After you type the text for your ad scroll down to the next area called 'Additional Options' and in the middle of that box you will see 'Manage Attachments'. A separate. box will appear and you can upload from your computer or a URL your image. If uploading from your computer click on the 'Browse' button, find your .jpeg image, click upload, then close the box. Then click 'Save Changes' and you are done and your image should appear in the thumbnail in the classified sections.
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