The Best Ways To Run and Monetize a Classifieds Website

Today’s post is a guest post from Duncan Heath of Brighton, England. Duncan is an SEO and marketing expert who runs his own classifieds and price comparison site for surf clothing and extreme sports equipment.

Classified ads used to be a big part of print media. In fact, for many publications this was their main revenue stream, but that all changed with the introduction of the Internet. Capable of reaching much wider audiences and focusing on many more niches, the internet overshadowed print classified ads and so the buy/sell sections of newspapers and magazines largely dried up.

Today we are spoiled for choice when it comes to classifieds websites though, from monster generic ones such as Craigslist and Gumtree, to those catering for specific niches such as classic cars or works of art.

Classifieds sites have the potential to draw large traffic levels and it can be tempting to set one up to cater for a niche you are interested in, or service a gap in the market you’ve spotted. However, it is not always clear how to monetize such sites, and this is important if you want it to survive.

I’ve been running a successful extreme sports classifieds site for almost 3 years now and feel I have learned to monetize it pretty well. I wanted to share my advice here and point out some of my mistakes at the same time, so that others may benefit from my experience.

Paid Listings

The obvious way to monetize a classifieds website is to do what the print media used to and charge for people to list an add on your site, or more commonly, charge for certain areas such as job listings/services/high-cost items etc. However, with this revenue model we immediately hit upon an issue – critical mass. This essentially is the need to reach a critical mass of site users before being able to charge advertisers to list an advert.

People need to believe they are going to get a return on investment (i.e. enough targeted people viewing their advert) to warrant them handing over money. However, I would take this one step further and argue that you need to reach a critical mass to even get your classifieds site off the ground, regardless of whether your or not you charge for listings.

Affiliate Sales

People need to believe you have enough traffic to your site, just to justify them taking the time to post their ad. If you already have an established community of users this task is made a whole lot easier, but otherwise a strong marketing or SEO campaign is needed to get the ball rolling.

A mistake I made, even after getting lots of users interacting with my site, was thinking that I could start charging for ad listings. Very few sites actually charge for classified listings these days and it is only the very well established sites that still can.

I think you’re potentially in a better position to charge if your site is very niche, but even then, why would someone pay for an ad when there are often hundreds of free alternatives out there for them to use?

I soon realized that my initial revenue calculations for my site would be shot out of the water and so I started looking into other monetization methods. Here are some that I currently use, and others can work, but that I’ve rejected (for now).

Premium Rate Numbers

You can setup a system whereby you replace the phone number left by the advertiser with a premium rate number. When prospective buyers ring this number it automatically redirects to the sellers number, but charges the buyer a higher rate. Lots of phone companies can set this up for you and will give you a percentage of the call cost.

Advertisers tend to like this system also because it prevents their personal number being given out on the web. You have to be very careful however when using this monetization method and make it clear to prospective buyers that they are ringing a premium number. It may put some people of ringing, but the cost is often nominal compared to the price of the advertised goods and so you will still get people using the system.

Premium Rate Numbers

Ad Banners

One of most effective ways of monetizing your classifieds site is with advertising banners. Adsense is great, but I have also had a lot of success with privately negotiated ads. I’ve been able to secure lucrative deals with banner advertisers because classifieds sites actually tend to perform very well for SEO for the following reasons:

  • Pages are kept fresh by new ads continually being published.
  • People tend to write detailed and unique descriptions of their products, adding great SEO-friendly content to your site.
  • Classified listings are good at attracting links due to the seller’s own promotional activities in forums, social sites etc. I have also found that lots of people link to my site in forums when some another member asks where they can pick up a second hand X or Y.

Premium Listings

A great way of keeping your classifieds site free, but at the same time making some money from ads is to charge for premium listings. If a seller’s product is going to be promoted above and beyond the other ads on the site, they are much more likely to pay for it. Here are some ways you can make a listing “premium”:

  • Always place the ad at the top of the page results.
  • Highlight the ad with larger text or with a colorful border.
  • Have the ad remain on the site for longer than the normal listing period.
  • Link to the ad from other related advert pages in a “see similar products” section for example.

Affiliate Sales

If you think about it, people go to a classifieds site because they are looking to buy a product or service. In the case of products, if they can’t find it second hand they are likely to start looking for the best prices for new items on e-commerce sites. This is a perfect opportunity to make affiliate sales because you already know that they are looking to buy, and more importantly you know what they are looking to buy.

Affiliate Sales

Let’s say for example you run a classifieds site where people can trade their horse riding equipment and accessories. In the ‘horse saddles’ section for example, you can show affiliate ads for sites selling new horse saddles or just place an affiliate link to the saddles section of a site you have an affiliate deal set up with.

The more specific the link between the used and new product, the better the affiliates links will perform, but as long as you are in the same niche you should still get some good conversions. I took this one step further on my site and started comparing prices for new items across a number of affiliate sites.

I will soon start linking the second hand products that people list to new products that are being sold by affiliate partners.

Take these tips and put them to good use, and you should be able to get your Classifieds website off the ground or make it begin performing better.

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