eMoov’s chief executive Russell Quirk analyses the ‘war’ between property portals
eMoov’s chief executive Russell Quirk analyses the ‘war’ between property portals
There is no doubt that plenty has been written and said about the portal wars over the past 18 months with a lot of noise from both supporters and detractors of last year’s new entrant Onthemarket (OTM). I am a detractor and make no attempt to hide it. But I am not anti-OTM for the reasons some might suspect. It is simply because good businesses make decisions based on data, not emotion.
OTM has actually been a godsend for businesses like eMoov and our competitors, like Purplebricks, both in terms of our story with investors, ability to raise capital and our story with consumers and the ability to win instructions. We now charge less and offer more than many traditional agents, thanks to OTM.
Despite all the noise, we thought it would be worth examining the portals head-to-head to make sure that we aren’t missing out on anything as far as OTM is concerned. Here is what we discovered using actual data (apologies to those who prefer their gut):
Traffic
Using Hitwise data for April (OTM’s best month yet), Rightmove today has a portal market share of 67% versus 31% for Zoopla Property Group and 2% for OTM. On a trailing 12-month average Rightmove gets 87 million visits per month versus 39 million for Zoopla and 3 million for OTM. Marketing on Rightmove and Zoopla, as we do, gives 98% market coverage. This fact seems quite at odds with some of the promises made by OTM as to where they’d be by now.
Cost per visit
Each of the portals spend on marketing to attract an audience. Using Hitwise data from the past 12 months and publicly stated marketing spends, it costs Rightmove around 1p for each visit versus 2p for Zoopla and 30p per visit for OTM. Since agents are funding OTM, this fact doesn’t seem to sit well against the objective of helping agents spend their marketing money more efficiently.
Enquiries
An important data point in evaluating the efficiency and return on marketing spend is the cost per lead. Assuming the same conversion rate of 5% for all portals and using publicly stated branch numbers, the cost to an agent for every lead is £2.81 on Rightmove versus £2.33 for Zoopla and £15.27 for OTM. Not quite sure how to square this fact with the fiction that is spun by OTM’s supporters.
By any rational measure, using actual current data as opposed to impossible future promises, OTM is struggling. Its members are funding an extraordinarily expensive exercise of attracting visitors every day who generate leads that are far more expensive than its competitors, without having dented their market share. At least £20m has been spent so far on this failed project and that figure is growing by a further £500,000 per week – to what end? The actual data is so inconvenient when spinning fiction!
Another data point we thought was interesting was that almost exactly two years ago agents had a choice of investing £5,000 per branch into becoming an OTM Gold member or becoming a Zoopla shareholder at a discount. Those who chose to invest in Zoopla have made a 70% return in under 2 years, with a £5,000 stake now worth over £8,500. Those who loaned money to OTM will be lucky to ever see their money again, judging by the look of the data available.
