The battle between OnTheMarket and the property portal industry (well in reality Zoopla) has stepped up a notch or two. As we reported earlier today, Zoopla continues to take the game up to OnTheMarket - this time answering some of the latest claims by Ian Springett, the CEO of OnTheMarket.
So what were they responding to? It was an email sent by Ian Springett to the OnTheMarket "members". The email, which is reprinted in full below, had a number of claims including 1 million unique visitors in the first 2 weeks, 4,700 contracted members and a multi-million marketing campaign. While some of these claims lacked evidence or sourcing (for example the 1 millionth unique visitors in 2 weeks which seems a little hard to believe), what was more interesting was the emotive and highly charged language being used.
For example, at one point the email says "To break up a duopoly of major portals which, unchallenged, threaten the business model our member firms operate, you have created your own portal, OnTheMarket.com." I am not sure how operating a property portal threatens the business model - especially when neither are operating as agents and taking commission.
As stated in the email, OTM has the goal to become the #2 portal as quickly as possible and then to be a credible alternative to the number 1. From this, it is clear that they believe that they can't knock of Rightmove and, at best, believe (or is that hope) that they can overtake Zoopla. One of the challenges in this is that they don't actually define how they are ranking the portals? Is it listings, agents, visitors, leads generated, revenues, profitability or market cap.
In reality, the only measures they have any chance of knocking off Zoopla by January 16 are the number of listings and the number of agents. However neither of these are a true measure of leadership. Leadership is not about content (volume of listings) or numbers of agents. Agents is a poor measure as if you have the bottom 80% of agents using you (as defined by the number of listings), it is probably not as good as having the top 20%. In addition, simply comparing the number of listings doesn't make much sense either. From a consumer perspective, if you are looking at the number of listings, Rightmove and the aggregators (Trovit, Mitula, Nestoria) will all have more listings than OnTheMarket.
Leadership is about results - leads generated for the advertisers. It will be interesting if they are ever reported by OnTheMarket. Even if they don't report the number of leads generated, the agents themselves will know who is really generating the value. You can beat your chest for ever and a day about listings and agencies using the service, however if you are not delivering the results, it is all for nothing!
Enjoy reading the email to the industry ...
Now that your OnTheMarket.com portal has been live for a short time, I thought it worth giving you an update on our progress on delivering the Agents’ Mutual strategy.
Agents’ Mutual strategy - recap
To start, it is probably worth restating the approach at the heart of the Agents' Mutual strategy which thousands of leading firms have already committed to support.
To break up a duopoly of major portals which, unchallenged, threaten the business model our member firms operate, you have created your own portal, OnTheMarket.com. To give it a chance of developing and becoming a strong and sustainably low cost alternative which works in your interests, you have committed to use it in place of either Rightmove or Zoopla and to the exclusion of other portals. The strategy leverages the control agents have over where they place their listings and their listing fees. A further opportunity members have to create a valuable and unique user benefit is by giving OnTheMarket.com their new properties 48 hours before they are released elsewhere. Almost two-thirds of member offices have indicated support for this ‘Earlybird’ initiative.
One of the assumptions in the strategy is that motivated and active property-seekers (as opposed to the millions of casual browsers who may also have property alerts/visit portals for interest's sake) are using both major portals. Accordingly, those property-seekers who might previously have found you and your properties via Zoopla will readily find you and them via Rightmove (and vice versa). It may take a little time for this to take effect but many firms are already reporting seeing it in the flow of leads they receive.
In parallel, with the committed support of large numbers of members, OnTheMarket.com will grow rapidly its traffic and lead generation using the listing fee income being generated from members to fund strong marketing campaigns, combined with their powerful co-branding and promotional efforts.
Membership growth to date
Having started this time last year with the 1820 agent offices of our initial Gold members, I am pleased to tell you that we have now passed the 4700 offices mark for contracted member offices. Over 400 of these offices were recruited during January alone and some are still to be added to OnTheMarket.com pending the run-off of their contracts with portals they are dropping.
More than 4300 of the total 4700 offices are contracted for 5 years as Gold and Silver members, providing an immensely strong ‘anchor tenant’ group for your portal. The balance is our recently-recruited Bronze members who commit, initially, for one year.
Our sales team are committed to driving membership up at least as much in the year ahead as was achieved last year. Their efforts should be aided by having a live portal and highly-visible marketing to support it.
I am pleased to say that, having received the initial Gold member funding on 6th March last year, the Company was, from a standing start, able to deliver OnTheMarket.com in the month originally promised at that time and on the day it committed to last November. Given all the build-up and the immense promotional support given to us by members, the team here saw it as imperative to hit the promised date to ensure that momentum was not lost and that the launch achieved maximum impact.
It is right to acknowledge that the move from having no portal one day to a fully live one with more than 4300 offices listing on it the next, threw up considerable operational challenges, not all of which were under our direct control. A small proportion of members did not get the service they rightly expect and if yours was one of these firms then please accept my apologies and my commitment to make things right.
Feedback from members, (unbiased) commentators and the public about your new portal has been universally positive. The clean and clear presentation of search options, search results and your property details differentiates OnTheMarket.com from its rivals. The benefits of a fully-responsive design which adapts to device screen size is now evident to all. The portal is lightning-fast, delivers search results in precisely the format the user chooses and presents your properties in the best possible light. The presentation is geared to encouraging buyers and tenants to contact you about the properties you are marketing in whatever manner suits them best – this is our purpose.
The portal we launched with has already been improved significantly in response to member feedback. We are now delivering continuous improvements, both small and large, to ensure OnTheMarket.com becomes the favourite portal for our member agents and the property-seeking public. One of the benefits of the state-of-the-art platform we have built is that we can react rapidly when change is needed.
During the months running up to launch, we have been asked many times for information regarding the choice of ‘other portal’ being made by members. We always avoided releasing any information, not least because we were not gathering any and members were, in any event, free to defer their individual decisions on the matter until just a few weeks before our launch date.
It is now apparent that over 90% of our 4700 member offices belong to firms which have chosen to retain Rightmove as their ‘other portal’ alongside OnTheMarket.com.
As a result of the choices made by our members, Zoopla has already lost large amounts of property stock to OnTheMarket.com. Zoopla is currently using outdoor/buses/taxis and radio, media which we believe are targeted primarily at agents. It has not advertised on TV since October.
We have plenty of examples of areas where OnTheMarket.com already has stronger available property stock than Zoopla (and some examples where it has more stock than Rightmove in those few areas where members have retained Zoopla). The swing to OnTheMarket.com is increasing all the time as we continue to grow membership.
Marketing and usage
OnTheMarket.com needs to grow agent membership, consumer traffic and leads as rapidly as possible. To this end, we are running a multi-million pound marketing campaign which commenced on 1st February. Its objectives are:
- Build awareness, understanding and memorability of OnTheMarket.com
- Persuade/convince the audience to visit and search on the portal
- Create the virtuous circle whereby more consumer visits/leads attract more agent members, which increases the marketing expenditure and increases the property inventory, which leads to more consumer visits/leads, etc., etc.
The largest element of the marketing plan is our national TV campaign which runs on mainstream terrestrial and leading digital channels using 40", 30" and 10" ads. These ads are being aired more than 3000 times in February alone. We have already sent out to lead contacts the shape of the marketing plan over the last couple of weeks. To ensure we reach those who watch little/less TV, we are also advertising heavily in national quality press titles and property-focused magazines. Archant is running extensive (free of charge) advertising for us across all its newspaper and magazine titles until at least the end of April.
We are using digital display advertising in high-traffic online environments such as MailOnline and Telegraph online. And we are using PPC to give OnTheMarket.com a presence on Google whilst our natural rankings build up - something which always takes time. OnTheMarket.com has been painstakingly optimised for search engines and we believe its progress in the natural rankings will also be accelerated by having exclusive content (earlybird properties), high volumes of relevant content, 'authority' (in-bound links from other high traffic websites) and rapidly growing consumer visitor numbers.
All this central activity is complemented by the huge impact of member agent co-branding in office windows, marketing literature, advertising and digital communications. Those who are doing this fully, including mailing their own applicant databases, are reaping the benefits and reducing objections.
The PR battle in the run up to launch was difficult as it was possible for our rivals (especially commentators and/or media associated with Zoopla) to make unsubstantiated assertions about your Company (e.g. it would fail to attract agents/funding; it was anti-competitive; it would not be a credible portal; it would not launch on time; etc., etc.). Since the launch of OnTheMarket.com, it has been possible for us to engage more fully and many journalists have a greater appreciation of what is at stake and the scale and strength of our market entry. Our voice is being heard and this is very well illustrated in the coverage arising from last Thursday's trading statement by Zoopla Property Group. Please see below some examples from the FT, Times, Telegraph and ThisisMoney which illustrate the point.
FT – "Full house - Zoopla rocked by arrival of OntheMarket"
FT – "Two's a duopoly, three's awkward for Kirstie, Phil and Zoopla"
The Times – "Sharkish encounter as rival bites into Zoopla"
The Telegraph – "Zoopla has been hit by rival property portal, its founder admits"
ThisisMoney - http://www.thisismoney.co.uk/money/markets/article-2950454/Zoopla-suffers-11-drop-advertiser-numbers-new-online-rival-OntheMarket-starts-bite.html
The combined effect of all these activities is starting to show:
Less than 2 weeks after our marketing campaign started, we recorded our 1 Millionth unique visitor to OnTheMarket.com on Saturday.
Our traffic will build rapidly from here as more people become aware of your new portal and more agents join it.
Keeping the momentum
The decision to support Agents' Mutual has been made, in each firm, by their principals or directors because they recognise the medium term strategic imperative. Their objectives are to preserve and grow business value. We all understand, however, that in the short term the move to OnTheMarket.com from one of the duopoly portals will have made life harder for those operating on the front line. However, where members have been proactive in communicating their portal strategy to staff and clients, this seems to have avoided any material impact on business, notwithstanding the tactics being employed by Zoopla, the corporate agents associated with it and other non-member agents.
We have provided a variety of materials to help agents counter the touting and propaganda of our rivals and communicate proactively with vendors and landlords. These include the very strong reasons why a listing on Zoopla is not always a good environment for those selling or letting and the fact that nationally, regionally and locally, most leading independent firms have already joined OnTheMarket.com. Please do all you can to keep your staff informed about the positive progress OnTheMarket.com is making.
Objective for the year ahead
Members will be aware that, from the outset, our strategic objectives have been:
· To become the No.2 portal as rapidly as possible; and then
· To build to become a credible alternative to the No.1 portal.
The portal choices made by members indicate overwhelmingly that, nationally, Zoopla is regarded as the weaker of the two portals they had been using. Accordingly, our objective for the year ahead is:
To replace Zoopla as the No.2 portal by January 2016.
As of 16th February, a search on Zoopla showed that its available properties for sale and to rent in England, Wales and Scotland totalled just over 440,000.
The equivalent number for OnTheMarket.com is just over 225,000.
If OnTheMarket.com grows its property stock by 120,000 and 90% of this comes at the expense of Zoopla, OnTheMarket.com will be bigger and the ‘tipping point’ will have been reached.
To achieve this, OnTheMarket.com needs to recruit 3000 more member offices – or an average of 250 offices per month.
In the 7 months from May (when our sales team began to come on stream) to December 2014, we averaged 290 contracted offices per month.
Our team is committed to reaching this next objective.
How you can help
This is a collaborative venture and we continue to need all member agents to:
- Advocate OnTheMarket.com to non-members;
- Help our sales teams locally;
- Continue and increase co-branding and local promotion;
- Maintain and help us maintain strict adherence to ‘one other portal’;
- If you are not already doing so – implement Earlybird for all your new properties.
We will be doing everything we can to support your business as we drive OnTheMarket.com forwards.
Loan Notes – first annual interest payment
As a Gold member, your firm or people associated with it subscribed for the Company’s Loan Notes during the last 12 months. I am pleased to advise you that the first interest payment on the Loan Notes will be paid to the subscribers’ nominated bank accounts on 6th March. For subscribers who are not limited companies, the interest will be paid net of tax unless you have advised us that you are eligible to receive interest gross and provide a certificate to that effect. If you believe you are eligible to receive gross interest, please contact us at [email protected] as soon as possible.
Thank you for your continued support.