According to an article in The Australian Financial Review, the extremely high cost of online Google advertising is making it difficult for real estate disruptors to actually turn a profit.
Grant Thornton, the auditor of ASX-listed BuyMyplace (BMP), featured the platform’s uncertain financial position after its 2.8 million loss for the six months to December 2017.
Its December half-year results, show BMP spent $870,000 on advertising and marketing, a 68 percent increase on the prior period, and over half of its total revenue for the period of $1.5 million.
In its independent auditors review report, Grant Thornton noted the company’s latest net loss, up from $1.7 million in the prior period, indicated that “a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern”.
BMP, founded in 2007 and listed in 2016, assists homeowners to sell their property without an estate agent for as little as $700. Having sold more than 5,000 properties with average savings of $20,500, BMP is one of the several companies which have seized a small but expanding market niche as vendors look for ways to reduce the cost of selling their homes.
As with all other disruptors including British giant Purplebricks, BMP has had to invest heavily in Google Ads and Google Keywords to promote its services to consumers, but recently this has not been the best means of advertising due to the cost increase.
This article was sourced from The Australian Financial Review. Read more here.
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