Facebook launched it's Craigslist competitor, a classifields product called Marketplace in the year 2016 which allowed users and businesses to sell items in their local areas.
After running the service for sometime in select counteries and user cohorts, Facebook is finally launching the Marketplace Ads to monetize the service. After rolling out in U.S. in January and testing in Canada in May, Marketplace ads can be bought in those two countries plus New Zealand and Australia. Users will be able to boost their items to more people in the neighbourhood by using these ads and businesses will also be able to show their ads to more people across the Facebook network - Newsfeed, Messenger, Instagram etc.The ads will be auto-optimized, which means when a person clicks on it, then ad will be shown to more people with similar demographics.
Users can simply decide the budget and how long they wish to run the ads. Ads will stop automatically once the item is marked sold. Marketplace ads will go through Facebook ad auction and won't be simply assigned to the highest bidder, but will be optimised for both buyer's and seller's relevance.
Marketplace can be used by businesses to locally sell used vehicles, jobs, services, home rentals etc. Marketplace will open up new revenue streams for Facebook and also it will be competiting directly with the classifields leader - Craigslist. Although Craigslist charges one off fees for ad posting and not focusses much on performance based advertisement.
Facebook claims that businesses which are running Marketplace ads are getting positive ROI. For example FabFitFun, a women’s lifestyle subscription box and media company, increased its subscription base using ads on Facebook, with Marketplace ads generating a 2.2X return on ad spend. Another example according to Facebook is Thread Wallets, an accessories company which generated more than 300 purchases while increasing its year-over-year return on ad spend by 41% after adding Marketplace as a placement for its conversions campaigns.