Meta’s Facebook Marketplace is enforcing new restrictions on vehicle listings that appear designed to push car dealers toward paid advertising, and the change is creating an uneven early impact.
Some dealers say they intend to absorb the extra advertising spend made necessary by the changes to reach their target online audience through the platform. Others said the new rules will have limited effect because Facebook Marketplace had generated minimal gains for them.
Officials for Facebook and Meta, its parent company, did not respond to requests from Automotive News seeking comment. But the changes, which took effect at the end of January, caused many dealership groups selling cars via Facebook Marketplace to revamp their online marketing plans.
LaFontaine Automotive Group in Highland, Mich., expects to devote roughly $1 million in advertising spend to reach Facebook’s audience because of the listing restrictions, said Carlito Mojica Jr., a LaFontaine senior manager.
The dealership group is covering the extra cost both with new spending and by repurposing existing advertising dollars, according to LaFontaine spokesperson Max Muncey.
“We’ve probably dialed back some of our other used-car campaigns through other third-party vendors and platforms to allocate additional resources needed,” Muncey said. “Additionally, we will be allocating more of a spend towards this given the importance of used cars … with new-car inventory still not being back to full capacity.”
LaFontaine retailed 21,980 used cars in 2022, putting it at No. 29 on Automotive News‘ 2023 list of the top 100 U.S. dealerships based in the U.S. as determined by retail used-vehicle sales. Between 10 to 15 percent of its used sales come through Facebook Marketplace, officials said, making it an important way to reach customers.
“We definitely have to be visible,” Mojica told Automotive News.
But another metro Detroit retailer hasn’t gained much from Facebook Marketplace. An executive for Bowman Auto Group of Clarkston, Mich., downplayed the effect the Facebook Marketplace changes will have on its bottom line.
“Internet sales are necessary. It’s just that the Meta marketplace never showed the kind of results that we see from the other third-party” sellers, said Joe Jackson, Bowman Auto Group general manager.
The change
Meta early this year notified users it would no longer let sellers create used-vehicle listings via a Facebook business page as of Jan. 30. Similar restrictions applying to real estate and rentals were also made. The changes follow Facebook’s 2021 decision to end dealerships’ ability to push inventory in Facebook Marketplace via marketing partners.
Moving forward, dealerships have only paid advertising options on Facebook Marketplace, though free person-to-person listings for vehicles and real estate are still available on the broader platform, according to a person familiar with Facebook’s auto dealership business. The free Meta/Facebook options still available for dealers? Business Facebook pages, Instagram handles and WhatsApp messaging accounts.
The social media network said in its Jan. 30 message: “We are simply changing how inventory may be displayed in the future. For auto businesses, we continue to invest in innovative solutions to deliver on the automotive sector’s needs for the future,” promoting its paid-advertising dealer marketing hub as an alternative.
Bowman Auto Group had used Facebook Marketplace for some time, and the group’s leaders weren’t happy when the platform started allowing dealerships to push bulk inventory listings in the first place. So many dealerships signed on that it created diminishing returns, Jackson said.
“That put so many more dealer cars out there that we found it to be substantially less effective almost right away,” he said.
Still, the Jan. 30 change does mean fewer marketing choices on Facebook for the group.
“We will have lost something from what we had over the last couple of years,” Jackson said, though he noted the change won’t affect his group’s planning much. The retailer’s Bowman Chevrolet store sold about six used cars via Meta/Facebook last year through a partner listing, he added.
John Fitzpatrick, CEO of Force Marketing in Atlanta, a marketing technology company working with roughly 1,250 new-vehicle dealerships, said the long-term effect of Meta’s Facebook changes for dealerships remains unclear.
Facebook, he said, is clearly looking for new areas of revenue generation.
“I’m not at Meta, but if I were to read the tea leaves, they are trying to point dealerships and folks that sell vehicles as a business to their paid media strategies and not their marketplace, which is not a paid branded equation,” Fitzpatrick said.
Facebook, he added, “must have run a math equation [stating] that they will make more money from the dealers and folks who sell cars as a business by not allowing them to the marketplace and pushing them to paid media efforts.”
