Rightmove has set a new target for advertising rates this year.
The ARPA (advertising rate per advertiser) target is to get an extra £70 on average – at the top end of the £60-£70 rate of annual growth in previous years.
The rise would put the average paid by an estate agent branch per month up to about £820.
Last year, Rightmove reported that its advertisers paid on average £754 per month, up from £684 in 2014.
The size of this year’s planned hike was revealed in a meeting with analysts on Friday, after Rightmove released 2015 full-year results to the City.
As well as putting up its prices, Rightmove told analysts that it sees the estate agency industry as healthy, with potential for further membership growth.
Despite Friday’s astonishing results showing every measure up, shares in Rightmove fell back, after a broker said that agency branch members were down.
However, Rightmove said this was inaccurate.
The analysts were also told that Rightmove expects this year’s profit margin to remain at around 75%, due to cost growth in staff and technology, plus further investment in marketing.
At the analysts’ meeting, Rightmove was said by William Packer to have played down any idea of industry transformation by online agents.
Packer, of Exane BNP Paribas, reiterated his firm’s ‘outperform’ rating of Rightmove.
“Well, thanks for asking Packer old chap, the reason we think we can charge what we want is pretty simple really . After getting together and making their own portal which no-ones still heard of they’ve all come off our biggest competitor as well, a real shot in arm. It’s for these reasons that we just roll a dice now every 6 months and times that number by what we like “
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But…..OTM!
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Continue to dig in the back pocket and soon we will all be Rightmove Franchisees.
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No idea what all the fuss is about.
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Having extolled the virtues of Rightmove and applauded their ability to make a healthy profit, having just been advised of a TEN PER CENT hike on my rate, I’m having serious misgivings.
In pushing their luck just a bit too far they could now be in the process of killing the goose that lays the golden egg.
I, and I anticipate many more than ever, will not be taken for a mug indefinitely – it’s tough out there and getting tougher – if RM had any respect for it’s subscribers, they’d at least freeze rates.
I’m sorry members, OTM in it’s present form isn’t the answer – but in the face of RM’s greed, an effective revision of tactics and fresh trawl of agents across the board could bring a new surge of enrolment and mass exodus from RM.
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I felt the same way over a year ago and left them. Admittingly I have to work a bit harder with vendors as other Agents are quick to use this against me at valuations, however still gaining lots of instructions and selling them within three weeks anyway so clearly exposure on Zoopla is enough in this market. Feels great not seeing that direct debit on my statements and being told that I am due a price increase.
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