Two new analysts’ reports have come up with numbers following the launch of OnTheMarket.
Broker Canaccord Genuity has cut its forecasts for both Zoopla and Rightmove, but played down the impact of OTM.
According to Canaccord, the estimated number of estate agent offices using Rightmove since January 26 has fallen by 1,000 (or 6%), while those using Zoopla has dropped 4,000 (18%).
However, highlighting a “poor user experience” on the new OTM, the broker expects “the majority of agents which remain on both Rightmove and Zoopla to increase their advertising spend”.
The second report estimates that Zoopla Property Group’s inventory level is now 70% of Rightmove’s.
The report by William Packer, of Exane BNP Paribas, says that in November it estimated that Zoopla’s inventory was 95% of Rightmove’s.
The analyst has also increased its estimate of how many agents’ offices have churned to OnTheMarket from Rightmove and Zoopla combined.
It had previously estimated 3,100, with a 70:30 split, with Zoopla taking the bigger hit. Exane now expects a total churn this year of 3,800 with a split of 85:15.
However, the report says it expects Zoopla’s traffic to remain sticky “and thus far it is healthy”.
It continues: “Whether Agents’ Mutual members return to Zoopla (and how quickly) are key questions for the longer-term ZPG investment case.
“While we continue to expect ZPG to retain its number 2 position in the market, we expect AM to retain a significant share of inventory into 2016/17 (despite initial weak audience trends at OntheMarket), dragging on revenue and profit growth at Zoopla and a key element of our ‘underperform’ rating.
“We continue to expect AM to struggle to build longer-term audience despite a solid website (albeit missing some functionality).”
Elsewhere in the report, the analyst notes: “We expect Agents’ Mutual to struggle to drive growth in audience and membership longer term due to its limited inventory and marketing firepower.
“However, its success in achieving c4k estate agency branch members at launch has surprised many doubters.”
The report reiterates its ‘outperform’ rating for Rightmove, and an ‘underperform’ rating for Zoopls.
In its updated advice to investors, Exane says: “Rightmove remains a top pick, avoid Zoopla.”
The full Exane report, which also contains regional analysis of inventory, is here
Comments (8)
I have been a fly on the wall for the past few months just reading the endless posts regarding ZPG, RM and AM and I have sat curiosly wondering why the founder members of AM didn”t drop both ZPG and RM, I believe they are some of the biggest agents in the country, an obvious exeption would be Countrywide, which have their own portal anyway (haven’t seen an advert as yet for it). Surely if the market share from both ZPG and RM had dropped significantly around the launch of AM’s website OnTheMarket.com, any vsitors may have noticed that there are exclusive listings and continued to visit the site in higher drones than they are currently. Just an observation, maybe some agents will take this into consideration, especially the ones that are more than confident in their own brand awareness and Estate/Letting Agency expertise.
Not a great deal of a surprise there. Brokers are only meant to look into the short term – hence sell Z and buy Wrongmove. OTM is only doing as well as expected but has two years before it will really be a challenger, unless Z collapses sooner. Nice to see the bad sentiment in Wrongmove’s direction – again not really a surprise. 70/30, now 85/15 looks about right. At an agents meeting last night I couldn’t find one agent on Z. There does seem to be a great deal of support for OTM but still lots of fence sitting. WM is just hated but currently essential.
I just hope AM are keeping an eye on those that are returning to ZPL and RM and policing their one other portal rule!
finally a city analyst get it correct. I think the estimate is spot on. They are surprised OTM attracted 4000 members because the city could not appreciate the bad sentiment that nearly every agents feels towards Zoopla and Rightmove.
However It no real surprise that more agents dropped Zoopla.It’s by far the lesser site that gives bad information to consumers and its member gents understand that.
It provides Misleading and inaccurate tools solely aimed at driving it’s traffic up and gain greater consumer retention. However what the public don’t see its that its highly misleading. It includes valuations that always inaccurate, tools showing a agents average asking price ? How many properties an agent sells In a specific price range.
it was the first portal to allow online agents thus RM followed. Agents don’t like RM price Rises and its smoke and mirrors fee policy. but it does provide a clearer and more accurate consumer experience and better quality leads that ultimately agents will pay more for.
Web sites are nothing more than an electronic 24/7 newspaper advertising to customers. So why would a hard working professional high street estate agent want to support a company that openly encourages web only anti estate agent portals to damage not only their professionalism but openly are anti-estate agent, openly want to put you out of business, undercuts fees with a poor customer service and is a THREAT to your existence. And they are bleeding you dry financially. Try telling your wife and kids why you have creditors knocking on your door and you can’t even afford a Christmas present because you rolled over and eventually went bankrupt. Has the light come on yet?
Thats a free market for you! typical agent!
Stupid comment. It is a free market to the consumer who is unaffected. It is businesses are perfectly entitled to protect themselves or they would go out of business. I suspect you work for a living, think about it if your employer made you redundant.
To the staff: just want to say that after my inadvertant rant last week about the biased presentation of OTM-related articles on this site, there appears to be a significant change in tone (advertant or not I am not quite sure). In my view all three portal stories are far more even in their presentation, making them a much more enjoyable and informative read. Really want to applaud you for your efforts–keep up the good work.