May 2008

Propertyfinder aim for solid second spot as consolidation wave goes on

FOLLOWING on from the news that the Daily Mail General Trust sites Primelocation and FindaProperty are consolidating under the management of Mark Milner, comes the announcement that Propertyfinder Holdings Ltd have bought HotProperty — or rather they have bought the parent, Sherlock Publications Limited.

Propertyfinder Holdings is jointly owned by Real Estate Australia and News International, each with a 50 per cent holding. They have paid £5.6 million.

In addition to the HotProperty website, the purchase includes the HotProperty, Renting and Overseas print publications which have a combined circulation of some 120,000.

Unlike DMGT, who have yet to decide what they are going to do to manage the Primelocation and Findaproperty sites, Propertyfinder have stated that they will run the two websites in parallel, with estate agencies having their listings appear on both sites for the subscription price of just one of the sites.

Neither site proposes to alter their charging structure which will be interesting, as the charging for HotProperty is quoted as between £59 and £129 per month and Propertyfinder is charging between £120 and £175 per branch - with optional additional services extra.

It looks as if agents may be able to take advantage by opting for the less expensive rate but no doubt new joiners will only be offered one rate.

The rationale for the acquisition is quite open — it is to try to challenge Rightmove and establish Propertyfinder in a clear number two spot.

Of course, Propertyfinder put their own spin on it. Simon Baker, managing director of the REA Group, said: “Since Gillian Kent took over as chief executive at propertyfinder.com, we have really turned up the heat in the UK property portal market.

“This acquisition is a win for estate agents already advertising on propertyfinder.com and/or hotproperty.co.uk because they will have all their properties listed on both sites, for the cost of one subscription.

“The result for estate agents will be more leads at no extra cost.

“The acquisition of hotproperty.co.uk adds significant numbers of new agents and consumers to the propertyfinder.com business at a very good price.

“As UK estate agents focus their marketing budget on quality, value-for-money internet sites, propertyfinder.com (and hotproperty.co.uk) is well positioned to deliver more leads at a lower cost per lead.”

Will this news cause agents to re-evaluate their portal strategy? And who will be the winner if they do?

At a time when agents are looking at all their costs, evaluation of advertising is ongoing.

Of course, some agents are contracted on an annual basis and partly for this reason Rightmove are unlikely to see any downturn in their agent numbers.

Indeed, Rightmove financial director Miles Shipside confirms that the numbers for 2008 have remained static — even with a few agency offices closing for business.

The secondary portal sites may well be more susceptible. Some of them do not have the same rigid contractual structure as Rightmove and have been offering incentives for trials on the sites and more flexible terms.

Those may well be the ones to suffer on review — but it should all depend on the quality of the leads and the analysis by agents of the cost of the lead.

It will be much more difficult for Primelocation and FindaProperty to adopt a similar strategy of simply listing their joint properties on both sites at the same subscription.

FindaProperty are significantly less expensive than Primelocation. FindaProperty charge new customers £110-£275 a month based on the number of properties and branches advertising.

Primelocation on the other hand are charging a premium — even above Rightmove — with a top charge for Central London offices of £525 per month, Outer London at £420 and the remainder of the country £300.

These figures look less easy to justify as Primelocation declines in the rankings of internet marketing analysts Comscore.

They have slipped to sixth in the latest figures and have now fewer than 900,000 unique users according to Comscore.

Their decline of some three per cent contrasts with FindaProperty’s increase of some five per cent and a Propertyfinder increase of some six per cent.

Rightmove stands in a different league with over twice as many unique users at some 3.15 million.

Interestingly, we are now seeing a further rise of the indexing sites. Nestoria have made the number eight position with 530,000 unique users over and above HotProperty, who are in 21st place with 250,000 unique users, compared with their 16th place in February with 330,000 unique users.

Indeed, HotProperty are only one place and 4,000 unique users ahead of the rising star, Globrix, who have moved up to 22nd place and seem to be in the ascendancy.

Globrix are also owned partly by News International but they have a totally different strategy to the more conventional portals.

Chief executive Dan Lee has reiterated his promise not to charge agents for listing and he has been deluged with agents wanting to provide direct feeds to the Globrix site.

Both Nestoria and Globrix provide agent leads direct to the agent website. Nestoria do not charge the agents either, but they do not take direct feeds, working instead with portals to provide them with cost-effective traffic on a pay-per-click basis.

Propertyfinder have had support from one quarter that has not been forthcoming in the past.
Connells, one of the founder shareholders in Rightmove, have confirmed that they will now be listing their properties on Propertyfinder as well. That in itself brings some 500 branches and an additional 30,000 properties.