OTM boss says the industry needs to come up with more ways to the trend of increasing portal fees.
At this year's Relocation Agent Network Conference, OnTheMarket (OTM) CEO, Ian Springett, stated that there needs to be a change in the portals market to counter the trend of increasing portal fees.
Springett brought OnTheMarket's H1 figures to show the conference hall that the portal provided 28 leads for every £100 of monthly fees.On the other side of the spectrum, rival portal Rightmove generated 16 leads for the same amount of fees across the same time period.*
OnTheMarket currently claims that it sends over 100 million instant property notifications per month to around 1.2 million people, while Rightmove sent 781 million notifications to more than 2 million people across the entirety of 2018.**
"According to its own figures, Rightmove lost around 800 branches between June 2018 and June 2019**. OnTheMarket has continued to gain offices, with over 12,600 reported as at 30 September 2019. Furthermore, independent data from Home.co.uk indicates that in October 2019, compared with October 2018, the number of agent offices listing either exclusively at OnTheMarket or with OnTheMarket and only one other major portal had increased by 731 to 5,543.
"Agents are the providers of both the core content and the revenue on which portals depend, so agents can shift pricing power away from Rightmove and Zoopla by supporting the agent-backed portal. OnTheMarket is 70% owned by more than 3,000 independent agents operating over 6,000 offices and new agents committing to long term listing agreements can receive shares alongside. OnTheMarket aims to continue expanding its agent ownership group.
“It's clear that serious property-seekers find the properties, wherever they are listed. Many agents have told us that leaving Rightmove has made absolutely no difference to their business. Some have even said that their working day has become easier because they are no longer chasing unproductive leads.
"In the period from 2011 to 2018, Rightmove's fees more than doubled, rising by 125%. This represents a compound annual growth of 12.4%. We have heard that some agents are facing a 30% increase in Rightmove fees this year."
Springett added that the annual number of agents complaining about Rightmove's pricing and attitude and then complying would fail to change anything. He questioned how long it was possible for agents to meet Rightmove's demands and to continue supporting its 75%+ profit margins.
“The core ethos of OnTheMaket is to understand and support the role of the agent. That is why we froze our prices next year for our customers on full tariff contracts. Given the challenges facing agents right now and the uncertain outlook for 2020, we believe this is the right thing to do to support all those firms who have loyally backed us as we have developed and grown your portal. We have seen before that the best agents come out of such periods stronger and we want to help you do just that."
In order for OnTheMarket to continue its current trajectory to overcome Rightmove within the sector, Springett suggested that agents list their properties with no more than one other portal and released them to OnTheMarket some 48 hours ahead of releasing them elsewhere.
"Commit your support to OnTheMarket and keep the other two on a short leash so you can play them off against each other."
* Based on an ARPA for Rightmove of £1,077 and an ARPA of £331 for OnTheMarket.
** Rightmove data taken from their published regulatory statements and analyst communications. Approximations are used where appropriate.
Edited by V. Haviland
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