Generative AI and the Future of Classifieds

The rapid consumer adoption of GenAI chat has brought the biggest disruption to online search since it was invented – and with it, a series of potential implications for marketplace businesses and online classifieds portals. For the first time since the rise of Google, the search paradigm itself is shifting. AI chatbots and agentic interfaces are transforming how consumers discover, compare and purchase, reshaping the role of traditional platforms in consumer purchasing journeys.

The question is no longer if disruption will happen – it is how far and how fast – and who will be ready.

Search is Changing – and So Are the Rules of the Game

The past two years have seen a dramatic acceleration in GenAI adoption and use cases. ChatGPT, for example, surpassed 365 billion annual searches in 24 months, achieving in two years what took Google a decade. This growth coincides with the first recorded drop in Google Search volume within Safari in 22 years, with clear implications that consumers are beginning to change behaviour around AI-first interfaces.

Google has acknowledged this reality, rolling out an AI-powered search experience across the US despite its lower monetisation potential. AI agents are fragmenting the search experience, becoming new gatekeepers to inventory discovery, with consequences that will reach beyond altering traffic patterns.

Portals Are Vulnerable – Even If Full Disintermediation Does Not Happen

While many of today’s live use cases remain incremental, for example optimising parts of the search funnel, there is increasing concern across leadership teams that disruption could scale quickly. But there is also a wide divergence in views; some see a future of gradual evolution, others foresee a rapid sea change, where GenAI agents disintermediate and render portals obsolete.

There are risks to incumbents in a range of scenarios from partial to full disintermediation:

• Traffic fragmentation: 3 – 4 AI interfaces may soon sit alongside Google as primary traffic sources, requiring portals to rebuild visibility in a world no longer governed by SEO.
• Brand erosion: AI interfaces surface listings based on relevance, not on consumers loyalty, weakening brand primacy and undermining pricing models based on prominence, such as promoted listings.
• This creates a prisoner’s dilemma: portals face a trade-off between short-term gains from “deals with the devil” (strategic partnerships with AI agents) and long-term brand erosion. If one portal resists but its competitor partners, it risks losing ground.
• Full disintermediation: Loss of control over the funnel as AI agents may route consumers directly to estate agents or auto dealers or recruiters

Not All Verticals Will Be Hit Equally

AI will not reshape all classifieds markets in the same way, or at the same pace. Our analysis suggests that property and auto portals are relatively better protected, while jobs and general goods are at higher risk.

In property and automotive, the purchase journey is often high involvement, trust-intensive, and reliant on value-added features (e.g. verification, data layers, transaction support). Many classifieds portals in this space are also further differentiated by their exclusive inventory (e.g. from exclusive customers and C2C listings).

There are also differences across geographies with local competitive dynamics and market maturity playing an important role in shaping potential outcomes.

Zooming out beyond portals, the travel sector provides a stark contrast. Metasearch has potentially more vulnerability to disintermediation pressure due to lower emotional engagement, high functional overlap, and more concentrated and readily integrated supply side dynamics.

Inspiration is the Next Battleground

One of the most significant shifts lies not in how users browse and transact, but how they begin their journey. Historically, classifieds portals have commanded a disproportionate share of consumer attention by owning the point of search – however, AI agents are likely to have a high right to play in upstream areas such as inspiration, advice, and planning.

A Playbook for Incumbents: How to Defend and Win

For over a decade, the digital classifieds model has remained remarkably stable; high-margin, low-churn, and defensible. AI is calling into question the resilience of this model.

Despite the risks, portals are not powerless, and the playbook for defending relevance is clear. Success will hinge on bold, proactive strategy – not passive observation. Analogies can be drawn with the disruption of regional newspaper classifieds 20 years ago – where again some incumbents successfully transitioned into the portals era, and some did not.

The portals that thrive in the face of new competition will be those that act to secure unique proprietary supply, enrich their function as gatekeepers of quality on both sides of the marketplace, and extend their role beyond pure “marketplace” across the value chain – for example, through enhancing information available to user to become the first-choice search engine for both consumers and AI agents.

Please reach out to our experts below for our full insights.