It was reported this week by Estate Agent Today that there is a new portal in town to take on the market leaders - propertyindex.com. Now a cursory review of the site shows that it has been around for a while although it was focusing on advertising international properties to the UK market. It seems that the busiess has now turned its sights onto advertising UK properties to the UK market.
Now, at last count, there has to be 15 or more portal sites serving the UK market. Off the top of my head i can think of rightmove.co.uk, propertyfinder.com, findaproperty.co.uk, primelocation.com, nestoria.co.uk, globrix.com, upmystreet.co.uk, zoomf.co.uk, hotproperty.co.uk, zoopla.co.uk, and dothomes.co.uk.
Now the UK is the MOST competitive portal market in the world. Therefore what makes propertyindex.com different from the rest and will it really take on the market leaders?
In the Estate Agent Today article, the Managing Director Lee Bramzil is quoted as saying "We are different from the other UK websites because we charge purely by results. We’re not just taking on Rightmove but all the portals with monthly subscription models. We charge £1 per lead. Portals that charge monthly subscriptions are far more expensive than that when calculated in terms of leads, particularly now the market is so poor and there are so few buyers. We aim to be smarter and faster and, if you like, share the agents’ pain. We’re also different from Globrix in that we deliver leads, rather than just traffic.”
What is interesting is that they are adopting a lead generation model in which the agents pay per quaified lead they recieve. Now this is a tough model to make work. In the early part of this decade, there were many lead generation sites in the US (e.g. homegain.com, housevalue.com, reply.com to name three) and nearly all have disappeared from the landscape with the lead generation model largely discreditied in the market.
The challenge is that for lead generation companies it becomes a game of maths with how much does it cost to generate a qualified lead and they need to ensure that it costs less than they charge for the lead. Now to generate clicks to the propertyindex.co.uk site, the company needs to undertake a series of marketing initiatives including SEO (which is almost free), SEM (so they pay per click) and also SMO (social media optimisation) and perhaps general brand advertising.
Now the challenge is then how many clicks to the site does it take to generate a qualified lead. If the combined costs of these marketing efforts plus the other business costs divided by the number of leads genrated is more than they charge for a lead, they will just go backwards.
In the US, housevalues.com is a great example of this. They spend up big on TV advertising to generate awareness and therefore find it difficult to make a profit on each lead generated.
Now in the UK, where there are so many portal sites vying for eyeballs (i.e. clicks to their sites), it is likely to be tough for propertyindex.com to secure enough volume of clicks at a low enough cost / click to build a meaningful business and therefore it will be difficult to truly challenge the likes of rightmove.co.uk, propertyfinder.com and findaproperty.co.uk.