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TODAY'S OTHER NEWS

OnTheMarket blasts Rightmove with aggressive email to agents

OnTheMarket has stepped up its attack on Rightmove with a stridently-worded email to agents explaining how a drop in leads from the number one portal is down at last partly to OTM’s efforts. 

It also says that OnTheMarket’s fees are, on average, about 25 per cent of those of Rightmove, while OTM’s New & Exclusive feature allows agents to “reduce your reliance on other portals.”

Separately, City investment consultancy Zeus - which advises OnTheMarket - says the portal is expecting to have 17,200 agent branches listing in three years’ time.

Projections suggest that if OTM can convert those agents who joined at a discount in the past two years into market-level fee-paying customers it will earn £388 a month on average from each agent by 2021.

This would add up to £64m revenue and profit after tax of £27.4m for the challenger portal.

Here’s the email attack on Rightmove:

Last Friday’s reporting of 2018 results shows another year in which Rightmove has generated increases in revenue, profits and profit margin primarily by hiking its Average Revenue per Advertiser by a further £83 to break through the £1,000 per month barrier for the first time.

The majority of Rightmove’s revenue – over 75% – comes from the fees which agents pay.

It has again – for the third year in a row – generated fewer leads for its property advertiser customers, down from 210 leads per advertiser per month in 2015 to 171 leads per advertiser per month in 2018 – a fall of 19%.* 

This means that every £100 spent by Rightmove’s property advertiser customers generated an average of 17 leads. This is a reduction of 39% compared with 2015, when every £100 generated an average of 28 leads.

Rightmove also reported a further 10% year-on-year decline in leads in January 2019, which it attributes to “the fall in property transactions as a result of a slightly cooler housing market”.

Although NAEA Propertymark is reporting an overall downturn in buyer enquiries in January, we believe that the fall in Rightmove’s lead generation may also result from the substantial growth in leads delivered by OnTheMarket.

OnTheMarket has increased its lead generation seven times since its Admission to AIM in February 2018. Our direction of travel is clear. With 12,500 agent offices now listing at OnTheMarket, we have delivered on building our agent network, quadrupling consumer traffic to 23.5 million visits in January and importantly, we have increased our lead generation by seven times. 

This is classic network effect building. More people, looking at more properties, which produces greater value for our agents. With agent backing we remain focused on delivering a genuine alternative to the market leader.

It is no surprise that the number of agents listing with Rightmove has started to decline for the first time: down 298 offices year-on-year, with the greatest reduction - 257 offices - in the second half of 2018.

We have already disrupted the duopoly of Rightmove and Zoopla and believe we are reaching a crunch point for agents. We believe there is a strong will among independent agents for OnTheMarket to succeed in delivering an alternative market-leading, agent-backed portal with sustainably fair pricing for their core listings. 

Our pricing undercuts Rightmove – with fees typically one quarter of Rightmove’s - to provide agents with sustainably fair pricing for core listings, while agents remain at the heart of the property transaction on the ground as well as being majority shareholders in the business.

  • edward apostolides

    It does seem that more and more agents have had enough of rightmove and their egocentric arrogant greedy policy of fleecing agents with ever increasing fees for ever decreasing returns. On the market may have adopted some initially daft ideas but their original intention of breaking the rightmove monopoly may yet come to fruition.

  • Paul Barrett

    There is surely space for at least 4 big players in the online listing market.
    If I was an aspirant home buyer or tenant having to trawl through 4 different sites to capture the majority of availability would be no big issue.
    RM deserves to have OTM snapping at it's heels.
    It never pays to get too big for your boots as OTM is proving with RM.
    Certainly I now have relevant market awareness of the big 3 now.
    OTM have achieved this awareness very quickly from when they first started.
    It should enable OTM agents to offer lower prices to customers now that listing fees are lower than the RM behemoth! !
    RM will have to adjust it's business model if it intends to keep the upstart OTM in their place.
    It appears for many agents the OTM offer is an increasingly compelling offer.
    So well done to OTM.
    RM is going to have to respond or find that OTM becomes the largest Web portal!!
    There can be no space for complacency in this online market.
    RM will need to wakeup it it wishes to stay No 1.
    With the likes of OTM snapping at their heels this is no longer a given!!
    The RM offer will have to change and that means it will have to become cheaper!!!

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    I agree RM success is really down to first mover advantage and a systematic increase in their fees. They don't offer anything new for the acquiring party or the listing agent other than the fact they have a monopoly on portal listings. This monopoly is diminishing as companies like Zoopla and On The Market are far more innovative.

     
  • icon

    Its their for the taking. OTM just needs to up its exposure-I would be more than happy to dilute my shareholding for some extra investment now as long term it will pay of. Any one know when the financials of the recent court case will be known??

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