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Bob North

December 2008 / January 2009

Major changes on the portal front

Click here for all the latest statistics on portal activity >>

THERE have probably been more changes in the UK property portal industry in the last six months than in the last 10 years with consolidation of some portals as well as new entrants and new charging structures threatening to challenge the established order.

The graphic here now shows the new format of both the Propertyfinder Group and the Digital Property Group and so familiar names like Prime Location, Hot Property and FindaProperty are not shown on an individual basis.

Still included are Fish4homes and ThinkProperty but as you will see from the numbers these are both declining in site traffic and the competition in the property portal world is narrowing down to a big three — with Rightmove still leading the way.

They are however expensive to run — Digital Property Group’s marketing budget alone is some £17 million and it takes a lot of subscription income to pay for that. There may well be more change in the not-too-distant future as other sites compete for consumers’ attention, but we have to remember that the alternatives such as Property Index, Globrix and Property Live are purely mechanisms for introducing enquirers to property and property sites.

Portals on the other hand are of course introducers but they also provide other value. The subscription you pay brings you other benefits as well as consumer leads and those benefits need to be balanced in the cost benefit equation.

So what do the latest statistics, illustrated here, show us? Firstly, overall activity is down on the last month I surveyed and also down on the figures of a year ago.

I illustrate the relative positions for September 2008 by using the Rightmove figures to compare as they are at least on a like-for-like basis and perhaps are most indicative of the relative movement trends.

Year-on-year total property numbers on the market are up by some eight per cent but down seven per cent from May 2008. Office numbers are down six per cent from May and eight per cent year on year with a 16 per cent decline from the peak in January 2008.

Rental property has however shown marked growth with a nine per cent rise since June, 33 per cent growth since January and a massive 59 per cent increase over the year.

User sessions are down from a peak in January 2008 by a fairly considerable 34 per cent and enquiries by both e-mail and telephone are down seven per cent and 11 per cent respectively.

Comparing the sites for this September, Rightmove still dominate the key statistics. They have more property, more agents, more page impressions and more unique visitors.

Yes, the number of subscribing agents has dropped but so has the number of agents operating and Rightmove still has considerably more than the competition — although the Digital Property Group are catching up.

The popular agency blogs are trying to insinuate that Rightmove is in decline and that agents may be better off elsewhere. Believe that at your peril because there is no doubt that in the public’s eyes they are the site of choice.

They are in the top 25 of all UK sites — up there with Ask, Amazon and Orange. Many of you are only too well aware of the public awareness because you are asked so frequently by the public whether or not you are on Rightmove.

That doesn’t mean to say that you have to be there and many agents can make a very good case for alternative web strategies, but Rightmove are currently market leaders.

Maybe Rightmove could have helped themselves more by being a bit more sympathetic to the plight of agents and while some of the recent statements might have sounded a little brusque, to some extent they have listened and they have confirmed that there are no price increases this year.

Their commercial director Miles Shipside confirms this, saying: “We currently have no plans to increase our core price for sales members.

“While we offer excellent value compared with traditional media as a method of effectively reaching homemovers in these tough times, it would clearly be inappropriate [to increase charges] given the current conditions in the housing market.”

But it is not all about price — mainly it is about value and what you the agent gets out of your subscription and how you react to the leads that come your way. It still beggars belief that only some 50 per cent of leads are responded to.

Value is the byword of the Digital Property Group but their new pricing structure is causing some confusion.

The complication is that it is done on an individual basis but I am assured that when it is explained it is understood.

DPG chief executive Mark Milner said: “Pricing is set individually for each agent using a value based model, which takes into account the agent’s location as well as the number of properties listed and their average value, to calculate a fair and competitive price.

“The monthly fee per branch ranges between £169, for an agent listing less than 30 properties to let outside of London, to £799 for a central London estate agent listing over 60 properties with an average value of over £1 million.”

The Propertyfinder Group are much more modest in their charges which start at £100 and rise only to £275 for their top of the range Business Maximiser Membership for which agents get enhanced presentations with logo and high value feature property listings.

They also have exclusive partnerships with some 12 UK websites to either provide them with property search facilities or provide them with feeds. These include Virgin, MSN, Yahoo and Sky.

This brings me back to the ‘other’ benefits of the portal sites. Your subscription does not just get you traffic and leads. It does also give some definite value-added services. Traffic reports to enable you to feed back to vendors, marketing tools and enhanced presentation are common to all three of the majors.

Rightmove also have their valuation tools and they have invested in training for agents to get the most from the products they offer and in other areas like the Property Misdescriptions Act and Money Laundering Regulations.

Clever agents are starting to use the enhanced listing tools to generate revenue and I hear that a number of agents are now moving back from a ‘no sale no fee’ basis and incorporating promotional tools, with HIPs, to present a marketing charge for putting the property onto the market.

Quite right. Why in these times does anybody want to go to the expense of putting property on the market without some contribution towards the cost?

So there are other benefits to subscriptions. But what about the quality of the leads and what are leads worth? The statistsics show that on average an agent gets about one lead per property per month — leads being telephone calls, e-mails and clicks to agent sites. Of these, the first two are probably the most valuable.

Fish4 have recognised this and have amended their pay-per-lead model. Clicks now are free — only e-mails and phone calls are charged, at £1 and £1.50 respectively.

ThinkProperty have abandoned their charging model and now the site is free to all but there are still special benefits for their software customers in that they get preferential logo treatment.

I find it strange that they treat agents who don’t use their software as second-class citizens and am not surprised that there has been a lesser take up from other agents. It also has a detrimental effect on the quality of the site in that it is very apparent that they do not have critical mass and one is forced to redirect to the sites that do have real property stocks.

Regrettably also for ThinkProperty, their traffic has dwindled as they have been forced to review their Google advertising policy and have reduced dramatically their paid for keyword policy to the extent that they have dropped out of the top 10 in the ComScore ranking figures.

BUT it has also reduced their overhead costs and they are now confident that with costs running at under £1 million they will survive and will deliver results from their investment in search engine optimisation.

I have been informed that the change in pricing is a precursor to introducing a pay for results model at some stage in the future. They do not, however, feel that the present time is the right one to charge — more of that in the next issue.

One could be forgiven for writing off Fish4 but maybe they are still in the game. Stewart Black, who has taken over responsibility, says: “The Fish4 site has just undergone a £2 million re-brand, incorporating additional functionality, which confirms our commitment to the business and to continuing to grow it and keep it as a major player.

“In contrast to some sites, Fish4homes is adding between 70 and 90 new clients each month. Fish4 is owned by two of the largest regional newspaper groups, and receives exceptional local and regional coverage through a network of over 200 websites and 500 newspaper titles, which gives us a unique audience.

“Since the new site went live on October 7, searches have increased by 39 per cent.”

Fish4 are committed to the next phase of their site development and with their revised charging structure they may be poised to take advantage of a swing towards pay per response.

And pay per response is, almost certainly, one of the ways of the future. It is certainly the model being promoted by newcomer PropertyIndex but it is too early to judge whether or not they will be successful as they just do not have the property stock at present and neither do they have the traffic. They are however investing in their sales team and are engaging agents with their simple approach — no set-up fee, no contract, no monthly subscriptions - just pay for results.

What of the ‘free’ sites? Globrix is the one that gets the most attention - and it is becoming a force to be reckoned with.

It has resolved its differences with GMG and uploads from the software suppliers they control and it certainly does have a critical mass of property for sale and to let. The question is will it attract sufficient consumer traffic to provide traffic to the agent sites? Its model is to redirect traffic immediately to the agent website and it therefore measures its success on the number of clicks to agent sites.

The problem is for agents to recognise that the traffic is coming through and is there sufficient traffic? Their ComScore traffic has dropped below ThinkProperty and Fish4, and despite the backing of News International it has been losing traffic of late.

The much-vaunted PropertyLive site cannot really be commented on at this stage. It is only in beta form, has little property on the site and there are questions as to how it is going to reach the consumer’s attention.

While I am sure it will resolve some of these issues, it would be a very brave agent who forsook all other sites to promote their clients on PropertyLive.

One last point. I am often asked about Nestoria who are one of the few sites that seem to be rising through the rankings and was up to sixth place in the September ComScore statistics.

Are they a portal? How does an agent get their exposure? The answer is that they are actually a vertical search engine and you cannot join them direct.

They work with a number of the portals and other aggregators and to have your properties with them you have to be on one of their partner sites. They too click traffic straight through to the agent information on the relevant supplying site — Fish4, PropertyFinder, Telegraph, PropertyIndex, Rightmove and others. They work with the market leaders in the four European countries they operate in — Rightmove in the UK, Fotocasa in Spain, Immoscout24 in Germany and Immobiliare in Italy.They also power the Channel 4, Daily and Sunday Telegraph and The Independent sites. They are working with the portals and other partners to complement the service the portals provide and to make them more effective. They are if anything a competitor of Globrix.

Click here for all the latest statistics on portal activity >>

• 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.