It has come to light that Purplebricks has spent £26.7 million on marketing within the last year, meaning that the British hybrid real estate platform has spent £382 per instruction.
The figures, revealed in the agency’s 2019 annual report, represent the firm’s marketing spend in the UK alone and does not include its activities in Canada, where it continues to trade, or in Australia or the US, where it has shut its doors.
The overall marketing spend in the UK in the most recent financial year (£26.7 million) represents a 24.8 percent rise over the previous 12 months; the cost per instruction for 2019 (£382) is £50 more than the £332 reported in 2018.
According to a statement in the annual report from chief financial officer James Davies this surge in marketing costs “reflected an unsustainable level of marketing spend from several online competitors along with substantial reductions in commission from traditional firms necessitating a higher than normal level of communication of our value proposition in a shrinking market.”
He says overall marketing costs are expected to fall over the course of the full year 2020.
Elsewhere in the report, in a description of the Purplebricks business model, the company says: “Marketing has always been a central element of the Purplebricks strategy. We are committed to creating marketing programmes that engage with consumers to want to book a free valuation from Purplebricks and ensure that our messaging is clear and transparent. We work hard to develop and grow our brand and have made good progress, with our UK prompted brand awareness at 96 percent.”
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