It's true that I have written a few articles expressing my belief that the one other portal rule would divide the industry, strengthen Rightmove, discourage proper competition, attract unwanted attention from the regulators and negative sentiment in the press.
And yes, I do like Zoopla and I think its ironic and unfair to have picked on it when it was a better white knight to the industry than OTM will ever be.
However, it is wrong to say I am a detractor per se, because take away the one other portal rule and I think an industry-owned portal is a good idea.
If the one other portal rule remains, though, it is my view – which I think the facts are now supporting – that OTM can't succeed. It's a bit like trying to fire a rocket into space while at the same time ignoring the laws of physics, it just can't be done.
In order to reach space a rocket needs the initial 'big bang' of its main engines but it has to jettison them in order to reach escape velocity. Applied to OTM and being pragmatic about it, the one other portal rule may have been necessary to get the new portal off the ground but it's force is now spent and leaving it in place can only hold the business back.
Worse still, publicly relying on flimsy letters of intent is a strategy which to many seems like a Freudian admission of failure.
Let's look at some facts. OTM launched with 4800 offices. Nearly a year in it still has only 5400 offices signed up – a paltry 17% gain, despite what must go down as one of the biggest niche market start-up spends in history.
It has boasted about spending £12 million this year and plans to spend the same again next year. Do agents realise this is their money that is being thrown away on what can only be described as one of the most ineffective marketing campaigns ever?
If they had spent this money themselves on promoting their own websites via Google, their return would be far greater.
To put this in context, £12 million is the same or more than Rightmove will spend this year. At an average spend of £1 million per month and 100 million visits per month, Rightmove's cost per visit is 1p.
OTM's cost per visit is a staggering 20p. That is 20p of agents' own money to get each and every person to visit the OTM website.
This may possibly be the most expensive visit acquisition cost of any free consumer website in the UK! Do OTM agents really think this is a good use of their money and do they really intend to do the same next year?
Rightmove's monthly fees average about £750 per month and it gets around 100 million visits per month. ZPG and OTM fees are both around £350 per month. ZPG gets 50 million visits per month and OTM gets around 5 million, based on figures released by the portal last week. So in terms of exposure an agent can pay about £7.50 per million eyeballs to each of Rightmove or ZPG, or £50 per million to OTM.
Much more worrying is that the latest figures (see above) show OTM is failing to engage its audience and that a very significant percentage of traffic has come from pay per click and that most of these visitors do not return.
So, as illustrated, when OTM recently stopped its pay per click advertising visitors to the site plummeted immediately.
The problem is compounded because the more people who visit OTM on a PPC basis, the more people are put off returning because the site is below par from a user experience point of view.
So, ironically, the more OTM spends the worse things get in the long run.
What will OTM do next? Will it drop the one other portal rule, add the right functionality to its site and offer members value for money?
Or will it continue to thrash around looking for ways of enticing new members while sticking to its guns?
Well I don't know for sure, but I can speculate. Based on its track record so far I think it will resort to desperate measures.
By this I mean dropping fees either to nothing or pretty close to it and focus on the agents who have left Zoopla to rely entirely on Rightmove.
If it pursues a strategy like this it will come with a price in terms of the backlash from the existing membership, some of whom will see such tactics as a betrayal.
Of course I could be wrong, but we shall see.
*Simon Shinerock is Chairman of Choices Estate Agents. For more information on Simon, see his blog or his LinkedIn profile.
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One year ago OTM was a new start up venture that some agents, myself included, invested in. I felt it was worth a punt at the time but have been very disappointed with this investment so far. The promise was a new business that would be better than the competition, attract a wide audience of people searching for a new home and deliver better results than the existing portals. Not overnight...but over time. A decent investment case...or so I thought.
One year on and the reality is quite different. Here is the investment pitch as it stands today: 1) Our product is not as good as the competition, we know it but we have no intention of doing anything about it as innovation is not what we are about. 2) Our cost to get people to visit our website is far higher than the competition, we know it but there is not much we can do about it because of 1) above. 3) We plan to continue to spend money next year in same way we did this year, not because it works but because our investors keep giving us money every month so why not spend it. 4) We think we will win, not because we are better or have any plan to be but because we are going to try to kill the competition with our 'one portal' rule. 5) Oh and because of 4) above if you invest you need to accept that you might be liable for some hefty fines and penalites at some point if the authorities act. NOT A VERY COMPELLING INVESTMENT CASE AS IT STANDS TODAY.
This has proven to be anything but a 'mutual'. Investors/customers have no say and no information. I recently discovered that OTM is offering far lower rates and better deals (basically almost free) to try to attract new agents. In effect, letting new investors in at far lower rates than original investors. Clearly an act of desperation to survive. Whilst this is very aggravating, my biggest problem remains the 'one portal' rule and I won't go down with this ship whilst that rule is in place.
OTM should immediately drop the 'one portal' rule. I will be cancelling my OTM contract next month if the rule remains in place. Mr Springett may well shrug off losing me as a customer but he is also losing an investor and businesses like his can't afford to lose investors.
You cannot win if you don't aspire to be better and you certainly cannot win if your only strategy is to be a bully. I know when an investment has gone wrong and don't plan to let Mr Springett throw away more of my good money after bad.
As someone who stuck away from the blasted thing I just hope that those involved come to their senses or the whole industry could be damaged. I do not want Rightmove to be left to their own devices.
And one other thing. Why the hell are the NAEA involved in this thing and have a seat on the board? I have chosen to stay away from Agents Mutual and yet I am subsidising it through my membership to NAEA (I assume that Hayward's time is being given freely) - completely unacceptable.
Before OTM launched, Mr Hayward personally told me he thought the 'one other portal' rule was 'ridiculous' and that there was no way NFoPP could endorse it. I would love to know what changed his mind.
An interesting point, my guess is wishful, or possibly wistful thinking, plus the desire to be with what he no doubt perceives as the 'in crowd' of the industry. Perhaps he can redeem himself even now, I mean even George Osbourne can do a Uturn when necessary
Hi Anthony, I'm afraid the rely function appears not the work with your comment so I am replying using a new post.
Wow, sounds like you not me should have written the article!
Hello Anthony,
Excellent comment! I feel so frustrated for agents such as yourself who have been blatantly misled.
I'm astonished by NAEA's relationship with OTM.
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