It was reported this week by Estate Agent Today that there is a new portal in town to take on the market leaders – propertyindex.com. Now a cursory review of the site shows that it has been around for a while although it was focusing on advertising international properties to the UK market. It seems that the busiess has now turned its sights onto advertising UK properties to the UK market.
Now, at last count, there has to be 15 or more portal sites serving the UK market. Off the top of my head i can think of rightmove.co.uk, propertyfinder.com, findaproperty.co.uk, primelocation.com, nestoria.co.uk, globrix.com, upmystreet.co.uk, zoomf.co.uk, hotproperty.co.uk, zoopla.co.uk, and dothomes.co.uk.
Now the UK is the MOST competitive portal market in the world. Therefore what makes propertyindex.com different from the rest and will it really take on the market leaders?
In the Estate Agent Today article, the Managing Director Lee Bramzil is quoted as saying “We are different from the other UK websites because we charge purely by results. We’re not just taking on Rightmove but all the portals with monthly subscription models. We charge £1 per lead. Portals that charge monthly subscriptions are far more expensive than that when calculated in terms of leads, particularly now the market is so poor and there are so few buyers. We aim to be smarter and faster and, if you like, share the agents’ pain. We’re also different from Globrix in that we deliver leads, rather than just traffic.”
What is interesting is that they are adopting a lead generation model in which the agents pay per quaified lead they recieve. Now this is a tough model to make work. In the early part of this decade, there were many lead generation sites in the US (e.g. homegain.com, housevalue.com, reply.com to name three) and nearly all have disappeared from the landscape with the lead generation model largely discreditied in the market.
The challenge is that for lead generation companies it becomes a game of maths with how much does it cost to generate a qualified lead and they need to ensure that it costs less than they charge for the lead. Now to generate clicks to the propertyindex.co.uk site, the company needs to undertake a series of marketing initiatives including SEO (which is almost free), SEM (so they pay per click) and also SMO (social media optimisation) and perhaps general brand advertising.
Now the challenge is then how many clicks to the site does it take to generate a qualified lead. If the combined costs of these marketing efforts plus the other business costs divided by the number of leads genrated is more than they charge for a lead, they will just go backwards.
In the US, housevalues.com is a great example of this. They spend up big on TV advertising to generate awareness and therefore find it difficult to make a profit on each lead generated.
Now in the UK, where there are so many portal sites vying for eyeballs (i.e. clicks to their sites), it is likely to be tough for propertyindex.com to secure enough volume of clicks at a low enough cost / click to build a meaningful business and therefore it will be difficult to truly challenge the likes of rightmove.co.uk, propertyfinder.com and findaproperty.co.uk.
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There is a fun article from 1000 Watt Consulting called Lead Generation is Dead – check it out http://www.1000wattblog.com/2008/09/from-the-1000wa.html
Thanks for your views on our model. There are a few key facts that are
not covered in this review. The most important is that agents have
absolutely nothing to lose by giving PropertyIndex.com a try. With pay
for results, if you don’t receive a lead you don’t pay anything. There
is no subscription, no set up fee and no minimum term contract. Also,
the team behind PropertyIndex.com have got some serious form in building
traffic and market leading membership numbers with their previous
website. Finally (for now), PropertyIndex.com is privately owned and
the directors plan to invest all the revenue generated into generating
more leads. There are no shareholders to satisfy and no dividends to
pay out. This is about genuine growth as a result of delivering a great
service to thousands of agents across the world. The fact that 1000′s of estate agents have signed up to advertise with PropertyIndex.com demonstrates that there is a massive demand for an alternative to the subscription model.
I agree with the views here that propertyindex are completely wasting their time and money. The market is swamped with portals that offer paid for listing and free listings and free leads. PropertyIndex clearly have not done their research – transactions are down to 25% of what they were last year and there are very few people looking to buy – so there are very few leads….furthermore what is a lead? Just because someone has signed up for alerts does not make them a lead…if someone is really interested in a home they will use an established portal or go straight to the agent….stick to overseas and save some cash!!
I have to agree with PPW and Richard Smart. If I am an agent slashing (and I mean slashing) all my expenditure just to stay alive I am looking at my online marketing spend. If, for example, I subscribed to four portals in the past I will evaluate what they have delivered and how much they cost me and more than likely I will cancel all but my rightmove feed (for now) and the free portals. I have written about cost per lead in the past and again it is unclear from propertyindex what actually constitutes a qualified lead. It looks as if a email and name is a qualified lead in their book. But what if that lead then asks about 5 properties over three days, what will I be charged?
The only way to find buyers in this market is not to rely on your average Rightmove. This should be turned on its head and agents should spend more time trying to find more sellers as these are the most likely today to require a property to buy once they have sold theirs. We have already sent out hundreds of leads to agents in UK in the last 3 months for free based on good old SEO techniques. We do not have a multi-million pound budget but are putting the so called experts to shame in finding quality of leads (see website for information sent to agents). Our model is in the publics interest which is why we are growing month on month by 10%.
Why is our model the best for agents? Because it was designed by asking the public how they would like to determine choosing an agent other than reputation alone!
Need buyers? Find more sellers! it the only way forward!
Incidentally our service is free to agents until Jan 2009 – when we will charge a token annual fee to remain in top positions thereby ensuring impartiality!
Unfortunately I fear that the £30m fortune of the backer of this venture is not going to go very far given the agressiveness and appetite for the big 4/5 to spend and grab consumer awareness.
Of course agents will try it – but without burning huge cash on marketing or out performing Rightmove and Findaproperty on SEO – it ain’t going to work
This is the only vertical which has all the major media brands playing in it – it is not a place for the poor or faint hearted.
I agree and disagree, I think Propertyindex.com offers something different for once, especially for agents struggling in the current financial climate. Some of the remarks left here sound like a load of bad losers to me. For ages Rightmove have been ripping us off and come the new year I wont be renewing. Comments from Rightmove like ‘leave us and go bust’ just show what type of company they are. Arrogant.
However, although they seem to have some serious financial backing from wherever they will need to monitor what they spend very closely to make ends meet in the current financial climate to be still existing next year, and the year after. It will be hard to generate those leads as hardly anyone wants to buy right now and I will be interested to see how good a quality the leads will be over the next few months but so far all seems good and im impressed.
Interesting comments, but I read agents are leaving rightmove et al in droves because they charge too much. Local press is just as expensive and hard if not impossible to measure response. There are the free portals like Gobrix, but if the author is correct in his ascertations then it follows that these cannot make a profit and will therefore fail (even if they take longer to fail because they have a lot of financial backing).
Rightmove et al are already being challenged by market conditions. Estate agents still need to market properties somewhere online. So it follows many will go to cheaper portals like propertyindex whether they make a profit or not. I seem to remember sites like Amazon and Lastminute surviving using the loss leader model.
All very interesting comments, I have been keeping a close eye on propertyindex and it is very refreshing to see their approach to the market, and the industry.
Several comments have been made about the value and quality of leads, looking at what they say on the site the leads are actual enquiries from users about specific properties.. the same as enquiries are generated on Rightmove, propertyfinder etc.. and at 1pound per lead surely that’s better value than paying 400pounds per month per branch for a few dozen enquiries in the current climate? Leads are only charged for if they are unique (1 person making 4 enquiries to the same agent are only charged for once) and low quality leads that are uncontactable for whatever reason can be disputed by the agent and again not charged for.
Anyway, the facts speak for themselves, PropertyIndex.com claim to already have over 4500 UK agents signed up in just 2 months since launching in the UK and have already overtaken Globrix, Thinkproperty and Fish4 in terms of unique visitors to their site. I think we should all “watch this space”
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