PropTech Today: Is there any such thing as a portal war?

For a mixture of reasons, I now only write this column every two weeks. At first, I missed the weekly consideration for commentary pieces I was asked to provide. Now, I rather enjoy watching the news to consider what I should comment on.

My process is usually the same. During my two weeks, I am forever pinning interesting articles, on which I know I could pass comment, to a Pinterest board. I then reflect on each article at 6am on a Tuesday morning with a pot of coffee, and decide what I will actually come up with.

Yesterday morning, there seemed to be a wealth of stories around the phrase ‘portal war’ and hence I felt I needed to wade into the debate somewhat.

I have to confess, there is a far deeper analysis, both qualitatively and quantitatively, to be had that would present this commentary somewhat differently. However, there just simply isn’t the time to gather all necessary information together to really dive into it - it would make an excellent piece of investigative journalism or PhD thesis in my view.

Therefore, this piece is more qualitative in nature and based on opinion and not fact. It’s based on gut instinct and nothing more. It should at least begin the framing of something wider to discuss.

Let's put it bluntly, this is no portal war. This is about agents being unhappy they are no longer in control. This is about agents being unhappy they have ceded control to people who are not like them.

Portals are not run by property people. This is about agents being unhappy because the people that are now in control don’t have their interests at heart.

It is that simple.

It is not a war between portals but a war between the portals and the industry at a point when both are simply treading water, knowing they both need to change but not quite ready to swim to shore.

I am far less UK residential-focused nowadays, given my role with Unissu, but I can assure you, you are not alone. All agents around the world have this love/hate relationship with portals (and new agency models, it has to be said).

The portals have created an almost dealer/addict like dependency relationship that is not healthy for either side.

Agents need the portals and agents, to quote David Thomas in Christopher Watkin's recent 'portal wars' interview ‘are lazy’. In the same vein, portals need agents and portals have also become lazy.

This is obviously a terrible situation. It stifles any form of progress and it creates this market dynamic. Portals increase prices. Agents have to pay to get their fix.

Portals don’t need to innovate as they satisfy both sides of the market just the way they do things. No need to improve, so they concentrate on delivering to a standard of expectation and not excellence.

Agents have let this happen in reality. They have sleep walked into dependency.

It was a solid ‘interview’ from Chris, but it does feel that this is less ‘portal war’ and more about everybody gunning for Rightmove. I might suggest Zoopla and, perhaps OnTheMarket are just happy to let this all continue for a while.

But let’s consider elements of what a portal needs to succeed. In basic terms, as you could spend time going into a much deeper form of business terminology here (which I will avoid this time):

• Properties supplied by agents
• General public looking at said properties
• A brand

There you go. Simple, non-business speak for how simple a portal is to actually create. With time, you can back this with proper MBA speak and quantifiable figures but that is really that.

Now let’s look at a rather controlled statement from David in the interview mentioned above: “It works for what the consumer needs to search but does it work for us? The money that we pay. The reality is, it could do so much more which is where all these challenger portals are coming in.”

In that one sentence is the reason you are all having these issues. It does work for the general public. It isn’t complicated. Rightmove and other ‘traditional portals’ are classically Ronseal. They do exactly what they say on the tin. It has supplied the general public with things they want to look at. They supplied agents with the one thing they needed. Leads.

Oh, and they have a brand.

They have spent years and years building a brand. Originally it was easy. There was little competition. They built a considerable following. The drug was cheap for the agents. The original drug of the half page in the local magazine was no longer providing the fix they needed. This was the exciting new drug that had hit the streets.

For customers, local papers were less and less influential and the internet was where it was at for the start of the property finding journey.

The high was exceptional, on both sides, and they just kept coming back for more.

Now portals are spending more and more money to defend that position and they know they don’t really need to innovate. They have a defensible position against very little credible threat.

Zoopla are quiet. They are playing their cards close to their chest. Just doing enough positive PR to keep themselves there and present in people’s minds, but also, perhaps importantly, the agents.

OTM has appointed a new CEO. I like Jason, I worked with him at Foxtons and have followed his career closely. On the face of it, building those three core elements of a successful portal are perfect for him, but it is far more complex than that sadly.

It really isn’t as simple as buy side, sell side, brand.

Why you would appoint an ex-agent to run a portal, I just don’t know. These are digital marketplaces. They are not, in reality, estate agent businesses. They need knowledge of digital, not property.

Sadly, this is an appointment to show support for agents, to show them that one of them is at the helm, not to progress OTM as a viable competitor to the others.

Moving on somewhat. Another theme just recently on my Pinterest board of articles, I find a plethora of articles pinned around the Bruce brothers.  Their continual PR machine in operation, updating us of what they are up to.

Again, I have followed their narrative for a while, knowing, not one of their previous stories have really been the end game.

The announcement of an Agent Mentor programme was an interesting move. I couldn’t quite get my head around it at the time. It seemed almost antagonistic to some, but perhaps the gameplan is now becoming clearer based on my simplistic overview expressed earlier.

Charm one side of the market to change the perception of their past when they were an aggressive competitor almost universally hated by the industry (a theme I see around the world from Purplebricks copycats in other domestic markets).

Then, the likelihood will be to spend money acquiring the customers that traditional portals attract. Essentially working and investing in the other side of the market - and it will be a significant sum for a long period of time so the assertion that they will self-fund will likely be shortlived - and all the while, building a brand.

The latter being the most difficult and time-consuming part of this whole process as it needs both sides of the market to see equal value and it needs to be sustained.

Ultimately, 60% of the workforce being ‘tech’-focused will help, if initial suggestions are true and will mean a more balanced approach to the build, perhaps parking a tank more firmly on the lawn of the Homesearch and Openbrix efforts rather than Rightmove, Zoopla or OTM, I may suggest.

There has been a lot of noise in the last 14 days about portals but let’s be clear, there is no portal war. That battle has been won a long long time ago by the big two.

This is more about the portal evolution. Expect to hear a lot more about Boomin and Homesearch and Openbrix (as they will likely ride and benefit from the coat tails of significant PR - and likely fundraises - from the Bruce brothers in due course).

The market knows Rightmove is outdated. It knows the horizontal play by Zoopla to diversify from a vertical classified play, is and was a decent one. It knows OTM may possibly not be ideally equipped, though with an admirable mission.

The market also knows how much money is there to be made but it will know it will take time to build.

The key will be restoring trust from the industry that supports it (or understanding how to support an industry that is trying to understand its own future) while raising its presence and not just satisfying end customer need, but delighting them.

This evolution will not be gone any time soon. It will play out for years to come.

*James Dearsley is a leading PropTech influencer and commentator, and is co-founder of PropTech platform Unissu. You can follow James on Twitter here.