Craigslist Ads: Why & When Started Charging? - Tech With Tech

Craigslist Ads: Why & When Started Charging?

Here’s why and when Craigslist started charging for posting ads:

Originally, Craigslist started charging for job listings because it was competing with a sister site:

In 2018 (and since), Craigslist added more fees to specific types of posts in the hopes of reducing spam and scam posts.

These changes also updated the revenue model for the site.

So if you want to learn all about why and when exactly Craigslist has started charging for ad postings, then this article is for you.

Let’s jump right in!

Craigslist Ads: Why & When Started Charing? (All the Info)

What Is Craigslist?

Happy loving couple using laptop together

If you’re not already familiar with the site, allow me to take a minute to explain.

If you have familiarity with Craigslist, feel free to skip to the next section.

Craigslist is a website that essentially works as a public message board.

If you have ever seen a bulletin board in a public space with fliers or letters or posts on it, then you can think of Craigslist as the digital equivalent.

The site is organized by location, with hundreds of cities around the world included.

On any local page, you can make posts.

You can post that you want to sell an old lawnmower out of your garage, that you need a new roommate, that you’re looking for a bassist for your garage band and all kinds of other things.

Probably the most common posts are employers looking to hire people, individuals trying to sell items, and landlords trying to rent spaces.

But, if you browse the site, you’ll see all kinds of things.

For the most part, Craigslist is free to use, but there are some fees associated with specific posts (which I will explain in full detail as we go).

The site has been around since the mid-90s, and it remains one of the more popular ways to try to exchange money, items, time, and ideas with people in your local area.

When Did Craigslist Start Charging to Post?

Woman with blond curly hair shopping online

Before we can get into the motivations behind Craigslist’s monetary policy, we should probably establish what the policy is and how it starts.

For basically the first decade that the site existed, all posts were free.

There was no charge to use the site at all.

You might wonder how the site was able to pay to stay up, and that’s a fair question.

In the early days, maintaining the site was so cheap that it really didn’t need to make money.

As it grew, costs did rise, and for a while, Craigslist was actually funded by an external project known as List Foundation.

It was a similar concept, but it was geared specifically for professional job recruiters.

List Foundation made more than enough money to cover the maintenance costs of Craigslist, and that’s how everything worked for a while.

It wasn’t until 2004 that Craigslist first introduced fees for listing things on the site.

In this update, the site only charged for posts that listed paid jobs.

In other words, if you were trying to recruit employees on Craigslist, you had to pay.

This prevented Craigslist from being a free alternative to List Foundation, and it helped ensure that both sites remained financially solvent.

For the most part, things stayed the same for years, but in 2018, another update was run, and this added more charges.

With this update, posts that provided services or gig work also had to start paying.

It was still more or less in line with charging for recruitment, but not long after, that would change dramatically.

Over the course of 2019, a handful of updates introduced more and more charges.

By the time it was all done, Craigslist was charging for posts that included rentals, property rentals, motor vehicle sales, and more.

Today, there are still a lot of things you can post on Craigslist for free, but the number of charges has certainly grown, and it may grow again in the future.

How Much Does Craigslist Charge?

Happy beautiful woman in eyeglasses using credit card and laptop on couch at home

With all of these new charges, you might be wondering how much it costs to use the site.

Going from free to paid is a big change.

For the most part, Craigslist posts cost $5, but there are variations.

When it comes to job listings, the prices range from $3 to $75, depending mostly on the location of the job. 

There are also some $3 posting fees for “sale by-dealer categories” and gigs in North America.

Outside of these specific exceptions, Craigslist posts are either free or cost $5.

You can see the full list of fees at the link I posted above.

Why Did Craigslist Start Charging? (3 Reasons)

Woman typing on her laptop and sees the "Secure payment" message on the screen

Alright. You know the history of Craigslist fees.

You also have a good idea as to how much the fees are.

Let’s really get into it now.

What’s the point?

Why did Craigslist start doing this?

You might think it’s all about the money.

Since when did a company ever need an excuse to charge money for things and try to increase their profits?

It’s normal behavior, right?

Well, revenue is part of the equation, and I will explain that in detail, but if I’m being completely honest with you, money was probably a minor motivation in the decision.

In reality, it was more about improving the average quality of posts on the site, and I’ll explain exactly how posting fees have helped with that too.

But, I really want to justify this claim first.

How can I say that the fees aren’t just about making money?

Well, according to third-party researchers, Craigslist’s revenue went down after the changes were made, yet the company hasn’t reversed the decision.

And, it wasn’t a small change either.

Overall revenue is only about half of what it was before the major changes began in 2018.

That strongly suggests that this isn’t just about money.

#1 To Drive Revenue

Revenue Graph being drawn in chalk

Still, money does matter, and anything to the contrary is hard to argue.

The original change to charge for recruitment on the site was definitely revenue driven.

Since Craigslist was primarily funded by List Foundation, it didn’t make a whole lot of sense for the site to provide a free alternative.

The change was less about driving revenue through Craigslist posts and more about reducing competition with the paid site that was keeping Craigslist operational.

Regardless, revenue was clearly a motivating factor, and the changes that have been made since have increased revenue for Craigslist.

Craigslist is a for-profit company, and it stands to reason that the business is motivated to drive revenue.

Despite that, revenue was not the only motivation for these changes.

In fact, it’s not even the primary motivation.

Craigslist remains a very cheap site to operate, and it generates a ton of traffic, so the site doesn’t have to work very hard to turn a profit.

#2 To Reduce Spam

Beautiful Asian woman frustrated with spam she gets

Another reason for the increase in posting fees has to do with spam.

A lot of people use Craigslist, and in order to make your own post competitive with everything else on the site, you might be tempted to make repetitive posts.

Even if you’re posting the exact same thing again and again, that repetition probably increases visibility, right?

Unfortunately, doing this doesn’t make the site more valuable from Craigslist’s perspective.

The site sees value as providing a lot of options to people using it, and spam reduces that.

You can see how the posting fees provide a pretty simple solution.

If posts are free, then there’s nothing stopping you from spamming the list and lowering the site’s overall value.

If posts cost money—even a small fee—then you will suddenly think twice about spamming the site.

You ultimately have to decide if your spam is worth the fee, and even for businesses or individuals who do thrive on spam, there’s a line where the fees get too expensive.

The real point is that these fees, large or small, do help to cut into spam posts, and that has been the case with Craigslist.

Spam still exists, and there are still plenty of posts that are free, but overall, the problem is not as big as it used to be (while the problem is on the rise across the internet, Craigslist is contributing less to the problem today).

#3 To Stop Scams

Incoming call from Scammer

Revenue and spam are legitimate motivations, but they’re not the big ones.

The primary reason that Craigslist added a lot more fees was to fight back against people using the site to run scams.

First off, spam and scams do correlate.

While there are people who spam Craigslist to raise visibility, some of those people have ill intentions.

In general, scams on Craigslist are related to fake posts.

Whatever job, item, or deal is listed in the post is not a real offer.

Instead, the scammer is trying to get money or financial information from you.

Hence, it’s a fake post.

When it comes to spam statistics, Craigslist considers fake posts to be a type of spam.

In this way, cutting back on spam also cuts back on scams, but there’s more going on here.

Aside from cutting spam, Craigslist posting fees push back against scams in two distinct ways.

The first is easy to understand.

If it costs money to upload your scam post, then that cuts into the bottom line, and your scams might not be worth it anymore.

Scams that don’t do well will ultimately be abandoned, and the sheer volume of the scams on the site will go down as a result.

More importantly, Craigslist requires you to pay posting fees with a credit card.

That means that Craigslist gets your financial information when you post.

It’s not a good idea to post a scam when you can be tracked via your credit card.

Now, there are ways around this tracking, but at the very least, the fees are weeding out the laziest scammers and making the site a little better as a result.