The Hamburg-based Berenberg Bank is the latest to send a briefing to investors on the so-called portal wars - and while it says OnTheMarket has successfully disrupted the portal sector it will ultimately be merely a “blip in the growth trajectory” of Rightmove and Zoopla.
The bank says OTM traffic has now reverted to pre-October levels and that the challenger portal’s update on usage last week - when it described October’s visitor numbers as constituting “a record month” - was down to having ‘bought’ traffic.
“We believe that the recent spike in site traffic (to 900,000 visits per week) was the result of incremental Google spend, rather than an underlying increase in consumer traction. In fact, it is clear from more recent Hitwise data that since OTM turned off its Google spend at the end of October the traffic levels have reduced significantly, back to the pre-October levels of 500,000 visits per week” says the bank briefing.
It goes on to say the it does not believe OnTheMarket offers a sufficiently differentiated product to succeed in the long term.
“In the first three weeks of November, Zoopla has averaged 15 times the number of visits to OTM (at circa 8.2m visits per week versus OTM’s 500,000) whereas the costs to advertisers per month are similar. While emotions may keep agents paying in the near term, we believe that in the medium term this will prove too inefficient, and agents will return to Zoopla as it provides a substantially improved value proposition” says the bank.
Since the OTM update based on its October figures another bank - Credit Suisse - told its investment clients that the new portal’s “growth in contractual membership has all but dried up.” By contrast yet another institution, BNP Paribas, has described OTM as displaying “a healthy resilience” across its membership base.