75% of Current Subscribers Will NOT Renew?

Last month in the UK an industry blog called Estate Agent Today (www.estateagenttoday.co.uk) started a visitor poll asking agents if they were going to renew there subscription with the UK’s leading website, rightmove.co.uk.

That poll revealed that 75% of UK agents would not renew their subscription with the portal when they fell due. This has lead to many weeks of hot discussion in the UK ultimately resulting in some massive changes in their industry.

Could a similar situation arise here in Australia if agents were forced with rises in fees in trying times by one of the major portals? In Australia realestate.com.au is in a similar position and has made it clear they will be increasing fees significantly.

Firstly, to put this in perspective, as Simon Baker commented on his site PropertyPortalWatch, anybody could complete the poll. This meant that the results were not going to be an accurate representation of exactly who would cancel. It revealed more the underlying sentiment of the industry and since then UK agents have been extremely vocal about the way they have been treated.

The agent complaints centre on two major issues, Rightmove’s fee structure and their attitude towards agents. Sound familiar?

Many agents started to advertise their rental properties more so Rightmove went for the jugular going so far as to increase rental advertising costs by 30% in the past year. It is no wonder that they lost 500 agents in July and has been losing around 300 agents every month since.

The Global Financial Crisis has put pressure on everywhere and since the results of this poll became public the roll on effect has snowballed.

Rightmove.co.uk have announced that 20% of their staff are being laid off.

Membership to an industry cooperative called the Estate Agency Buying Group (www.eabg.co.uk) quickly surges to 1600 trying to put pressure on rightmove.co.uk and all paid portals to reduce their fees.

Rightmove’s share price has been slammed particularly hard as it tumbled to 18% of its value since March 2008 and there is now rumours of a takeover.

Rightmove issued a press release stating :

  1. A reorganisation of the existing estate agency sales force and customer service teams into account management teams, each covering a region of the country.
  2. Greater focus on the national and regional house builders as well as the growing housing association market, with less focus on more speculative individual developments and property conversions.
  3. A scaling back of the Rightmove Overseas business to reflect a decreased demand for property in continental Europe.
  4. Exiting from direct selling of banner advertising on the Aboutmyplace mapping website reflecting the general excess capacity for on-line generalist banner advertising.
  5. A general reduction in overheads in line with the tough trading conditions being experienced by the property industry as a whole.

Rightmove has announced increased marketing, changes to their lead response and allocation system to improve results for agents, but it seems it is too little too late.

So what lessons are to be learnt from this??

If a poll was run in Australia and local agents sent REA the same message, would they laugh it off so quickly?

Realestate.com.au must be looking hard at this agent backlash in the UK. They fill the exact same position here in Australia that rightmove.co.uk fill over there. Despite the current conditions REA are increasing their fees at ridiculous rates. They are the significant market leader escalating costs whilst many agencies are closing their doors because of turnover round 30% of the business they did the year before.Β  REA has also started scaling back their overseas business.

They have a reputation of arrogance and this writer believes that they have no real goodwill built up with agents, particularly over the past year where it has been one blunder after another. If the industry decides to teach them a lesson they will come out of it with more than a black eye when they get belted.

In recent months I have heard a number of industry trainers openly

Will REA learn from rightmove.co.uk’s experience or will the industry finally say enough is enough?

Should we run a similar poll?

Portals, Realestate.com.au, rightmove.co.uk

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About Glenn Batten

Glenn Batten is the General Manager at First National Real Estate Nerang and Principal at the First National Real Estate Upper Coomera office and has over 20 years real estate experience and a passion for technology. Glenn has been writing from an agents perspective on industry issues and covering a range of topics on Business2 since 2007.

42 Responses to 75% of Current Subscribers Will NOT Renew?

  1. Robert Simeon November 19, 2008 at 3:08 pm #

    Rule Number One – The Customer is always right!

  2. Peter Ricci November 19, 2008 at 3:16 pm #

    Great article, I would consider any rise in fees over the next year as a top in my ‘dumber and dumber award’ as both REA and Domain have not had the best of years in relations with agents.

    REA really do have a problem as I rarely speak with an agent who is happy about the service and fee increases.

    Their new CEO will need to convey a real message to all of their staff and that is, tread lightly, be understanding and we will back this up with a fee freeze over the next two years at least.

    This is not about shareholders, it is about the long term viability of the revenue models of both REA and Domain.

  3. Coastal agent November 19, 2008 at 3:37 pm #

    I bet REA & Domain wouldn’t be game to poll their subscribers as to whether they’d be renewing their subscriptions. I believe both portals would find that probably 80% of subscribers wouldn’t renew. The problem is though that we will ultimately renew our subscriptions because depending on our marketplace we need to be on one if not both sites.

    Unfortunately we’ve caused this problem ourselves by letting REA become so big and dominant whilst we accept crap service and constantly increasing fees. As agents, we really should pull our heads out of the sand and collaborate together on a portal site that represents us and not some corporation thats wants to bend us over at every opportunity; maybe then we could bend some of the big corporations (banks & similar) over through advertising fees thereby making the portal self sufficient?

  4. Robert Simeon November 19, 2008 at 3:43 pm #

    Coastal – they could then do a survey/poll here for example. I would add that Domain do offer excellent customer service from those agents that I speak with. This will be a very interesting thread πŸ™‚

  5. Glenn Batten November 19, 2008 at 4:10 pm #

    Coastal,

    I understand what you are saying, but I bet rightmove.co.uk thought they were insulated as well.

    Nearly 1800 less clients in just 5 months is a wake up call. Lets assume that they pay around 1000 pounds per agent per month, that represents 21 million pounds reduction in their income. Thats going to hurt anybody.

    Robert,
    If somebody mentions the REA share price we might even get some financially interested parties raising there head **cough** TomS **cough** although I would be interested to hear Simon’s take on it.

    He has commented heavily on the rightmove issue and he has quite a few million reasons to have an obvious bias on how it would relate to REA, but his opinion could still be interesting.

    Peter,
    The poll that was run was a bit like a loaded gun and I would not recommend we copy it, but I reckon a real independent poll might be a good thing. The ones each portal do on themselves are nothing short of a joke… I reckon we see what we can pull together…

  6. Coastal agent November 19, 2008 at 4:24 pm #

    Robert, Domain has been just fantastic (I’m being sarcastic!)

    I fondly remember their rep first visiting us with all the promises in the world. Since then they’ve split sections off and charged seperate subscriptions thereby indirectly increasing prices (commercial & holiday properties) so in my view they are no different. REA has and will again do the same (realholidays is becoming a seperate subscription) but I guess the real difference is that each time our rep comes round or calls I automatically know a price rise is coming!

    I think Glenn hits the real point as to why REA & Domain wouldn’t do a poll. Share prices would plummet on the results amid dramatic fears of falling revenues!

  7. SSSR November 19, 2008 at 5:00 pm #

    I would imagine that print media will be the first thing agents will cut.

    Agents I spoke with on the weekend seem happy with REA’s lead generation capability. My agent conducted an open home on one of my properties last weekend and every single response to the question of how did you hear about this open home was REA. No mention of newspapers at all out of the 50 odd people that went thru.

    While they may not be happy with the rising portal fees, it still seems significantly cheaper than print, with more measurable results.

    As a buyer, I dont remember the last time I picked up a news paper to find property. It all comes via home alerts direct to my email these days.

  8. Bryan Thomson November 19, 2008 at 6:13 pm #

    An interesting thread and perhaps yet another reinforcement of the value of our industry working together to own their own portal. Some may say it’s too late in Australia but if you have a look at the New Zealand situation where http://www.realestate.co.nz is industry owned, has over 90% of listings held by real estate agencies and is a clear number 2 in the market perhaps it’s something that could be addressed?

  9. SSSR November 19, 2008 at 7:04 pm #

    Inst there already a number of Industry owned portals here in Oz?

  10. Coastal agent November 19, 2008 at 8:58 pm #

    There are a number of portals owned by industry groups such as EAC (realestateworld) and a number of franchises own homehound. These and other sites have been pretty poorly accepted by agents in general because we all (mistakenly) feel that we so desperately need to be on realestate.com.au. The danger with homehound is that Ray White was one of the chief instigators of homehound along with L J Hooker but Ray White nowdays owns I think 17% of REA.

    I note SSSR comment about your agent getting all their inspections of your property via REA and is therefore happy with the lead generation. This is what REA relies on. Bear in mind buyers will look where the most properties are; whichever site has the most properties and is most widely accepted (by agents) will receive the most traffic and therefore generate the most leads no matter whether it’s called realestate.com.au, domain.com.au or xyzproperty.com.au

  11. Robert Simeon November 20, 2008 at 9:40 am #

    Interesting commentary although I would like to make a few points. On a personal note if a real estate business is competitive in their respective marketplace the property portals (if charged correctly to vendors) should not be costing the business.

    Every area has different portal preferences ie Mosman has Domain performing better than REA. Having said that REA still perform adequately my point being they both deliver which is the reason why we still subscribe to the respective businesses.

    A clear point here is that it appears that the greatest problem with the portals (whilst performing) many agents simply don’t like them because they don’t care for the customer. It is no secret that REA have atrocious customer care however that has always been their culture. Somethings never change!

    However, they still fill our respective inboxes with enquiries and that is the nature of the beast. I see the property portals suffering from an identity crisis. They know they are not that popular yet it would appear that they are intimidated by the agency furore.

    They need to get a truck and fill it full of olive branches as agent perceptions will only get worse until decisive steps are taken to correct this annoyance. I can see having read the comments why quite a few have such a dislike as I have long argued that sometimes our idustry media parties see us nothing more than ATM’s.

  12. PaulD November 20, 2008 at 11:37 am #

    Robert, why do we expect customer care from the real estate portals?
    Do you expect customer care from the SMH ? or the Manly Daily or whatever print media you advertise in ?

    Customer care or a personal relationship with the account manager is at the bottom of my list of priorities when it comes to marketing real estate – results are at the top of the list. Then comes ease of use of the software, then comes quality of the presentation, then comes the speed of upload, then comes the ability of the site to reproduce everything I need to be able to market a property, there are about another half dozen things including price that come before customer care.

    A real estate portal should be an efficient, clinical, speedy, highly visible, and highly accessed means of marketing property. Customer care is for people who have a lot of time and money to waste.

  13. snoop November 20, 2008 at 12:46 pm #

    Good point Robert
    Agents like to whinge about cost but I recently had pitches from 3 agents who wanted between $200 and $500 from me for internet advertising,
    Seems to me many agents are making money out of this!!!!.

  14. tom kentwell November 20, 2008 at 2:27 pm #

    The real estate industry is not it

  15. Devnet November 20, 2008 at 2:51 pm #

    Our company has spoken with a number of firms about the increasing costs issue and we advise that they should be working with Web Development company to ensure their website matches their business.

    If business is struggling, the last place that you should cut costs is your own company website.

    If REA is driving a majority of your website traffic, you should ensure that the clients are finding a useful and effective website when they arrive at your site. You can measure everything online so you should be focusing your efforts on your online strategy along with REA.

  16. Glenn Batten November 20, 2008 at 3:37 pm #

    As the SECOND best national property portal, that’s nice of Domain to say agents shouldn’t worry about which portal is better than the other πŸ™‚

    In fact, get annoyed all you want Tom but ranking the performance of any supplier is a standard business practice I cant see stopping any time soon. With REA admitting that 30% of their traffic comes from just Google alone, instead of chastising agents why dont you expend your energy into decent SEO and you might close that large gap and agents would worry less about which portal is better!

    Whether the Non-Agents here want to realise it or not the majority of agencies (not salespeople.. they dont pay the bills) are not happy with way they are being treated in particular by realestate.com.au. This does not mean that they do not provide results.. On that count realestate.com.au and domain do very well. I have never heard an agent say that they dont get results from either. I will even go so far to say that it would be just about impossible to run a leading agency without a subscription to one or both of these two. The problem is as you are not an agent you can only see part of the relationship and that is often from the eyes of a consumer only.

    I am not going to go over all the reasons here but you only have to go back through the archives to get a full understanding. Things like the email fiasco of earlier this year. Where was the open disclosure, the empathy, the compensation? They chose to fix the problem and dribble the emails back out without alerting agents of what had happened hoping that nobody would notice. Many agents were abused by clients and many would have lost business by it. Only when it was brought to light here did they admit to it.

    Then you have default ordering of properties by list date and then only showing 200 properties at a time so they can push “feature” properties to bring you up the top of the list. In some suburbs in Australia the feature properties make up the majority of the first 200 so that if you list a property it starts from day 1 at like position 150 will remain on the first search page for the suburb for only a matter of days unless you pay them more money. I asked once why they did this and I was told it was because it was what was best for agents and consumers. I asked then why not one other REA portal around the world had the same issue and I was knocked over with the silence. The reason is because realestate.com.au is the market leader.

    Price rises in this marketplace whilst so many agents are suffering is a real slap in the face.

    I think of it like a rubber band. The market leader in any industry will always strain against the band pushing against its resistance a little. Why.. because they can..

    But realestate.com.au have stretched the band to its limit. Should it break, I believe they risk our industry reacting like the UK industry did to rightmove.co.uk.

    This article was not about saying that any portal does or does not work. Realestate.com.au is clearly better than all the others including domain (sorry tom). But that does not give them a license to treat agents like their own cash machine. Being the number portal in the UK providing more enquiries than anybody else has not saved rightmove from a whole lot of pain. Being an executive with that company would not have been fun over the past few months.

    The views and opinions of the non agents (and portal staff..) is very interesting and certainly adds to the whole conversation, please understand that there is always another side… and another… and another…

  17. Glenn Batten November 20, 2008 at 3:54 pm #

    Snoop,

    Everyone seems to think an agent pays $800 per month and has 100 listings so the internet only costs an agent $8 per listing. This is the maths a seller uses all the time but is totally removed from reality!

    $200 to $500 might sound expensive to you but it could be easily justified without even costing in a percentage of the standard portal subscriptions every agent pays and since the majority of agents only have 20 to 30 listings that would represent about $120 given todays time on market figures.

    A standalone virtual tour website is going to set you back $120. An individual feature property upgrade on realestate.com.au is $85 (up nearly 50% in a little over a year). A realestate.com.au ebrochure can cost you $600 (that is quote on just one of our properties 5 min ago) which is calculated at 55c each. How do they justify that… ??? Who said emails were free!!

    Then you have professional photography and property video. Minimum charge to get both would be about $350 although you can spend thousands.

    Then you can start looking at digital floorplans, ecards, adwords and host of other costs that could be included.

    So your quote of $200-500 could be expensive, or it could be a bargain… it depends upon the details… but doesnt it always!!

  18. Glenn Batten November 20, 2008 at 4:07 pm #

    Snoop…

    Sorry.. forgot to mention.. that feature property charge .. is $85 PER MONTH!

    The REA rep wanted us to do a “Feature All” add-on which makes all of our properties a feature property.. placing it int he top section (not the very top every time.. that is another add on costing even more again) of the list when you do a standard suburb search. That was going to cost around $24,000 per year.

  19. Coastal agent November 20, 2008 at 4:32 pm #

    I can’t speak for other offices but for our office the costs for domain are $440p/m for very little response (email & 1300 number combines) plus if we had kept our holiday rentals with domain (Stayz) the fee (nightly rate) for stayz would have been on average higher than our total commission for those bookings. Had we also stayed with Domain for commercial property when they split the site and introduced an additional sunscription our total fees to Domain would have been around $3,000 per month without feature listings or anything

    REA are on about $700 for residential & commercial and will soon charge extra for holiday rentals. We won’t be affected too soon on that as last January I signed up for a 2 year term. REA is by far the higher performer for our area so add ebrochures @ $0.55 each, feature listings @ $85 a month per property, guaranteed top spot @ $140 per week per suburb and banner advertising at whatever the cost is at the moment per suburb and it becomes quite an expensive exercise. REA is now auctioning off things like guaranteed top spot and banner ads to increase their take.

    The fact of the real estate market at the moment is that the agents that you see in Sydney, Melbourne & the Gold Coast represent a small section of the market. The vast majority of agents throughout Australia are not writing 10 sales a month, more like 2 to 3. Many, perhaps even the majority throughout Australia do not in fact charge vendor paid advertising!

    Imagine on the other if the industry did get behind ‘our own’ website. REA and Domain would be left devastated and we as agents would hold a genuine asset and control our marketing. We could then sell advertising to banks & those rediculous listing generation mobs and either use those funds to fund the site or return dividends to us as the owners. That is of course not a new idea in business; although recently sold Dairy Farmers had used a similar process for many, many years.

    Naturally, portal employees who post on here are going to defend the portals and insinuate that agents are whingers; this is perhaps the same old arrogant attitude that has led agents to a hatred of most portals to start with.

  20. Sal Espro November 20, 2008 at 5:28 pm #

    Industry-owned portals have been tried many times and failed many times (including Realestateview in Vic and SA) , ‘Coastal’ – for several reasons that would all come into play every other time it might be tried.
    There are other ‘private’ options though to side-step the Big bullies. Agents just need to keep their minds open and unfortunately they don’t, in general. That’s the nature of the industry.

    Sal πŸ™

  21. Bryan Thomson November 20, 2008 at 6:20 pm #

    As I said look at the NZ example, a site that achieves all the media owned portals do without the profit driven motive, offers great traffic stats and lead generation performance and in addition exceptional subscriber service. Couple this with leading edge social media support and you’d have to ask why the Australian Real Estate Industry hasn’t or doesn’t do the same? Can it be that the NZ industry is showing the way in this field……
    It can be achieved, it just requires strong leadership, a clear vision and open minds.

  22. Glenn Batten November 20, 2008 at 6:46 pm #

    Bryan,

    I think what happened is that most of the state industry bodies tried to create their own state based portals which left commercial interests to focus nationally. Each of the states seen these portals as an income stream and thus each state did not want to share with the others. Whether this was from arrogance or ignorance is for others to comment on because I was never close enough to know… but as an outsider with some technical knowledge it always looked like the blind leading the blind.

    Generally the industry owned portals have been very average and of little consequence in the bigger picture.

    In hindsight, the industry bodies should have pooled their budgets and paid for one national portal. The primary objective should have focussed on the service to its members first, rather than additional funds to the state bodies. An investment in the industry’s future.

    The industry as a whole could still tackle it, but I reckon the politics of state based bodies will always be in the way.

  23. PaulD November 20, 2008 at 6:47 pm #

    Good comment Bryan. The only thing is that in many cases “open minds” and “real estate agent” should never be said in the same sentence

  24. PaulD November 20, 2008 at 6:49 pm #

    And Glenn, I think you have just about summed it up perfectly.

  25. PaulD November 20, 2008 at 6:58 pm #

    Too many egos, too many people thinking it was going to be a cash cow, whilst the whole point was to keep it affordable for the industry. When you keep it affordable for the industry, there are not huge profits to be taken. The people making the decisions were old style agents who really knew nothing of the technology, only that they thought they would make themselves huge profits like the dot com bubble, and look what happened there. Meanwhile, as you said Glenn, whilst the agents were counting their soon to be fabulous profits, the commercial interests beat them to the punch.

    Of course it can be changed, but you have to put the egos away and talk sense. It seems obvious to a lot of people, but that doesn’t mean it will happen any time soon.

  26. Sal Espro November 20, 2008 at 10:47 pm #

    All interesting comments that unfortunately don’t really get us anywhere guys. I guess we need a new knock-out model to side-swipe the status quo. Any ideas? πŸ™‚

    Ps Glenn, I was close enough to know everything.

    All the breast,
    Sal πŸ™‚

  27. Greg Vincent November 20, 2008 at 11:31 pm #

    Great headline for this post Glenn, wow couldn’t this start a mini riot…I love the power that has been handed back to the people via Web 2.0.

    This visitor poll from estateagenttoday.co.uk will certainly have them talking in the boardrooms of all the major portals…

    To talk about the knight in shining armour coming along to save the day is best left for the fairy tale endings and isn’t really going to help anyone because no one will have the required funds to promote it, except Google (but there’s another story)…

    It’s more beneficial for agents to try to find ways to utilise these portals to their benefit…Here’s a tip that I have shared with a number of agents already. It’s a way that agents could rank higher on Domain without having to spend any money…

    Domain is ranked in price order & from my previous experience with Domain I understand that if 2 listings are featured at the same price then the most recently added listing is ranked the highest.

    Now, when you look at the way agents across the world display the price of their listings, most seem to use a similar price model, say $599,950.

    If you simply made your listings $1 cheaper then it stands to reason that they should rank ahead of your competition on Domain.

    If you don’t want to display the price as $599,949 then maybe display your prices at $599,900 instead… and jump ahead of your competitors listings for no extra cost…

    There are so many ways that you can embrace the tools that you already have. Stop looking for an alternative portal to come along to save the day.

    Instead learn ways that you can get the most out of what you are currently paying for…I hope this helps. πŸ™‚

  28. tom kentwell November 21, 2008 at 1:11 am #

    Glen; to start, just clarifying some things for you;

    Your comment;

  29. Glenn Batten November 21, 2008 at 5:17 pm #

    Tom,

    That beginning of the paragraph you extracted a quote “Whether the Non-Agents here want to realise it or not the majority of agencies……”.

    Ummm. I am not sure what you clarified about all of this. Your not an agent now. but you were and therefore you do understand the relationship more than a consumer.

    It was not written with you in mind actually. I thought I was pretty clear pointing out the stuff that referenced you… like the first paragraph πŸ™‚

    Maybe I should have excluded ex-agents as well. Or maybe because your fairfax staff, who has been an agent, and probably a consumer that you are suggesting that you understand all those “other sides”. No doubt you understand a few more than many but I doubt you or anybody understand it all.

    I agree with your point about technology changing and I understand the history of the web and the net but I got to tell you I don’t really see the connection your trying to make with this and the topic at hand. Maybe with the “enormous cost involved” you are trying to justify the charges involved. But even with that you lose me as we only pay around 25% of the REA cost for Domain which gets back to my point about ranking the performance of any supplier. Thats all Domain are worth to us.. thats all we will pay… and Domain agreed.

    In fact the costs of running the portal are minute to those of running the corporations that run a few of them. As an example the US has more technically advanced portals that survive quite well without massive agent funded subscriptions. Certainly there is costs involved of running a portal but things like golden handshakes, executive option packages and bonuses, massive international travel, sales bonuses etc etc etc are not intrinsically necessary.

    These 6 monthly changes you talk about in the industry.. go and have a look at the web archives at the evolution of the Australian Portals being discussed and you will see not much has changed much over the years. oh yeah.. except for the ads… lots more ads

    In fact I must admit what I find strange is whilst this topic has Domain attached a bit, the real connections for my mind lie with Rightmove and Realestate.com.au and you seem to be jumping in defending portals in general but that is not where most peoples concerns lie. Well not mine at least. Your not an REA spy are you?? πŸ™‚

  30. Bryan Thomson November 21, 2008 at 6:41 pm #

    All good comments and accurate in regard to the past but the future is in the hands of those making decisions today, not yesterday. I know all about ego’s and agendas but can only offer the suggestion that if those of us in NZ who drove http://www.realestate.co.nz , against all the doubters, ego’s and agendas can succeed then there is no valid reason not to try again and succeed in Australia apart from lack of want. Probably much easier to complain about the status quo than actually step forward and do something to change the current reality………………………………

  31. AJ November 23, 2008 at 8:33 pm #

    Bryan

    You do raise a good argument.

    However New Zealand only has one Institute, and strong legislation supporting the Institute and members.

    The partnership with PPNZL was a winning formula in NZ.

    In Australia, there are around 8 state/territory institutes and one national institute. Slightly different composition, so direct comparison is not easily done.

    Even if we were to compare NZ to Victoria, where perhaps the strongest Institute resides, the Institute portal ranks low compared with the two media portals. They have strong legislation, and a good grasp of member marketshare, yet still not performing well. So no vision/transportability here either.

    The Property Page Ltd partners in Australia are a very different beast to NZ. Most of them supported Myhome, in what one can only assume to be an attempt at grabbing advertising revenues. (Remember, they were also at the same time running homehound.com.au – so no clear strategy nor commitment to either venture)

    So perhaps it is not appropriate to suggest “Probably much easier to complain about the status quo than actually step forward and do something to change the current reality …” when one should first acknowledge the current Australian reality.

    What influence do you have from your PPNZL position, over the AU PPL? this might be a great start …

  32. Mr Burns November 23, 2008 at 9:09 pm #

    Now that NineMSN have gone with Domain you won’t need REA for much longer, the portal who has NineMSN will win the day,

  33. SSSR November 23, 2008 at 10:14 pm #

    From my consumer view of the real estate advertising industry, it seems that the portal world is a natural monopoly. It seems that it would not work unless there is one dominant player. Of course there are niche areas to exploit, but it seems inefficient from a consumer perspective browsing across multiple portals for real estate. I speak looking at Australia as the example.. maybe this is because it has been a monopoly for quite some time?

    It also seems that many attempt to try and fragment the market with little success. Even points of differentiation have failed to really get traction.

    Its a very interesting market….

  34. Glenn Batten November 24, 2008 at 10:32 am #

    SSSR,

    You can just about pick any industry and in theory it would be better to have only one operator who passed on those economies of scale. Unfortunately that just does not work because of human nature. Only competition stops a monopoly from abusing its power and there is enough real world examples out there of that. It does not even have to be a monopoply… just look at the recent convictions in Australia about companies operating a cartel.

    I don’t think you will ever find just one portal in this space. Look at the prices and fees REA charge now as market leader.. imagine if they were the only operator in town. ouch!!!

    Ideal yes… A Reality? … No!

    At the end of the day, the charges that are inflicted on agents are passed on to property sellers either in the form of vendor paid advertising or the loss of other marketing opportunities.

    As per Snoop’s post earlier, many people out there have no real clue what agents are being charged… And who thought the web was free πŸ™‚

    When you can easily run up $1000 in online marketing costs in Australia against a property without trying real hard the differential between print and online is not as large as many people think. Of course a cynical person would suggest that’s because the online portals are owned primarily by traditional media…

  35. Robert Simeon November 25, 2008 at 10:39 am #

    Get ready for an entirely new landscape next year and there will be plenty of property litmus tests ahead. When you look closely at our property markets sales transactions have gone from a medium walk to a crawl.

    Vendors advertise in print when the market is engaging with purchasers and if the current market is anything to go by I expect vendors in 2009 to go directly to online. We will see (as I mentioned many weeks ago) vendors sharing pages whereas before if we had six pages now I believe that we will see six properties per the one page. Print advertising will be used as the pointer to the more informative online property presentation.

    Whilst this may sound great for online it was also place them under the microscope of performance as each lead will come under greater scrutiny. Naturally, agents will also scrutinise their very own online operations to ensure it is running at its peak performance ie SEO.

    I also predict that agents will flock back to newsletters as this is the leading method of communication with clients. Also, many will start sending out email alerts either internally of by the major property portals.

    I believe we will see two stage property marketing campaigns where respective properties are initially launched online where it will be database marketing combined with property portal marketing. Then depending on the motivation a much smaller spend in print as the campaign may take three months.

    2009 will be an entirely different landscape for all concerned.

  36. Craig November 27, 2008 at 7:39 am #

    Just to add more fuel to the fire, it appears that Google Base is getting much closer to launching in Australia. If you look at the available item types for Google Base in Australia you will see housing is the only one currently listed.

    http://www.google.com/base/feeds/itemtypes/en_AU

  37. Glenn Batten November 27, 2008 at 8:55 am #

    Google Base should be launching very soon. It’s not really a secret as such but until it launches you wont find much information about it because it has been played in typical google style very close to there chest and those that were told a little bit of information had to sign confidentiality agreements before being told anything at all.

    Google Base is really a horizontal play where the best exposure of property would be how it is integrated into other google search services. What I would love to see is a vertical play where Google release a Google Real Estate portal.

    They are really the only one who could deliver such a portal and be a major player overnight. Could you imagine the pressure placed on the subscription models of REA and Domain. In fact, if it provided significant enquiry numbers to agents the headline of this article may indeed turn out to be true as agents freed up a significant cost.

    Whilst it is unlikely it would not be unheard of. They can be a pretty secretive bunch when they want to be. Look at the Google Phone. Rumours ran amok for years before they released Android and shocked the world. Closer to home, nobody knew that Google Street View would be released covering regional cities and even small towns. The major capital cities were expected but the rest was a bonus nobody guessed at.

    Australia is a perfect market for it as well and agents would flock to a Google Real Estate Portal like moths to a flame. We can live in hope… but I would hate to be a shareholder in REA if that came to pass.

    One reason that Google would not be looking at a Vertical real estate portal is the huge amount of money that the two main portals. It would need to generate more in revenue than they would lose because you would have to think that REA and Domain would pull their advertsing on the Google Network.

    Simon Baker revealed that Google alone represented over 30% of realestate.com.au’s daily traffic. If only 10% of that traffic was generated from google ads, that still represents a huge revenue loss if they pulled it.

  38. Robert Simeon November 27, 2008 at 9:33 am #

    Google is our second (after direct) for traffic to our website providing 22.20 per cent. Domain 10th and REA is 18th. One must also not forget that both REA and Domain would be spending plenty on Google Adwords – so it will be interesting to see how these relationships continue with the inevitable release and my understanding is that our property markets are agenda one.

    Once this takes off then employment, motor vehicles, boats the full online gambit. Don’t forget that shortly agents will be able to upload directly to Google where the cost of Google Adwords will skyrocket for those who do have a strong organic SEO.

  39. Sale Espro November 27, 2008 at 4:49 pm #

    No surprises there, surely Robert.

    The portals don’t refer any traffic to agency websites from your (your vendors’) listings, only from your agency’s profile pages, as I understand it i.e. they are ‘fenced’ environments.

    However, the portals do compete with your website (and its listings) on Google. Ironic, isn’t it. You’re paying them to compete with you. Yes, I know you’re hapy about that but its a strange situation , ain’t it!

  40. Shane Dale December 9, 2008 at 6:01 pm #

    As far as I can read from here
    – there doesn’t appear to be a viable option for agents to support other than myhome.com.au which is now free – forever.

    Even for those who don’t believe it will work, can still place an “each way” bet – without costs or hassles – by loading – what has anyone got to lose?

    I know there are some die hard pessimists here – but seriously – is there a legitimate reason for anyone not joining now?

    Its ready to go, its enterprise class and its real – not just an idea.

    2009 is the start of the push – stay tuned for fresh ideas being implemented, including viable revenue streams which can keep it performing.

    ps – please note I didn’t say its perfect – but it is a very good portal, about to change to my new improved design format, which answers many of the issues raised. Comments as always welcomed, here or directly. Thank you.

  41. Glenn Batten December 9, 2008 at 8:41 pm #

    Shane,

    I am looking forward to seeing the new design. The only real issue I have had recently has been over the accuracy of the data which I have given examples of previously. That of course was left over from when you took over so I am hoping you have sorted that out by now as I have not remembered to go back and check..

    During the MyHome version one we received just two enquiries but about a dozen complaints and that was a legitimate reason to cut the cord. If that problem is truly gone then lets get it on πŸ™‚

    BTW.. name me a perfect site??

  42. Shane Dale December 10, 2008 at 11:44 am #

    Fair comment Glenn, regarding data, I can summarise – when PBL started the data input was rushed and very very messy and not managed well at all.

    Over time, under PBL, their data processing got better, as did the data feeding from head offices who often had never loaded as an entire group before ( most load as single offices).

    By the time I returned, the data feed was good, and I have refined that plus added the critical features which allow ordinary staff to be able to fix issues instantly or give a direct login for agents to edit their own listings instantly.

    Also there is a xml receipting engine now which is ideal for investigating issues and solving them by tracing the data flow. Groups loading now have reported no problems at all over the last few months, but we can fix whatever comes very quickly now without needing high level IT staff.

    I don’t expect anybody will be getting high enquiry levels at this time, until the marketing push begins – and that will be done region by region, not nationally in one go. We need the stock before we can market the site effectively.

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