Which portals are the ones to watch in 2016? Simon Baker reveals his picks…
Property Portal Watch’s 2016 Madrid conference founder Simon Baker, the former REA Group CEO, has revealed his top 10 picks for global property portals to watch over the next 12 months.
Baker, a serial investor of 16 years in the industry, says there are currently 8000 to 10,000 property portals around the world and the industry is an ecosystem that keeps growing, fragmenting and providing a fertile ground for new companies to emerge and thrive.
He also predicts new business models will move into the pay-per-lead commission stream.
Ahead of the Madrid event, here Baker explains why these are the top 10 portals to watch in the next 12 months.
1. Rightmove (UK)
Baker says the leading UK portal Rightmove is a business to watch. It’s a simple, pay-to-list, low cost operation with a clear model which doesn’t get distracted but stays focused on delivering good value for its audience.
Baker says leading Australian property portal realestate.com.au has a good story around extracting value from the advertiser. It has grown from an ‘all you can eat’ model to offering a number of paid services, even though the number of agents hasn’t changed in Australia.
“Realestate.com.au knows how to create competitive tension,” Baker said. “By educating the market about the value of a premium product, it has created a market where everyone wants one.”
He said it is also a unique, vendor-paid advertising model.
“The 10,000 agents in Australia are a sales force for REA Group,” he said. “They advise vendors to buy premium product to put a property at the the top of a page. Realestate.com.au.
“Do premium listings get more clicks than normal listings? Probably not. If you want a house you look through all listings whether big or small. Realestate.com.au has exploited the use of premium products and grown exponentially.”
In the US all listings are available everywhere, unlike in the UK where Rightmove has pulled together all listings in the market and they’re not accessible elsewhere. US portals therefore have to differentiate themselves in other ways. Trulia has done this by excelling in consumer interaction, says Baker.
“It uses a variety of products and tools such as heat maps and related tools to add value to the listings,” he said.
The VivaReal portal is based in Brazil, a huge country with a population of 200 million. It is a late entry to the market which has utilised SEO exceptionally well to grow.
“VivaReal executed its model step by step, rolling it out carefully by starting with the top end agents then converting,” said Baker. “The quality team at VivaReal has a clear business model, an organsied approach and they measure performance.”
Based in the emerging market of Pakistan, Zameen has a data-driven approach which uses performance management dashboards to ensure their team of 500 sales people are following up each lead.
6. Mitula Group
With 65 million visits a month, Mitula is an example of a highly successful model in which 68 percent of traffic is driven by SEO with a long tail.
Baker says Immobiliare, an Italy-based portal, has a powerful story about attacking a market leader and winning.
“When Immobiliare entered the market, the then leader was REA Group subsidiary Casa,” he said. “Immobiliare’s CEO, driven by the desire to win, went about understanding his competitor and through gaining a deep knowledge and strong execution gained market leadership over three to four years.”
8 and 9. EasyProperty and Purplebricks
Simon Baker says these EasyProperty and Purplebricks may not be winners in the market, but he believes their business models are the way of the future. Purplebricks has just made a splash into the Australian market.
“They work on the premise of streamlining a self-service model rather than paying agent commissions,” he said.
“The younger generation don’t want to pay a 2 percent commission when they could sell their own house. They feel comfortable buying products online, even making movies, so they feel just as comfortable buying or selling property.
“This kind of model where you pay a Purplebricks to market and help you out with compliance while the user does the rest will work and it’s the future.”
10. Square Yards and Real Estate Investar
“These portals are making use of vast, rich databases which gather detailed information about customers and mass marketing the information, then selling the information to advertisers and delivering them with much greater value because it’s a targeted approach to a sale,” he said.
“For example, Real Estate Investar knows all about their property investor subscribers from where they are in the investment cycle to what kinds of market they might be in. This type of information is of huge value to agents and developers.
“Building data on the audience hasn’t been well done until now. We know a lot about the agents, which are one side of the equation, but not the other side. It’s a returning audience.
“The portal of the future will be a data collecting device. It understands the behaviour of specific buyers in great detail and will be able to work with advertisers to target buyers more effectively for better lead conversion.”