This post is going to be a rather shamelessly self-indulgent one that will only serve to comfort the needs of my inner geekhood, which unfortunately takes immense joy from all things online-marketing related, especially in the property vertical. I’m no expert by any stretch of the imagination, but I am an enthusiast that’s compelled to offer unprofessional and exceptionally arguable insights on issues I’m drastically unqualified on. It’s tragically what I do best.
You probably won’t learn much as a sole landlord/tenant or take any particular interest in what I have to say, but sure enough, I’m sitting here joyfully erectile while fluttering around with the anticipation of talking online-technology. It’s one of those moments which I’ll happily indulge in alone, but perhaps fellow industry enthusiasts and agents will share some interest, because it’s relevant to you lot. Of course, also feel free to tag along if you’re just curious.
The new property portal & their initial obstacles
So, some of you may already be aware, particularly if you’re an agent, OnTheMarket.com (OTM) launched a couple of weeks ago. A brand new shiny property portal with great ambition, striving to rival the titans of the industry, Zoopla and Rightmove (the two biggest portals eating up the majority of the market share, although Rightmove is significantly ahead of the game). Tall order; perhaps embarrassingly futile. Either way, there’s a good old fashioned playground fist-fight… FIGHT, FIGHT, FIGHT!
The new portal was created by a bunch of agents that were fed up of Rightmove’s allegedly extortionate pricing structure, so ambitiously packaged together an alternative solution, which took 4 years to develop and is substantially cheaper for agents to join. Seems like a reasonable idea. I’m frequently hearing groans and mutterings from agents, complaining about the excruciating (and escalating) costs of using Rightmove. While that maybe true, you certainly can’t accuse Rightmove of not working.
According to this BBC report, Rightmove’s basic fees are £720 a month for each branch of a sales agency, and £395 a month for each branch of a lettings agency. OTM said its typical fees for a selling agent might range from £177 a month to £655 a month depending on its location. The prince differential clearly opens up the margins and allows for savings. Although, there’s not much difference between £720 and £655 (Rightmove’s average Vs OTM’s top-end price), which left me voraciously scratching my head. And I’ve heard Zoopla is cheaper than both for some agents. So are OTM really that much better value considering how much smaller they are? If you put a price on each lead, they’ll probably work out more expensive. Anyways, whatever.
While the foreseeable future remains a little hazy, there has been a lot of media coverage around the birth of the new portal, which has caused enough ripples to get people talking. OTM are obviously giving it a good ol’ heave-ho by beating the crap out of their brand until it launches off the ground. According to The Financial Times, OTM mashed together a 18-strong team of regional marketing folks and a £6.5m marketing budget. Now, that may sound like a handsome package and enough to ensure most of us will have a good time, but comparatively it’s a very small drop in the ocean when you consider that Rightmove made £104m net profit last year. However, there has been some evidence of OTM’s marketing prowess surfacing; I did manage to catch a glimpse of their nicely produced glossy TV commercial last week. Albeit, it was on one of the lesser viewed fetish-based channels, which I believe may have been ‘Quest’, or maybe it was ‘Dave’, my memory fails me.
The majority of the country is familiar with Rightmove, and that’s why it’s the “go-to” property portal, so I suspect it’s going to take much more than a few pretty TV commercials to brain-wash the current leaders’ out of our memory banks. And with Rightmove reporting record visits only a couple of days ago, OTM seems to have had virtually no effect on ‘the mob’ so far. Sadly, reprogramming ‘human minds’ is only part of the challenge, OTM also need to reprogramme Google and other search engines like Bing, which have indexed (saved) the living shit out of millions and millions of Rightmove’s and Zoopla’s webpages. Surprisingly, I’ve yet to hear anyone mention this extremely significant factor.
Zoopla and particularly Rightmove, are trusted authorities in the eyes of Google, they virtually rank well for every organic search term resembling “Property for sale in [insert county/town/postcode]”, plus thousands of other relative combinations. I have no doubt in my mind that a large portion of Rightmove’s/Zoopla’s traffic is generated from organic results in search engines, and that’s something extremely valuable OTM won’t be able to just ‘snatch’ away with mouth-watering fees and shiny posters, it will literally take years of online development, which tragically conflicts with OTM’s fast-paced takeover strategy (something I will discuss below). Rightly or wrongly so, Google largely defines the success of most
classified websites these days, and it’s extremely difficult to win without their support.
If you think about it logically, it’s the search engine traffic that OFM needs, because everyone else is already going to Zoopla/Rightmove directly. Making the direct-users shift mind-set will be difficult, but those typing search terms into Google are showing no signs of loyalty- that’s why they’re using a search engine. They’ll be the easy prey, but predictably more difficult to access while OTM have virtually no presense Google. Right now, the large chunk of search engine users will continue to end up on Rightmove or Zoopla because they both rank devastatingly well. What a pickle.
My first impressions of the website
I was quite eager to scope out the new competition (eager in a relatively sane sense, I wasn’t pissing my pants with excitement or camping outside the front doors 4 days prior to launch like a psychotic iPhone goon), as there’s been plenty of hype and enthusiasm circulating. When the day came, I quickly launched myself out of the gates and headed straight over to the OTM website…
“errr is that it?“, my thoughts as I left bewildered after racking up a few dozen page views, wondering where the innovation and slick design was hiding after 4 years of development (there’s nothing wrong with the design, mind you, it’s just a bit bog-standard).
Bear in mind, this website is going up against the market leaders’, so I expected to see innovation dripping out of every orifice. I don’t actually know what I was specifically expecting, but something a little different, something to make me think, “now this sets them apart, if only a little! They’ve got a good chance here”
Maybe I was naive by missing the point; perhaps it wasn’t about offering a new product/service for the end-user, but simply an alternative for high-street agents to save money. If that’s the case, which I’m sure it is, then consider the launch a massive success, because all I saw was Rightmove/Zoopla repackaged, with a hell of a lot less features and properties. Truly, “a portal for agents, owned by agents.” I genuinely hope the agents on OTM enjoy looking at each others properties on their shiny new portal…
I understand the end-user isn’t putting the food on the OTM table, it’s the agents, so enticing them with lower fees seems like a good way of getting the finances and stock levels in good order. But that approach seems flawed; eventually the end-user is going to determine the fate of OTM, and while I believe they are aware of that, I feel they’ve grossly neglected that element during the early phases by focusing on agent acquisition alone.
If the end-users have no reason to switch and breakaway from something that works perfectly well, why would they? Surely the agents will eventually always go where the enquiries are generated (and where Google directs to), and not vice versa. Reason being, it’s A LOT easier and cheaper to sway agents compared to an entire nation that already uses Rightmove/Zoopla for free. Not to mention, without anything innovative creating traction, what does Zoopla/Rightmove really have to do if they start feeling the pressure? Oh yeah, lower their prices for agents until the competition is squashed. That’s really it.
Does anyone remember the classic movie BIG, starring Tom Hanks? There’s a scene where he’s in a meeting, being introduced to a new toy concept which lacks imagination and originality- a skyscraper that transforms into a robot. Hank’s character petulantly replies, “I don’t get it” because he didn’t see anything new being offered to the market. Yeah, similar scenario. I don’t get it. I really don’t, and I’m not intentionally trying to be a condescending asshole (whether it comes naturally is another issue).
Don’t get me wrong, I’m not against competition; I’m not saying no one new should enter the market, but I would expect to see a unique selling point in this circumstance. If the underlying strategy is based on the movie ‘Field of Dreams’, where the the moral of the story is, “build it and they will come” (when I say “they” I mean the users, not the agents)… this may just turn out to be a hysterical and historical comedy.
Perhaps I’m being overly critical (someone tell me if I am), but I genuinely fail to see the point in launching a new product that doesn’t offer anything new to the end-user (the consumers and vendors, the people actually looking to buy/sell property) in a market place that’s already being massively dominated with a working solution. Like I said, I’m not a marketing expert, and there’s a collaborative 18-strong marketing mind powering OTM forward that can effortlessly stomp my puny mind into the ground, so I’m probably missing something incredibly obvious here.
Someone enlighten me.
OTM’s Marketing strategy
As part of OnTheMarket’s strategy to become the biggest and the best ‘quickly’, they have riddled their T&C’s with a rather unusual clause, which states that any agent that signs up to their service can do so ONLY if they market on one other portal. How legal that is, I have no idea. Seems a little sketchy though.
Most agents in the country are either using one, the other, or both (Zoopla and Rightmove). So, for example, if I’m an agent that is currently marketing my properties on Rightmove and Zoopla, I’ll have to let one go before being able to market my properties on OnTheMarket.com. They’ve also made it clear that they won’t allow virtual/online agents subscribe to their services. Ballsy move, and profoundly clumsy in my opinion!
Ultimately, I think Zoopla will be affected the most by the policy, largely because most agents may as well shut up shop if they abandon Rightmove, but I don’t think Zoopla will be overly concerned. Incidentally, there are reports of some agents crawling back to Zoopla already, only after 2 weeks of making the switch, and I suspect many more will slowly start to shamelessly follow. As said, Zoopla does have Google on their side, and that’s a massive boost/incentive.
It doesn’t take a genius to decipher OTM’s reasoning and intentions behind the ‘us or them’ strategy. I get it. But God damn, what an asshole’ish and detrimental move. An estate agent should be able to choose where and when they wish to market their properties. Limiting that choice alone would leave a very sour taste in my mouth if I was an agent, and immediately repel me from their services. It just feels overly aggressive and sets a bad principle.
If Rightmove were to enforce a clause into their contracts saying that their subscribers are forbidden to use OnTheMarket… I wonder who would come out on top (supremely rhetorical question)? Probably not legally enforceable, but you get my point. I’m sure Rightmove’s pockets are deep enough to conjure up something just as devious and unscrupulous, but I hope they don’t.
Many people have classed OTM’s marketing strategy as “interesting”, but that’s definitely not how I’d describe it, because I think the hostile strategy signals a clear misunderstanding of the market and total negligence for the end-users, which ultimately will result in a poor user-experience. I personally don’t think they’ve been criticised enough for that.
My main gripe isn’t entirely with the limitations put on agents, it’s with the consequences it will have on the overall market for buyers and sellers. OTM’s strategy is dividing the selection of properties available to consumers because agents are being forced to limit their avenues to market. That means the people losing out the most are the sellers and buyers.
From the perspective of a buyer, I want to use a portal that offers the most easily accessible variety of properties. From the perspective of a seller, I want my property listed on as many portals as possible. It seems that the most important people in the equation, the people driving the market, aren’t in the portal’s best interest- so why would I use their website? It’s also worth noting, there are 1.8 million landlords in the country, many of which are quickly starting to see the benefits of using online letting agents, and OTM have already bitten that large pool of people who are already custom and frequent to buying/selling.
Essentially, they don’t seem to be trying to better the market.
Early performance stats
According to this article on Property Industry Eye, “the latest data from independent web monitoring firm Hitwise shows that over the first two weeks since the launch of OnTheMarket (OTM) it has attracted a total of 194,000 visits (an average of 14,000 per day) versus 18.8 million visits for Zoopla Property Group (ZPG) over the same period.”
Hitwise is a company that tracks daily rankings of the world’s most popular web sites by monitoring the activity of surfers. I’ve used Hitwise before, but in a different vertical, and the data was pretty accurate/useful. However, it’s still only speculation, we can never really verify how cleansed and accurate the data is, but if the figures are even loosely accurate, I suspect OnTheMarket is in SERIOUS trouble, especially after putting out national TV commercials, which we can all assume cost a small fortune.
To give you some sense of relativity, I can tell you that this pitiful, dark hole of a blog, which some refer to as the armpit of the internet, currently generates more views than those reported. If that’s not a reason to worry and call an emergency board meeting, I don’t know what is. I haven’t spent a penny on marketing, very few people can stomach what I have to say, let alone endorse my words, and I rarely have anything useful to share.
Now, it’s important to make clear distinction between “views” and “unique visitors”, because they’re game-changing figures. The stats from Hitwise’s report indicates that OTM is receiving an average of 14,000 visits a day, that’s not “unique users”, that’s “visits”
The nature of classified listing websites is that each “legitimate” user will typically generate multiple page views (e.g. each person will look at 10 properties, and that’s being relatively stingy), so that instantly sets the unique visitor count at 1,400 per day (14,000 views / 10 page views = 1,400 unique users). Of course, I’m only speculating here with unverified data, but if my blurry calculations are close to being accurate, I suspect management is walking around with respirators and pacemakers, wondering where the fuck they went wrong and why the end-users don’t give a shit that their agents are getting a better deal through their service.
Realistically, the scenario is probably worse, because I suspect much of the page views generated so far haven’t been by legitimate home-buyers, but more so agents, reporters and industry enthusiasts snooping around. I alone probably contributed to 200 of those ‘worthless’ page views. Maybe more. I’m sure there are bigger anoraks out there than me, artificially bloating the counters… frantically looking for something innovative/new.
Yes, it is early days, and you may think i’m being unfair, but bear in mind their strategy means they NEED to deliver results to their agents FAST, because many of them have been forced to potentially drop one of their biggest lead generators in order to use OTM’s services. If those clients aren’t satisfied quickly, in the form of enquiries, they’re going to potentially lose out on thousands of pounds, and consequently go back to their former portal. OnTheMarket have put themselves in an extremely volatile situation which demands exceptionally fast results. Now this leads back to what I was saying about Google earlier: OTM need Google to stand a chance, and Google won’t help them to any significant degree for an extremely long time, so the million dollar question is, how long are the agents that made the switch willing to hold out for, and are those agents doing what’s best for their clients?
I keep reading press releases about how OTM keep signing up new agents at impressive rates. All that seems like is smoke and mirrors to me, a tactic set out to distract us from the question that actually matters. Where are the buyers going? Or should I say, “where are the buyers STILL going?”
Agents only care about one unit of measurement when it comes to these portals, and that’s lead generation/enquiries. That’s the bottom line.
The future of OTM?
In my opinion, they’ll either close the doors in the next couple of years after exhausting their funds, or they’ll completely change their strategy, which will involve a less demanding and hostile entry to market. Their strategy seems suicidal right now, because their competitors are just way too big and powerful (especially in terms of Google organic search results; a factor I suspect many agents were strategically misdirected from during the sales pitch), and they’re trying to disable them in the wrong way during the wrong time.
Their burn rate must already be astronomical, I wonder how long they can keep it up for? If they didn’t steam-roll into the market heavy-handed, they probably would have given themselves a better chance to cause some noticeable and painful damage over time.
Years ago (here’s an Uncle Albert moment for you), I used to be a senior member of an extremely talented team that was involved in the classified automobile industry. We were in the same industry as Autotrader, the obvious market leader’s by a country mile. The scenario was incredibly similar to what I’ve been discussing. Like everyone else in the market, we struggled to come with in an arm’s distance of Autotrader’s market share, even though our prices were so much easier to digest. Their brand was just too prominent to cause any damage. It didn’t matter how cheap our prices were, the car dealers didn’t care, because the buyers (the end users) were all still going to Autotrader (that’s the clear advantage of being the first in the market). However, because the market was so big, we were able to capture a tiny percentage, which alone made us an extremely profitable company, but it took almost 6 years to get to that position.
We didn’t initially try to overtake Autotrader because there was no point, it would have been futile (although the aspirations were there), so we placed ourselves as an ‘additional’ source of lead generation for the car dealers, which still provided an excellent return. We didn’t try to divide/ruin the marketplace, but more importantly, we realised that attracting the car dealerships (i.e. increasing our stock availability) wasn’t the singular key to success, it also involved getting eyes onto our website (that’s actually the toughest part, because the users are using a FREE service either way) and giving the consumers maximum variety. I think OTM’s approach is kind of backwards in that sense. They’re not focusing on ALL sectors involved with driving the business forward, but more so on the area where the money is sourced, but ironically, that’s not providing their customers with a good service, which I believe will be the reason for their demise. Realistically, I don’t think many agents would have shunned off £200 extra a month on another portal (on top of Zoopla and Rightmove) that received so much media coverage, even if it’s a gamble.
I suspect OTM will drag across many of the smaller and bitter agents that are struggling to keep on top of Rightmove’s fees; they’ll be the easy targets. But the flaws with OTM’s business model will quickly become apparent, so I believe many of them will filter back, sooner rather than later. I also feel agents that have switched are giving their customers a disservice at this moment in time. The loss of enquiries will almost be instant if a switch is made.
If I was an agent, I’d wait and see before signing up, and also allow their brand to mature in Google. Then maybe I’d consider signing up… but probably not, because I’d still be annoyed by their aggressive and demanding strategies which revokes my freedom to market where I God damn please…!
I don’t want this post to get misconstrued as an anti-OnTheMarket campaign, because it’s not (and I hope I haven’t turned myself into an enemy). I want them to succeed, but only if they’re going to better the entire process of buying and selling online, and not just focus on their vested interest (which correct me if I’m wrong, seems to be the case). Granted, I am an avid fan of Rightmove, but only because I think they’re doing “it” right from the perspective of an end user. I would like to see competition and innovation, but most importantly, better value for both consumers and customers. Unfortunately, I don’t think that’s being delivered by the new player and their unfriendly stampede into the market.
Of course, I could be wrong. About everything. Oops. But as a landlord and as a seller, I NEED my property on Rightmove and even Zoopla, period. I wouldn’t use an agent that didn’t subscribe to those services and I think many will feel the same. Perhaps that’s something agents shouldn’t quickly forget.
I can appreciate and imagine that Rightmove’s forever increasing fees are causing great concerns for agents, so I understand the rebellion. I know many agents are rooting for OTM to succeed, but this new proposition doesn’t seem to be an ideal or fair solution.
What does it mean for landlords?
For the best chances of finding tenants quickly, I’d only use letting agents that use Rightmove and/or Zoopla. Both is better, of course. At these early stages, I wouldn’t even consider it a positive or negative that an agent is using OTM, it’s on the same par as sticking an advert on your car window.
I know many agents frequent my blog, so if you’re one of them, I’d be interested to hear your stance on the matter- whether you decided to make the switch or not. If so, what was your reasoning? Similarly, if you decided to pass, why?
Update: 20th Feb 2015
This video just popped up on YouTube :)
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.