While advertisers on rightmove.co.uk have been decreasing, the number of enquiries has been increasing thus providing those advertisers who continue to use rightmove.co.uk with more 20% more leads per month than the same time last year.
While most media and blog reports talk of rightmove losing 300 agents per month, they fail to pick up on other information in the Interim Management Statement, mainly that the number of enquiries generated have significantly increased.
As can be seen from the table below, the number of advertisers on rightmove.co.uk have decreased by around 9% over the last year or ~1,760. The main contributor to this decrease has been a 15% decline in the number of agencies - however this is to be expected in the tightening UK market and most portals would have experienced a decrease in advertisers. According to rightmove, the majority who have left have either gone out of business or were removed for non-payment.
This decrease in advertisers has been offset by an increase in lettings agents advertising on the site. Another move that is not surprising as people who can no longer afford to buy their own home (or get credit) still have to live somewhere.
During the same period, rightmove.co.uk reported that the number of page impressions delivered was up 4% (year on year) and that the number of enquiries delivered (the true measure of success) was tracking around 1m per month, of 10% up on the same period last year.
Therefore, as can be seen from the table below, the average number of leads per advertiser per month increased from 47 in October 2007 to 57 in October 2008 - a 21% improvement.
|Enquires / Advertiser||47.2||57.1||10||21%|
Why is this important? Well the reason anyone advertises any product is to generate leads (enquiries). Therefore the more leads that they generate per pound invested, the better off they are.
In today's property market, agents need one thing - lots of leads. They then have to create processes efficiently to manage these leads and convert them into sales. Sure it is taking longer than before, but then that is the same for every agent in the market. Those that want to survive this economic down turn wont be the ones who save a few pounds by not advertising on the likes of rightmove.co.uk, but will be the ones the maximise the return from every lead they generate from cheap sources such as rightmove.
On a final note, what was interesting is that during the same period, rightmove also mentioned that the ARPA (average revenue per advertiser) increased from all advertiser segments meaning that the impact on revenues would be significantly less than the 9% decline in advertisers would suggest. This coupled with GBP5m in cost reductions means that rightmove is likely to maintain strong EBITDA margins (and therefore cash flow).