The Future of Online Classifieds: What to Expect in the Next Five Years

Classified websites serve both individuals and businesses. Competition in the market is fierce. There are a lot of online classifieds websites worldwide, but not all of them stay on top for a long time. With so many websites online today, business owners are seeking new ways to stand out from their competitors and that means improving your classified ads website.

Review of the online classifieds industry

The online classifieds market is growing at a rapid pace across the globe. The industry is expected to grow from USD 4.58 billion in 2018 to USD 6.91 billion by 2024. This can be attributed to the increasing preference for digital mediums over traditional ones, owing to their ease of use and reachability, as well as growing numbers of mobile usage and urbanisation. Just in Australia alone there are 165 online marketplaces listed with consumers being able to choose between them.

But according to experts, the industry still has room to grow—and if those experts are right, then we can expect to see much more success in the next few years. What changes can we expect to see over the next five years? What new opportunities will arise? In this article, we’ll take an in-depth look at what you can expect from online classifieds in the years to come.

Analysis by core segment

• Online classifieds industry review
• Classification by geography

Online classifieds industry review

General Classifieds

General classified players, like eBay, Gumtree and Trademe.com.nz are a way for individuals and businesses to advertise their goods and services by posting them on an online site. The sites provide a platform where sellers can list their items or services and buyers can search for what they want.

You can read our Gumtree Case study published on TheDrum here.

Classifieds in automobiles and automotive

In the Automotive, Car and Motorcycle industry, sellers can list their products for sale on an online classifieds website. Buyers can search for these listings and find the best deals. The most popular websites within this category in Australia are carsales.com.au and Carsguide.com.au.

Classifieds in Real Estate

If you’re in the market to buy or sell a home, chances are you’ve come across online classifieds as you search the web and local newspapers to find your next place to call home. Online classifieds have taken over in recent years, especially with the popularity of sites like Domain.com.au and realestate.com.au. However, not all classified ads are created equal; there are some unique advantages to using online classifieds that can help make your home-buying and selling process easier, faster, and more rewarding!

You can read our Real estate Case study here.?

Online classifieds geography review

Asia Pacific?

While North America stands as the largest market for online classifieds globally, the Asia Pacific region is expected to be the fastest growing market. In global comparison, most ad spending will be generated in China in 2027. The growth in this region can be attributed to rising internet penetration, increasing smartphone adoption, and rise in usage of social media platforms including Facebook and Twitter among others.

Australia

In Australia, classifieds websites are mainly used for buying or selling cars and real estate properties. However, other products such as pets are also listed on these sites by sellers looking for buyers. Most users prefer using mobile devices to access classifieds websites hence leading to increase in demand for mobile applications designed specifically for smartphones or tablets

The Classifieds segment in Australia is projected to grow by 0.90% (2022-2027) resulting in a market volume of US$682.20m in 2027. Moreover it is estimated that 75% of total ad spending will be generated through mobile in 2027. It is of the utmost importance to leverage precise targeting and personalization also among mobile device users, as they already generate more than half of the global website traffic.?

Trends in the next five years

Mobile Apps?

In the next five years, we can expect mobile devices and apps to continue proliferating. The integration of voice search will make it even easier for people to find what they are looking for with a simple vocal request. In addition, augmented reality and virtual reality will continue evolving and creating new ways for people to interact with classified ads. This will create more immersive experiences for users who can't be physically present at an event or location. It is projected that in 2027, in the classified advertising industry, 49% of total ad spending will be generated through mobile devices.

You can read our blog post on in App retargeting here to learn how to leverage this trend

Greater focus on user experience

To stand out from the crowd and competition, classifieds sites will have to focus more on the user experience. This means that customers can expect better features, and a more personalized experience. You'll probably have access to reviews from previous customers who have purchased items from sellers on these classified sites.?Moreover, you'll be able to filter search results so you only see things that are relevant to your interests or needs. This is where our Deep Learning technology comes in, targeting the right user with the most personalized offers, at the best time.

Consolidation

In the future, we can expect continued consolidation. The marketplace has seen a number of acquisitions and mergers over the past few years, and it is likely that this will continue. E.g. Schibsted splitting off Adevinta as a separate entity and Adevinta acquiring many classified players globally, OLX investing in Properati etc. You can watch a video on why OLX recommends RTB House here. It's possible that some new players could enter into this space as well; however any newcomer would have an uphill battle to fight.

New business models

In the next five years, new business models will emerge. Perhaps one company will come up with an idea that integrates e-commerce with classifieds listings. For example, Ebay has already partnered with Craigslist and eBay Classifieds to provide a unified experience for their sellers. This is just one example of a potential trend in online classifieds that we can expect in the near future.

Artificial Intelligence

There are numerous applications for artificial intelligence in online classifieds, and many businesses are increasing their investments in AI technology. In real estate classifieds, for example, AI is used to find accommodations for users based on previous requests, preferences, and demographics.

Because of its enormous economic potential, the online classified advertisement domain is also a target for spammers, and this has become one of the most significant challenges impeding the continued growth of online classifieds. AI technology can be used on classified sites to detect spam by filtering out spam postings from legitimate postings. Using AI in this way will foster trust, which is often lacking in the online classifieds industry.

Lastly, artificial intelligence will likely change how classified ads are created, published, and searched for.

Further reading: The Use of Deep Learning in Online Classified Ads

Conclusion

The online classifieds industry is forecast to grow at a 10.3% CAGR from 2016-2024, which is lower than the worldwide internet advertising market growth rate of 12.5%. This can be attributed to the decline in display ads and rise of programmatic buying, which has been affecting the display ad market for years now. Online classifieds provides advertisers with an opportunity to reach local audiences with relevant messages through online channels that are not only cost effective but also time efficient as well. In order to outrun the competition, you must focus on ensuring the best experiences for both mobile and web users.

For help regarding this topic read our article: TOP 5 Tips for Classifieds Industry Digital Ad Campaigns.

If you are interested in learning more about classifieds or Deep Learning, I’m always available to talk about the Deep Learning MarTech solutions that RTB House offers. Just reach out and I’ll be happy to go into more detail.