Some 200 traditional branches have quit Rightmove but hybrid/online agents have more than made up the slack.
That’s one of the findings to have emerged from a Rightmove briefing of analysts following results for last year announced on Friday morning.
At the briefing it was confirmed that around 200 physical agent branches left Rightmove in 2017.
The loss accounted for about 1% of the total number of Rightmove branches.
However, growth among hybrid agents more than filled the vacuum, analysts heard.
Despite concerns expressed by some analysts about the “consolidation potential” of new hybrid players like Purplebricks reducing the number of agents in the marketplace, Rightmove argued that it was in a good position to cope with structural change, and said it expected the sector to remain competitive.
However, it does not expect a growth in agency numbers this year.
Rightmove also told the analysts of the level of discount offered to large agents, which it said averaged 20-30%.
The analysts also heard that Rightmove does not anticipate any issues when the new data protection rules (GDPR) come in this May, as it does not sell different products across its customer base.
In the results, Rightmove said average revenue per advertiser (ARPA) was up 10% to £922 per month, with a record number of 20,427 customers – mainly agents.
Analyst Liberum Capital predicted that Rightmove could increase ARPA by another 9.2% this year, as it forecast 10.6% revenue growth for the year ahead.
In a broker’s note issued on Friday, Liberum’s Ian Whittaker and Annick Maas said Rightmove was an “excellent company” and that it would be “hard to dislodge it from its market leading position”.
They made a “buy” recommendation with a target price of 5000p.
Their view was echoed by analysts Jessica Pok and Malcolm Morgan at Peel Hunt.
Maintaining their “hold” recommendation, they said: “We do not believe there is a threat to Rightmove’s position in the market.”
Meanwhile, Rightmove said in its results that it enjoyed “significant free cashflow”, which is likely to explain the £140.4m of cash it returned to shareholders in 2017 through dividends and share buybacks.
Rightmove’s shares start today at 4,482p, having risen 4% on Friday on the back of its results. Its market capitalisation is now just under £4bn.
Alternate headline;
“British public not picky on living arrangements having spent barely 8 minutes browsing their happy”
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Alternate headline;
“Its like taking candy from a baby” admits RM spokesperson
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Do I really need another day of Don and Digital Daffy’s trolling and nastiness? No, but it’s important to put an agency perspective on this,.
I know I’m repeating what I said on Friday but about 1/4 of all the agents who list on Rightmove have registers that don’t support them viably listing on Rightmove. Some of them then duplicate the listings on Zoopla too. That’s just mad; “I am going out of business but until I do your home will be on Rightmove”. In a competitive fight for instruction that is something agents will use against their competition. “Yeah they advertise on Rightmove , but they will go out of business doing so. How they are hanging on goodness knows. Shame really they’re really nice people. I like them but their reliance on a web site to sell your home? we don’t bother with that we get on the phone and actively market your home. We’ll get a better price too!”
I don’t believe many agents or the analysts that say it would be hard to dislodge it from its market leading position objectively understand how vulnerable Rightmove is to change and why.
Anyone who’s listened to or read David and Goliath by Malcolm Gladwell will understand the underdog sometimes has a massive advantage over those they go up against. It turns out the medical condition that gave Goliath his size also gave him problems with his sight. That meant Goliath could only fight a battle at close quarters, on his terms where his size a gave him an advantage and his lack of vision wasn’t a problem.
Rightmove has the same issues, it’s bigger than it naturally should be and earns excessive profit. Because of the excessive profits it is short sighted; it won’t implement change. In close combat Rightmove easily beats Zoopla and OTM, they’re fighting the wrong fight; one that favour Rightmove.
Personally I think Rightmove is vulnerable to losing 25% of is customer base because iit, their service supplier is going to put them out of business.
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Robert,
How on earth do you ever get any work done, you spend all day on here telling everyone how to put the industry straight and it just seems like you cut and paste the same old waffle to make yourself feel important.
zzzzz
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I get up at before you and finish work after you, I work 7 days a week. I don’t need to feel important.
I am not telling anyone to do anything, I am simply offering an alternative viewpoint.
Let’s start of with; Do you own an agency? Do you pay the office expenses, NI wages and the portal fees? If you do what are you doing that 5000 agents aren’t that means you can pay excessive profits to Rightmove?
As for spending all day on here I don’t. Friday I had to Cyberduck and Dom were trying their best to troll me and supress me posting, it’s a form of cyber bullying I won’t walk away from.
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Somebody’s worried 😉
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Robert,
I totally agree with your David and Goliath analogy, it really hits the spot !! (apologies for the pun)
Maybe I should look out my slingshot just in case. But don’t really think I’ll need it.
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With Rightmove it is a classic FOMO with most agents (fear of missing out) Some that are exposed to new homes will have their developers pushing them to advertise on RMV or else. The trouble is the developers are on the site are milking it and will marginalise the agents that support the portal made it viable in the first place. I have attended presentations where RMV is put forward as a truly world class investment class business, no other business in a sector can claim a 70-75% roce consistently! Look at your bottom lines agents..how close do you get!? Agents own the goose that lays the egg..stock! The public will go where the properties are, so obvious, but there is a lot of sleep walking going on. The easy markets have distracted everyone and made the call centre businesses cocky, but now the real test is coming…not all of those will survive and when the first larger ones crash, the investors will soon run for cover.
The truth is RMV is at risk, but until revenues get squeezed they will do nothing, and when it does, the squeeze will catch up with them and momentum will take their price down and we will see a portal version of IBM or Blockbuster/Netflix (some will need to read their history books for what happened with these businesses). The trouble is the businesses feeding them will suffer, and there will be victims and RMV will outlive them. Countrywide and no doubt many small independents are existing through living off rations, but how long will you survive without cash flow and enduring profits.
RMV just keep milking the agents, they have recognised that Zoopla has been clever with their recent acquisitions which help them monetise data. OTM was a chance to control costs through legitimate competition but has been fumbled and we have seen again that herding agents is like herding cats. Even the corporates could have thrown their weight around, but failed and by not having a proper big vision from big data, have been hammered (Countrywide and others)
So where does this leave us. The data provided by some highlights the problem, portal churning and don’t forget the number of hits that can be attributed to agents looking at each others stock to tout! Some will deny it, but I have seen screenscraping carried out on an incredible scale. Therefore how many true, bona fide unique visitors are there!? This will apply mainly to big towns and cities I would guess, but I hope you get the point….the user data is not as clean as agents and the portals will lead you to believe and you are paying for it. Part of this I believe is what Robert has identified with his system. Agents, you re supposed to be negotiators…negotiate or go out of business!
P.S. if there is any doubt about the fear that RMV have in the future, look at how their report highlights the growth of Commercial listings!! QED
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Robert
whilst i don’t disagree with you I think you are wrong on the point of buyers wanting to register with agents – why should they when they can have the convenience of registering with a site that updates them about most or all agents’ instructions?
The first Agent in an area to break the cycle will be the first to go out of business, and we all know agents cannot, do not and will not collaborate, therefore they will not collectively leave RM.
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I believe agents could work together, if there was a perception of mutual benefit. There still has to be competition of course, but I don’t have a problem with that, and still have respect for all the independents I compete with.
There may come a point where agents need to work together and collaborate to consolidate costs, and reduce overheads.
Imagine if five agents in an area shared their marketing costs for instance, and shared the leads generated….this could be done with Collective Marketing!!!
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£700 Rightmove profit per branch per month is too much for nearly 5000 businesses to be paying, it is unsustainable for agents who are funding that from their pocket or their friends and family’s pockets
Serious buyers will find their next home whereever you attempt to bury it. The bit that sets agents out from the internet listing rep is that they sort out serious buyers from people who look at internet websites.
The traffic to websites has gone up, the number of properties sold has gone done. Rightmove are telling you the one thing you think you are paying for is less efficient than it was, it doesn’t really work.
If agent’s think it is their duty to go hungry or out of business because it is what buyers want of course they have a right to go hungry or out of business, I can’t stop them but they need to realise 50 applicants=10 viewings=1 sale is something tangible they can control. xxxx million hits is ????? applicants is ?????? viewings is ? sales isn’t.
No-one should kid themselves they are on Rightmove to sell house, Rightmove doesn’t do that, Rightmove introduces applicants to an agent they might not of heard of. If an agent is doing their job properly they should not be delegating the job of selling property to a website.
Rightmove is an introduction and nothing more.
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J1 – you state
“…and we all know agents cannot, do not and will not collaborate, therefore they will not collectively leave RM.”
Of course it may have escaped your notice at the time (but it was covered in most of the property news…), but in January 2015, a figure in excess of 5500 Agency branches started advertising their clients’ homes for sale on OnTheMarket.com.
For a high proportion of those, that meant removing their listings from one of the two most recognised portals – and of that number, a not insignificant chunk elected to leave Rightmove.
Now that event doesn’t exactly blow your statement to smithereens – but you’ve got to acknowledge that it rocked the good ship Rightmove to a degree.
And if it was done once – then surely it can be done again.
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It rocked Zoopla, who started funding law suits vs OnTheMarket.com, a sign that yes, a multi-million pound portal can be worried.
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Hi Pee Bee
I did think about that before posting but what really happened is that they signed up for OTM and then failed as a collective to push and promote it – window stickers soon disappeared and I bet your bottom dollar that business owners did not push it with their valuers and negotiators.
So the intended collaboration never happened. Scepticism will prevent another collaboration gaining traction I am afraid. Springett and co took a perfect opportunity and ballsed it up. Except IS probably has an Aston Martin now.
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Hi J1. Thank you for your response.
“…but what really happened is that they signed up for OTM and then failed as a collective to push and promote it.”
I’m not so quick to push that degree of blame on the business owners. I can’t speak for the whole country but where I am ‘oop North there was a fairly concerted effort to promote OTM as the ‘go to’ portal. For a while, anyways. And by some a lot more than others.
“…I bet your bottom dollar that business owners did not push it with their valuers and negotiators.”
I’ll certainly give you a point there – and those people were the key to any real chance of success of the exercise.
“Scepticism will prevent another collaboration gaining traction I am afraid.”
It will certainly make it difficult, as it undoubtedly has with the AM/OTM effort.
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Alternate headline;
“Agents opposed to the List & leave online listers continue to believe they need to pay through the nose to list”
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On the issue of how much an agent spends with RM
My rep told me that browsers of the site do not and will not interrupt their search in order to click on the agents banners
Therefore the optimiser and other additional products are a waster of money in RM’s own view
If all agents went to the basic product this would help them to save money in the first instance
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So presumably this means that extra money would be better spent on something else to generate new business
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Yes, for sure.
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So what is the solution. I am a single office, receiving great customer feedback, selling 90% of stock, but my killer cost is RM (and Zoopla based on the poor return on cost). So single office, with banner advert and rental, paying RM over £1700 per month but cannot survive without it !!!. So…solution that a, works, b, a customer will agree has benefit to THEM, c, has a sensible cost…buyer waiting!
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Ditch Rightmove add ons and just pay the basic rate.
Spend your marketing budget on becoming the local agent that people cannot afford not to to talk to if they are thinking of selling.
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It is interesting seeing how different agents in different areas work and I wonder if a number of people working in agents offices have either lost the art or ability to sell or , joining the industry post computers, have never learnt or been taught how to sell.
They think listing the property on one or more portals or on their company website is all they have to do to sell the property. Depending on the market conditions they may or may not be lucky and a buyer finds the property and then them.This obviously works for the benefit of the portals and the same agents lists the same property on two , if not three, portals. When the market shifts against vendors and it really is a hard market that is the time when the savvy agents continue to use their buyers lists and reap the rewards while possibly deciding to use only one of the portals.
One day a purchaser will become a vendor and will remember a good( and bad) agent and therefore who to consider choosing.Lazy agents look out.
Computers and portals are a superb selling tool to assist agents but often overlooked is the personal input and difference a good agent makes.
Certainly the good agents still keep in touch by email and phone
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Agree fully. Many of our deals are put together through just talking to buyers and properly understanding their needs. It’s the vendors that are just blinded by RM and it’s importance. So many quote “you are on RM arnt you” total game changer if your not and I gaurantee our competition would have a field day if were came away. To me, RM does not generate vals (although the good people at MK head office would inform me otherwise), but it certainly would lose them if you dont have it.
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I have not had one val off RM in the last year and RM told me not to expect ANY!!!!!!
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Our package is set to increase by at least 18.8%- ouch. However, the money we spend on RM & ZPG, delivers around a x10 ROI. WE don’t generate any Landlord/Vendor leads from either site and that’s fine, we have accepted that. we Invest elsewhere to generate those. Just wish I could hit my clients with fee increases like this though, for offering the same service/package- wouldn’t that be nice.
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RM just reaching into your pocket and taking your money then – that is OUCH !!!!!
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Rightmove do not have customers, they hold hostages. Every year they ask for more and we pay up, the alternative scares us to death. Not sure how much longer this can be sustained……..
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Assuming they can see the change coming beyond the end of their short sighted corporate nose, will it ever occur to Rightmove they should think of major changes with disrupters around the corner and try to……
Profit with their customers,not just from them ? The day will come when they will need friends.
Or is it like expecting the sun to rise in the west?
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RM reports 125 million hits a month
Z reports 58 million hits in January (new record for them)
As near as doesn’t make a difference it has been reported that a 1/3 of consumers only use RM, a 1/3 only use Z and a 1/3 look at both. The report did not include OTM.
But between the three of RM, Z & OTM – 1/3 of consumers are only seeing RM properties, 1/3 of consumers are only seeing Z properties and a remaining lucky 1/3 get to see either both set of properties either exclusively on RM or Z and then annoyingly twice on both.
However, none of those thirds of consumers will be seeing any of the new & exclusive properties on OTM that even fewer people get to exclusively enjoy and that’s if agents still adhere to the OTM “First to see new and exclusive” marketing.
Whichever way you carve it up, despite the multi million advertising budgets of RM, Z & OTM (that should get a comment or two at least) agents are getting shafted, consumers have had to be accepting of browsing multiple platforms, but are likely to be missing out on property somewhere in the midst of the shenanigans of these three.
1 billion RM minutes divided by 125 million hits is an average of 8 minutes per visitor. Which is just enough time to see some photos, email RM / Z / OTM your inside leg measurements and then wait for the agent to call you back or Google the selling agent and call them direct.
All the more reason for consumers to register with their local agents where proceed-able buyers, I would hope and expect, get to hear about property before it even makes it to any of the portals.
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I just don’t get it! All the Rightmove Whinging drives me nuts.
Rightmove is not expensive, it is a lot of money but its not expensive..
We spend about £5000 nett per month on Rightmove
We probably over the month advertise lets say 125 homes
Thats £5000 / 125 = £40 per month per home.
Now lets look at the TIME and volume of exposure each home gets for its £40 per month.
My average property views per day in the last 30 days was 123.9
So that 30x 123.9 at lets say 30 secs TIME ON PAGE per advert on average (conservative)
That’s 31 HOURS of targeted coverage for a single product to potential buyers of said product for £40
If you embrace the capability of the platforms with fantastic photos, Floor plans and Video Tours your going to reduce time wasters and improve the quality of your potential buyers.
This is turn will make you a more efficient agent and thus save you money, trust me viewings are expensive lets make them count.
Autotrader charges a similar amount to the above per month and I would argue is far less effective at BRAND AWARENESS and helping us win valuations which Rightmove also does.
On top of this you have a fantastic valuation aid in the best price guide tool and the property performance emails help keep your customers happy. (If you can be bothered to use them and follow up)
Finally, there is the INTEL end of things which while can become a time sink but if used correctly is one of the BIGGEST sources of business there is.
Honestly Guys, think back to the property papers we were paying more for LESS and it was less useful for our customers.
Is it OBSCENE that they have 70% + Margin, yes of course it is.
Is Rightmove worth anything with out our stock, of course it isn’t.
But lets face it all OTM has done is now create a 3RD portal we will probably all need to be on in time to level the playing field and a further drain on the bottom line.
Rightmove / Zoopla like Google is here to stay, learn to embrace it and thrive or fight it and in time die.
Well at least until Google / Facebook or Amazon give them some real competition (Now there is a scary thought)
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Shall we break this down a bit, it sounds a bit too sales pitch
You had 464625 views of 125 properties, you spent £5000 doing it, £3800 was profit to Rightmove.
With such a close eye on numbers how much business did you do? Of the 125 properties how many are now sold and completed money in the bank.
What is the £5000? Just sales or sales and lettings. How many offices? What is you average sale price what is you average commission?
The bit about the papers doesn’t make sense, print advertising has a massive and expensive barrier to entry, the cost of a printing press. It was expensive because it had to be, the cost was justified, 76% profit margin is exploitative greed.
Following your theory through you wouldn’t sell or let any less if you were charged £1200 instead of £5000 so I can’t see why you are so keen to give so much of your spare profit to a business who is wholly reliant on your #small data.
You pay Rightmove to make your telephone ring, ideally you want you phone to ring 125 times, do 125 viewing and sell or let 125 properties.
464625 is a meaningless number, its like cars on a motorway passing a service station, the numbers that count are how many stopped? Of which how many drivers just used the loo, how many bought something?
I haven’t followed the logic of embracing the capabilities of the platform; those capabilities aren’t exclusive to expensive portals, in fact in order to create the myth you are keen to perpetuate of page views and time on site is a good thing, Rightmove actually make it harder and more frustrating than it should be to access those capabilities.
Farming technology didn’t halt when someone invented the steam engine and threshing machine, someone invented a tractor, someone invented a combine harvester. Technology moves on, technology makes things cheaper. You stick with your Foden and your threshing machine and let the little guys move on to tech they can afford and justify.
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If anyone of you moaning twits had any guts you would just drop RM. Don’t forget some landlords won’t accept Benefit tenants, you could end up being one! but at least you won’t have to pay letting fees. Ha..
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