Interview with Alex Chesterman – zoopla.co.uk
March 2, 2009 by Emma Sorensen
UK based property website zoopla.co.uk began the year with a rush of announcements. The company, which specialises in providing residential property market information, revealed major increases to web traffic, secured £3.75 million in new funding, listed a record breaking 15 million sold house price records and appointed a Sales Director.
The biggest news came last: they are now upping the stakes in the UK by acccepting property listings on a pay-per-lead basis.
The company was founded in 2007, by Alex Chesterman and Simon Kain. They had great success bringing DVD rentals to the web with LOVEFiLM.com, and felt the UK property market had yet to fully enjoy the benefits of the internet in terms of its ability to deliver transparency and efficiency. zoopla.co.uk is the result of their mission to transform the property market for both professionals and consumers.
zoopla.co.uk founder and CEO, Alex Chesterman, spoke to propertyportalwatch.com about the zoopla.co.uk’s plans and the UK market.
With so many property portals already in the UK market, and a steady lead from the Big 4, what led you to start zoopla.co.uk?
There is certainly no shortage of property portals in the UK. Property buyers are well-served by having the choice of so many portals, however agents have not yet seen the real benefits of this, including lower marketing costs and wider reach, as the leading portals have so far resisted adjusting their models away from high fixed fees. We firmly believe in championing efficiency and driving down costs for estate agents and in challenging the subscription fee portal model. Additionally, by providing differentiated services beyond solely displaying properties currently on the market, we see a significant opportunity to target a wider and unique audience.
How does your website differ from other “next generation” competitors trying the pay-per-lead model – eg: propertyindex.com – and what’s behind the switch to pay-per-lead?
The pay-per-lead model is one where the interests of the estate agent and the portal are truly aligned and rewards the portal on the basis of what they can actually deliver as opposed to what they ‘promise’ to deliver. Agents are generally very happy to pay a reasonable fee for exposure of their listings to a significance audience and our model of £1 per buyer lead and £5 per vendor lead is a fraction of the cost of what agents are spending on other leading portals to get these leads. The key areas of differentiation between us and other competitors include the scale and unique makeup of our audience (almost 1 million visits in January, largely property owners), our ability to deliver much sought-after vendor leads to agents and the differentiated services and information we provide users of our website.
Will listings become more important to zoopla.co.uk – and are you working on any other changes to your agent directory and vendor lead service?
Listings are indeed now a significant focus for us along with the other services we offer that are designed to drive useful leads to agents that they convert into business. These include our agent directory and our unique vendor leads feature (AskAnAgent) and we will be launching further features in due course that will help agents build their profile and reputation with our growing property-interested audience.
How have real estate agents responded to the new pay-per-lead model so far? Are there any statistics you can give us?
The response to our offering has been overwhelmingly positive from estate agents, both large and small. Not only with regard to the pay-per-lead element which is being welcomed as a long overdue shift in the market but also our unique ability to drive vendor leads to agents as well as buyer leads. Helping agents find buyers for their current listings, develop their inventory pipeline by introducing vendors and building relationships with local property owners and charging only for qualified leads we deliver…what’s not to like?
You were involved in the high profile and successful online DVD rental start-up LOVEFiLM.com. What lessons have you taken from this to zoopla.co.uk?
LOVEFiLM.com is a great example of a business that in less than 5 years has completely transformed a marketplace. We took a well-established business model (video stores) and used the internet to transform the user experience with greater convenience, selection and value and provide more efficient distribution. In a very similar way, Zoopla.co.uk is taking the property portal model and combining other useful information to deliver a better/richer experience to users and greater efficiency to property professionals by being able to target a far wider property-interested audience at a far lower cost than with existing portals.
What are the key challenges you are facing at zoopla.co.uk?
Clearly we have very big ambitions in a space that has some great existing businesses that we respect. Transforming the market towards pay-for-performance is not going to happen overnight but we do believe that it is the model where everybody’s interests are aligned and therefore we will continue to push this hard so agents can eliminate any wastage in their marketing spend. We do not have the luxury of multi-million pound marketing budgets to challenge the current leaders but equally we are not looking to our agent customers to fund these budgets.
How do you hope to win in the markets you’re operating in?
We believe that by differentiating our proposition and providing other services and information to our users beyond homes currently for sale/to rent we will continue to grow our audience and capture market share. This benefits agents greatly as they can access a different audience from traditional portals and allows them to engage with these users at other stages in the property cycle beyond just active property search. And by being the agents’ most cost efficient marketing partner to obtain both buyer enquiries and vendor leads, we aim to become an indispensable part of the agents’ marketing toolkit.
What else is on the cards for zoopla.co.uk – Any plans to expand outside the UK market?
We have some really exciting plans over the coming months to extend our services and features as we strive to create the ultimate resource of property market information in the UK. Whilst very focused on the UK market for the time being, we are certainly reviewing opportunities in other markets where we feel our services are relevant and expect to launch in a number of international markets in due course.
Where do you see the UK property portal market heading overall, and why?
I think that the new wave of portals, led by us, will result in a shift away from fixed fee, non-performance based marketing with the positive result of greater and efficiency and lower costs for agents. Additionally with the growth of the next generation portals like Zoopla.co.uk, the agents’ reliance on the existing leaders of today will be lessened as their stranglehold over the audience of property-interested consumers is diminished, leaving agents able to select where to advertise without hurting their business rather than being held hostage to pay unpalatable subscription fees.
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[...] propertyportalwatch.com, founder and CEO Alex Chesterman spoke about the changes to zoopla.co.uk saying: “The response to our offering has been overwhelmingly positive from estate agents, both [...]
Very interesting to watch.
Its great being a well funded gungho startup with rose tinted glasses on..
The pay per lead concept is something both industry and analysts will watch carefuly.
Such a crowded market in the UK one does wonder.
Much like we are all waiting with baited breath to see what happens with Zillow.
Love all the media speak about doing nice things for agents ,but VCS are sharks and are looking for big exit prices ,so lets see how it all proves out and lets hope they stay focused in one market.
Zillow didnt go into the uk for good reasons.