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Bob North

February 2009

Rightmove off to a flying start...

...but rivals also determined to enjoy a memorable year

NINETY-NINE per cent renewals, record enquiries on the first Monday in January and a new ad campaign that really is being seen on TV have given Rightmove a flying start to 2009.

It is a long way from the speculation of bloggers and even some respected commentators who were forecasting the impending demise of the leading portal site at the end of 2008.

Agents have chosen to vote with their cash, renew their contracts and pay for the one portal that seems to be a ‘no-brainer’ and to stay with Rightmove for 2009.

Ed Williams, Rightmove’s managing director, is quite scathing in his comments.

“Some of the speculation may have been prompted by a small minority of agents disadvantaged by leaving Rightmove,” he said.

“However, I think that much more of it is wishful thinking from competitor websites and self-interest on the part of a handful of people who are trying to set themselves up as middle-men to handle negotiations between agents and the leading website, while seeking to cream off a fee for themselves.

“The facts are that over 13,000 branches are benefiting from advertising their properties and brands to the largest homemover audience.”

According to Mr Williams, over 99 per cent of Rightmove member agents have chosen to continue their membership into 2009. “Although about 130 offices chose to leave, over 100 offices joined during December,” he said.

These numbers may reflect agents’ desire to be associated with Rightmove’s largest marketing campaign ever. There is also a view that as agents continue to cut their newspaper advertising spend, it is all the more important that they can point their vendors to the fact that their property will be advertised to the UK’s largest audience of home buyers — on Rightmove.

“We are looking at the figures right now, but it seems that for every one estate agent or lettings agent who decided to cancel its membership during 2008, three decided to join,” added Mr Williams. “While not immune to the significant contraction in the overall size of the agency market in 2008, the vast majority of agents who have a choice chose Rightmove.”

Yes of course there is competition but leading contenders Digital Property Group are struggling to get agents to renew subscriptions at full price and news of renewals creeps slowly from their public relations arm.

Cluttons, Kinleigh Folkard and Hayward and Douglas & Gordon have renewed on terms that are not disclosed but it is taking a considerable time to try to persuade some of the former Prime Location shareholders that they should renew their subscriptions at full rack rates.

Mark Milner, DPG’s chief executive, said: “It will take time to roll everyone onto it [the new offering]. We are confident that in the coming months, many more agents will renew their contract. We are already in advanced talks with a good number of leading agents and developers.”

The problem for DPG is what to do in the meantime. It seems that all properties are still available on the sites while discussions continue and not everyone is paying for that privilege.
Agents seem to be choosing to go with the ‘free’ sites. Think Property has seen a significant difference since they took the major strategic decision to turn TP.com into a free-to-list portal.

Managing director Mark Goddard said: “This was driven by our belief and research that the current conditions in the property market would be the catalyst to change the traditional way agents had been requested to pay for access and results from major portals.

“The decision was extremely well received and we have seen major increases in just two months on our branch sign ups.

“At the end of October, we had just over 5,600 branches using TP.com but in November and December, with very little marketing, we signed up over 1,250 new branches — a few of the names are Hamptons International, Robinsons, Marsh & Parsons, KFH, Stags, Blundells and Ludlowthompson.com.

“We have reshaped our portal business significantly and are now focused on growing agent numbers. We expect comfortably to increase stock each month by 500-600 branches. Given the rate of estate agency closures, combined with these sign up successes, our market share of all agents by the end of 2009 will be significant.”

Globrix are also gaining customers on their free-to-list site. Agents have to remember that Globrix, owned by media giant News International, are different from other property portals in that they send uses to the agents’ websites rather than collecting leads.

Chief executive Dan Lee said: “With our traffic already growing in 2009 we believe that by the end of the year we should be the major independent traffic generator (excluding Google) for most agents across the country.”

The problem for Globrix is gaining revenue and a look at their site shows fewer agents paying for their premium positioning offerings.

Mr Lee accepts this. “Renewals are certainly tough at the moment and we have seen at least 15 per cent of our customers going out of business or shutting offices,” he said.

“We are about to launch a new premium service for agents who wish to increase brand awareness or generate more traffic to their website.... as well as area guides and agent directories across the UK. Our aim is to double our traffic this year and to increase our brand awareness through PR, intensive newspaper and online marketing and some targeted TV advertising.”

Undoubtedly Globrix will continue the challenge but will they generate sufficient revenue to maintain their free-to-list offering?

Think Property admit that their longer-term charging structure is likely to be on a pay-per-response model. “If there is an opportunity to charge after 2009, then it will be definitely along the pay-per-results model,” said Mr Goddard, adding: “I should stress that we are under no pressure to introduce this, and will make sure that our role in supporting agents through these tough times is always put ahead of charging. This is the luxury of owning so many software businesses that we are able to take this view.”

Fish4 are also committed to the pay-per-response model. Property head Stewart Black is optimistic. “All I have heard from the larger estate agency groups is the view that they will only consider advertising on new [to them] portals if it is on the pay-per-response basis, which is similar to their own no sale-no fee charging models,” he said.

“I think that the opportunity to gain market share is there for us to take. Ironically, the credit crunch may in fact create a climate ideally suited to fish4homes’ strengths, so I remain cautiously optimistic.”

Property Finder are also optimistic about the future. They are very much in the battle with DPG for the second position behind Rightmove but have a different approach and are investing both in more marketing and increased agent support.

Chief executive Gillian Kent is very clear. “Here at propertyfinder.com we recognise that agents have a choice,” she said. “So we’re proud to have consolidated our position as the ‘challenger’ property portal.

“Being number two doesn’t mean being second best. It means being smarter, leaner and hungrier. It means having the best partnerships in the business — including MSN, Yahoo, Sky, Virgin Media and UpMyStreet. And it means we simply have to offer better value for money.

“Last year we doubled the size of our account management line-up and we plan to continue investing in our on-the-road sales and account management team — we are not a ‘virtual’ company just because we’re a dot com. We believe in offering support to our customers whenever they need it, face to face.”

Clearly all the major players from 2008 are determined to move forward in 2009 but, as ever, there will be new challengers and undoubtedly there will be casualties.

Property Index with their pay-per-lead proposition are one who may come through. Property Live will make some impression but their lack of marketing will mean that it is a long time before the public will be aware of them and they can drive significant traffic to agents.

Even look4aproperty might make an impression if the rumour that Dragons’ Den investor James Caan has backed them is true and he is able to get past the lack of delivery that has haunted them in the past.

This year will be challenging for all of us — particularly for the newspaper industry — and it may turn out to be the year that on-line advertising really does take over from conventional press and media advertising.

• Bob North is a business consultant and a member of estate agency specialists GCG Consulting. He specialises in applied technology, including website functionality and the introduction of IT systems and applications.

He was originally a partner in the 35-office Kent firm of Cobbs, acquired by GA in 1986. He became National Sales Director for GA Property Services and subsequently Strategic Marketing Director of Your Move. Following a secondment to the assertahome project, where he worked on the launch of asserta, Bob joined GCG as a principal. Contact him by e-mail bobn@gcgconsulting.co.uk or by phone on 07831 576073.