying to cheat the charges.

Premium listings

The most common form of way to monetize classifieds used by almost all of the big players Naspers, eBay, Schibsted, Avito, Kinnevik/Rocket and others are:

Bumps or enhanced or premium. Listing are bumped to top of the search results. Either fixed as a sticky posts or just by renewing the timestamp.

Design highlighting with border, bold text or the like.

Links or placements of the ad in other areas than the search result.

Time extension or prolonged listing time.

http://Sahibinden.com are one of the few classifieds that have both perfected premium offers (or “doping” as they call it) and who are transparent at the same time. A next natural step for classifieds is said and could be the use of real-time bidding, rather than fixed bump pricing.

   

4. Auxiliary Services / Affiliates

A pretty standard setup is to work with related affiliate link on listing pages which may even enhance the user experience and not come across as bought media. Horizontal classifieds mainly keep to personal finance links (loans, insurance etc.), escrow or shipping.  On markets where listings are free or easily accessible (Verticals and the US real estate market in particular) these are more prevalent. http://Trulia.com  which pulls the same free real estate listings that other websites have access to are especially known for adding features (some bringing in revenue) which both ads to their user experience and profits.

5. Data

Few marketplaces openly talk about selling data, but especially for strong verticals meta data of prices and trends is quite valuable for banks, insurance companies and other players.

6. Premium Rate Numbers

Offering private numbers, unique to the listing, to sellers is fairly common on many markets, but is mainly offered as a quality service but some give take a small cut, like Blocket.

Some sites have phone numbers/calls as a serious source of revenue. One example of such is http://www.friday-ad.co.uk in UK where listings are mostly free, but buyers calling in on the seller numbers pays an extra fee for each call.

7. Premium/Pro User Accounts (enhanced usability)

Pro accounts can both offer extra features for the buyer and sellers, but paid by the user. Common features are seeing listings earlier meaning slight delay for freemium users (e.g. http://preloved.co.uk for general classifieds and http://privateproperty.co.za for rental listings), sending texts/SMS to sellers and different ways of ensuring leads are answered (e.g. LinkedIn’s InMail credit system).

8. Selling Leads to Businesses

This business model somewhat diverges from the general idea about classifieds, so this is a stretch, but still deserves a mention. http://www.myhammer.de, http://www.uShip.com and many more charge per number of leads delivered or fixed matching fee. The reason these models deserve a mention in connection to classifieds is that a number of real estate and vehicle verticals sell leads to businesses on the side of their listing service (e.g. general leads to search leads to agents on for example . Usually it’s a car service garage or a real estate agent who pays in some form to get leads.