Is Facebook about to kill classified advertising?

Classified advertising used to be the financial engine behind many newspaper businesses. Recruitment, property and motors advertising, alongside birth, marriage and death notices (BMDs) might have been small in stature – but before the Internet all but destroyed the classified advertising market – these small ads were sold at a premium rate (per single column cm) and made publishers big money.

Take a look at the back pages of any newspaper now and their once proud classified advertising section probably looks more than a little diminished with just a handful of trade ads supplemented by a scattering of free “for sale” notices.

The classifieds are now the place people turn to when they want to furnish a student rental property or buy a car under £500. Despite competition from the likes of eBay and Gumtree they still provide a valuable service and continue to attract readers who may or may not be interested in the news a title covers.

So the news that Facebook is about to enter the local classified advertising market will be particularly troubling for many publishers.

A spokesperson for Facebook told journalists: “Facebook is where people connect, and in recent years more people have been using Facebook to connect in another way: buying and selling with each other. This activity started in Facebook Groups and has grown substantially.

“More than 450 million people visit buy and sell groups each month – from families in a local neighbourhood to collectors around the world.

“To help people make more of these connections, today we’re introducing Marketplace, a convenient destination to discover, buy and sell items with people in your community. Marketplace makes it easy to find new things you’ll love, and find a new home for the things you’re ready part with.”

In a speech attacking the power of companies like Facebook and the threat they present to the new industry, Kath Viner, editor of The Guardian said: “Social media companies have become overwhelmingly powerful in determining what we read and whether publishers make any money.

“The idea of challenging the wide-open worldwide web has been replaced by platforms and publishers who maximize the amount of time you spend with them and find clever ways to stop you leaving. That may be great news for advertisers and the platforms themselves, but it’s a real concern for the news industry.”