OnThe Market is at the “beginning of the end”, City analysts were told yesterday at a briefing after Zoopla posted its results.
But the claim, that OnTheMarket is a ‘failed exeriment’, was robustly denied last night by the challenger portal’s operator, Agents’ Mutual.
It said that Zoopla’s agent numbers are now 13,373, or 22% down from the 16,373 branches that were listing on Zoopla in September 2014, before OTM launched in January 2015.
Agents’ Mutual chief executive Ian Springett said that while it suited Zoopla to claim that OTM is a failed experiment, in fact there were “inconvenient truths” standing in the way of the claims.
The riposte comes after a briefing yesterday morning for analysts in which Zoopla founder Alex Chesterman said that win-backs from OnTheMarket were accelerating.
He also claimed that OTM inventory and membership had both gone into reverse, and that OTM traffic was “tepid” despite a significant marketing spend.
Analyst William Packer of Exane BNP Paribas, who was at the meeting and reported Chesterman’s claims, said that Exane was more optimistic about the prospects for OTM, which he described as “more resilient with continued membership growth over 2016 despite sceptical investor sentiment”.
The analysts’ meeting was also told that Zoopla recognised Brexit headwinds for transaction volumes next year, but argued that marketing spend was critical for agents with plenty of reallocation from print to come.
Zoopla also said that the industry was safer as it was more exposed to lettings than during the financial crisis.
Yesterday, on the back of results showing record revenues and profits, Zoopla shares rose strongly in early trading to hit 349p, but finished the day at 334.90p, still almost 5% higher. In its posted results, it reported a return of 600 agents back from OTM.
Last night Springett told EYE: “While it clearly suits Zoopla Property Group to position OnTheMarket as a ‘failed experiment’, this only serves to underline again some inconvenient truths for Zoopla.
“It is a fact that the number of UK agents listing on the Zoopla platform remains 22% down compared to the period prior to the launch of OnTheMarket.com.
“It was inevitable that after losing the properties and the listing revenue from thousands of agents who joined OnTheMarket.com, Zoopla would respond with what Alex Chesterman [now] refers to as ‘the Group’s pragmatic approach to pricing during the period in an attempt to retrieve some of that inventory and income.
“Our direction of travel remains clear.
“While Zoopla Property Group claims to have increased the number of UK agents listing on its portals by 5% year-on-year, meanwhile the number of offices listing at OnTheMarket.com at the end of October 2016 had increased by 15% year-on-year.
“The consumer appeal of the service is clear from record-breaking traffic in September of more than 10m visits, an increase of 79% year-on-year.
“These are not the achievements of a ‘failed experiment’.
“It was almost two years ago that Alex Chesterman branded OnTheMarket.com ‘a short-term event’. ZPG’s somewhat sensationalist suggestion yesterday that this is ‘the beginning of the end for OnTheMarket.com’ is similarly lacking in substance and credibility.
“If OnTheMarket.com were not already an established competitor and posed no threat to the incumbents, ZPG would not be flattering us with so much attention.
“Alex Chesterman’s assertion is a reflection of how high the stakes are in the property portals sector, both for the portals and for the agents who feed them, and it is a strong indication of the impact OnTheMarket.com has already had.
“For the record, OnTheMarket.com is at an early stage of a long-term strategic journey to create a genuine alternative market-leading portal for agents and consumers alike.”
He added: “ZPG under-estimates the acumen, determination and support of the overwhelming majority of agents listing their properties at OnTheMarket.com to achieve its long-term goals.
Zoopla, which also owns the Primelocation and uSwitch businesses, yesterday reported group revenues of £198m, the latter up an astonishing 84% on the previous year, with pre-tax profits up 38%.
https://www.zpg.co.uk/~/media/Files/Z/Zoopla/documents/reports-and-presentation/zpg-fy16-results.pdf
Comments (37)
It’s all laughable.
People still moan about Rightmove, still moan about the one other portal rule.
I can assure you that if the one other portal rule was dropped there would still be plenty of agents that would not sign up to OTM as the other portal rule is a convenient excuse not to join.
You won’t get a general meeting, because the majority of agents on OTM, don’t want a general meeting. Once they do, they will make themselves heard.
Two years down the line and the majority of agents haven’t jumped ship because it hasn’t had a negative impacted on their business. Those that choose to claim OTM are the reason for poor performance or a drop in business are delusional.
If OTM fails, we won’t be going back to Zoopla.
Any drop in business can always be traced back to poor performance by individuals, be it negotiators, managers or owners.
When you walk out of a valuation and you’ve won the business, do you go back to the office saying to yourself, I’m glad I’m on Rightmove or Zoopla, because that obviously got me the business? I doubt it, I would think, as you rightly should, that it was you that won the business. Much the same that it is you that lost the business and it is you alone that can make the move.
This all reminds me of who moved my cheese, one day you will all turn up to work, and go looking for your cheese in the same safe place, only to find out it’s gone, then what are you going to do?
True survivors adapt, take risks and change course when needed. Every successful business / business person will have moments of failure, you can’t become great if you don’t make mistakes and feel the pain.
You can certainly stay middle of the road, but that’s not going to make you want to get up in the morning and it’s certainly going to leave you exposed when the wind changes on you.
My 2 p’s worth…………..
Paul – Congrats. That is one of the most rational, sensible and measured comments ever posted in the tortuously long saga of this subject.
Only in my humble opinion of course. I would lay money that not everyone will agree!
I think Paul, whilst making absolute sense in one sense is making no sense of the article.
Clear enough ?
Paul,
I think you have some very valid points, especially about lethargy on having meetings, blaming portals, and agents not joining still if the rules were changed. However lets not forget that OTM inspired many agents to join it in the first place, but now it has lost impetus and the message has got muddied. Questions are starting to be asked and need to be addressed soon.
I want to see a new revitalised dynamic OTM full of innovation and ideas inspiring many more agents to join, because they will benefit from it, and then proving they are the partner that will help agents build their businesses further. I just don’t see how that can be achieved without OTM changing. My suggestion for the first change would be to put together a representative panel of independent agents from all parts of the country, with the ideas and drive,….and then start listening to what they have to say.
There is no question that Rightmove are by far and away the market leaders, but thereby lies the danger. With no positive alternative, they will be able to charge what they want. What OTM has done, is set up a competitor that if Rightmove sought to push their luck too much on fees, there are enough subscribing Agents to make a mass withdrawal of properties from RM. and the house buying public would have to look there to complete their choice. It may never have to come to that, but as long as OTM have substantial support, it has a good chance of keeping RM price rises in check. Zoopla are just a copy of RM, if you have the latter why would you need the other, in their eyes, high fees all round would be the ideal. The only ‘insurance’ we have is the presence of a well supported OTM, with the one other Portal rule. However dominant Rightmove is, it is nothing without Agents properties and they are intelligent enough to know that.
but OTM is stalling…and we don’t want it to become insignificant or crash. It has to revitalise and change something.
What OTM has done, is set up a competitor and what have they offered that is different to the market ….. nothing. They are seen as just the same as RM & Z, so what is the point in joining them. There lies the dilemma for OTM. Get off your ar%%ses and show the industry you are different, otherwise you are nothing but another runner in 3rd place and is where you will always be. Time Springett & Co went, they have no new ideas?
But there are, I’m sure, plenty of ‘coalface’ independent agents out there who do have the ideas (myself included) to create a great USP for OTM. They need to engage and listen.
RM are also intelligent enough to know, most agents believe they ‘need’ RM. So where is the incentive for them to even worry about prices hikes? I’ve not seen any change in the last two years since OTM launched!
Also, there is a positive portal so to speak, Zoopla, as much of the public will confirm.
Every agent on RM could come off and move to OTM. But if no one has heard of them, they will not get site visits. It’s quite simple really. It’s the same for any business. How can you use a service if you don’t know a business exists?
OTM Need to make some drastic changes, and very soon, or they will go bankrupt in time and be forced to close.
What a shame, this was readying well until…. Your comment: “Any drop in business can always be traced back to poor performance by individuals, be it negotiators, managers or owners.”
I’m curious, how can you win someones business if they do not contact you in the first place??? Might I suggest it needs two to tango, so to speak. A portal is a key way, might I suggest, ‘the’ key way, of marketing to potential clients, them even knowing you even exist, and making contact with you. It is then your / your colleagues job, to win or loose there business.
Your are certainly correct in businesses needing to adapt and change. Clearly including in marketing, and technology, where people are go, such as the major portals.
One last point, on your comment “If OTM fails, we won’t be going back to Zoopla”. If we are being honest, in many ways they have already failed. No 2 by end of year one wasn’t it Mr Springett?, approaching year two now, and with numbers dropping due to poor service, few leads and extremely low pubic awareness. Perhaps all that money spent on overseas and commercial channels, for lets face it, ‘the big otm few’, would of been better spent on marketing for the majority. Agents Mutual, they are taking people for a ride on that one.
Just my 1p’s worth 🙂
And once again the side show of OTM and Z battles on without either side accepting that RM WON this data war when they cheekily chose to cut agents controlling overnight data feed on 4th July 2016, Independence Day!
RM now control sellers data via their own real time data feed and hot buyers data via their own instant alerts.
Prior to ‘FREE’ real time feeds RM could NOT promote either.
They now have more access to YOUR clients data and are already using this data to sell, for additional profit, via prospecting products.
I envisage that these prospecting products shall be snapped up, more so, by the likes of the Corporates and On line ‘diluters’ targeting you clients with SAVE £1000s.
Consequently, I have cancelled my RM membership and so should you on an area by area basis?
Very valid points. What we need is a system that puts more data control back into our own hands…especially hot buyers!!
If OTM fails it’s because they went about the whole thing backwards. They only needed agents, not traffic. They should have had a longer term view, maybe up to 5 years to achieve their goal and the way that they should have done it was to get agents to sign up on the understanding that when they reached a critical mass (say 75% of agents in the country) then their members would kill RM and Zoopla by turning them off overnight. “January 1st 2020, the big switch off is coming” or whatever. Then the traffic would come, as there would be nowhere else for it to go, and the media would be all over such a big event, providing masses of free marketing.
If OTM fails, and if there is enough interest then my company (heavily involved in the industry) will happily build a portal on the following terms:
One agent one share, one vote.
Non-profit (once costs covered then money is either returned pro rata to subscribers or reinvested – such decisions to be made by members).
No dividends to shareholders.
Priced per listing per day, same for all agents – no discrimination by agent type or size.
Pricing for each coming year to be decided by members, taking into account any goals they want to achieve (new functionality etc.).
Members agree to cut off Rightmove and Zoopla but only when the portals target penetration has been reached.
A level playing field – no paid upgrade options.
Anyone have any thoughts on the above?
I would seriously like to talk to you about another major project before all this comes about…how can we contact you?
– Let’s do a niche! (DSS Move, Lets with Pets)
– Let’s start a union (OTM)
– Let’s build free software, then spin out a portal when everyone’s on it! (Someone in the US tried this, I forget the name because it didn’t work)
The fact is that Zoopla and Rightmove have this sewn up. So much money spent on building brand awareness, brand trust, split testing every possible combination of web page, marketing email and press release. There is just no way an upstart portal could usurp them. Gartner recon the cost to entry for a new portal in the UK is £20M, back in 2010. AND they would need a USP.
Zoopla are bringing property management software into their offering, which is a really smart move to address ‘being number two’. They also have better data and API’s.
Please don’t waste good money trying to topple a duopoly with any of the three ideas listed above.
AnonymousCoward79
What agents need to do, first and foremost, is to protect YOUR clients from RM;s prospecting products.
See my posting further down.
Real time data is the most important data any estate agent has and we just gave it to RM for ‘FREE’!
When was the last time RM did anything for ‘FREE’, unless they desperately needed agents to oblige them?
If you would like to discuss, respond to this post and I shall arrange it via this thread.
Oh dear, oh dear, Mr Springett seriously dares to keep quoting figures from many months ago – 2yrs 4 months ago to be precise! I smell desperation. What about the recent historical figures? Move on and get a reality check. The whole industry knows OTM are really struggling.
If it’s going okay, then perhaps a trend chart showing number of agent members, site visitors and leads? He doesn’t have to supply numbers, just a line graph showing there trend. Something to support what he is implying? No, ah, that will be because as everyone knows it is not positive.
He has been found sleeping in his laid back strategy, and Zoopla here and now figures are clearing nothing but positive. RIP OTM I suggest if he is not careful.
I do feel quite despondent reading everyone’s posts. I started my own business nearly four years ago and I get people saying “I didn’t know you were there”. ! Now however we are flying and making real inroads. All businesses take time and the public are a fickle lot – as we all know.
Since delaying my feeds I am starting to get solid (I agree not enough) but solid leads from OTM and am getting properties under offer before they even hit Rightmove.
Everyone is so impatient. I know all the portals are expensive but I would still rather put my money there than anywhere else.
I do agree with other people that February is probably the make or break for OTM but we all got behind in have a bit of staying power.
Rant over. Wishing everyone a Happy Christmas 🙂
Prediction:
OTM gets dented in Feb
Zoopla’s portal side sells in 18 months
And rightmove still win ha
I have a feeling OTM is getting dented weekly anyway.
Zoopla won’t sell the portal side, that would not make business sense at all. Not sure how you came to that conclusion Trev.
Prediction:
OTM gets dented in Feb
Zoopla’s portal sude sells in 18 months
And rightmove win….well done guys
It’s a very great shame the extra enquiries OTM report are not materialising in our offices, especially when we are faced this week with an EXTORTIONATE DEMAND from Rightmove for a 15% year on year increase. (I don’t think inflation has even reached 1.5%) How can they justify this? When is the industry ever going to rebel against these giants emptying our coffers?
I so desperately want OTM to work to protect us from RM and SPG. It only requires the government to step in with rafts of change to the whole process and perhaps then the PUBLIC, ZPG and RM might not need us at all in the equation. Enter The On Line Only Agent !!!
As a non advertiser with OTM let me explain…..
Agent V is in my opinion correct.
I wont risk my clients property on a untried portal. The only way I will trial it is if I can have my “Cake and Eat it” approach which is not being restricted to two portal rule.
And there you have it.
I am sure I am not alone thinking like this either
But we all risk our business by being on a portal with purplebricks….. the irony is shocking.
For the record though i agree otm was a great idea…its just the bit about actually doing what they set out to do iam not convinced about..i.e. taking down Rightmove.
Check PB share price still falling.
Whilst their business model may have some mileage it is still a restrictive business for many house sellers otherwise others before PB would have taken a bigger market share already.
I suspect that OTM will want to get the impending court case out of the way in February before they decide their ongoing strategy. IF they win it will be full steam ahead. IF they lose…
Full steam ahead? The court case appears to be lose/lose whatever the outcome for OTM. If OTM win the court case they have disgruntled agents tied to them for another 3 years. It does not send out a good impression to those fence sitters does it. I doubt anyone has signed to a 5 year contract for a very long time and I would be amazed if anyone did so again. Why would they when they have seen so many late comers treated so much better with much shorter contracts and massively discounted fees. If OTM lose on the other hand………… As I say it looks like a lose/lose scenario to me.
I have a suggestion for OTM now to really drive forwards membership and make it a true equal competitor for the other portals.
Drop the one other portal rule and look at a pricing structure for new joiners based on the average number of available marketed properties. Say £50 a month for less than ten for instance, rising by £50 for every additional 5 upto the standard membership fee. Review the fee quarterly. Maybe consider doing the same for existing members.
Make it an absolute no brainier for people to join. More agent members means more properties, which means more visitors and traffic leading to greater number of leads generated for existing members.
Agents will then naturally consolidate the number of portals they are unsing when there is more parity between the traffic levels.
This is the first suggestion of five for OTM and I know it will be very controversial…..but I still believe they need to now think again and adapt to move significantly forwards.
Suggestions arent what this is about AgentV, I think “one member one vote” but we arent voting on anything proved that
On their website Agents Mutual claim they are 100% owned and 100% controlled by member agents. So why not group together and call an ‘Extraordinary General Meeting’. Demand a panel of representatives, from ordinary agents, be set up to raise issues upon which members can then vote.
Surely this can be done? If someone out there knows reasons why it can’t….then please comment….and then tell us what can be done.
I don’t think you will find Danny calling such a meeting AgentV. I think he’d have to be an OTM member to do that.
Haha… 100% controlled by member agents !! Thats quite funny…. just to be clear you want to have an EGM to ask the board that consists of high end London agents why it appears that most of the marketing spend is aimed at high end London agents…. the very best of luck with that Agent V . They had a token Northerner a while ago but he kept turning up and complaining apparently , they soon got rid of him
Did Ian really just comment on Zoopla’s “pragmatic approach to pricing during the period”?
Pot.Kettle.Black!
As always , Rightmove get away with it again..while the 2 minnows fight it out, RIGHTMOVE put their fee’s up…!!
Iam not sure who is more useless Sprigett’s putin type denial of problems or agents who just sitting there letting rightmove get away with it..
either way the net loss is all our profit…
I suppose OTM was a bit like brexit…52% voted for it thinking they would be better off and didn’t want to go against their mates in the meetings.
Then once it happened everyone decided that they didn’t have the stomach for it really.