Rightmove will need to increase revenue with its “long tail of smaller agents” every year until 2022, a new report has said.
It adds that this is “very achievable”.
Rightmove emerges as the top pick in the analyst’s report into global property portals.
The study, by William Packer of Exane BNP Paribas, gives Rightmove an ‘outperform’ rating and sets a target price for its shares at 560p. Yesterday, the shares closed at 487p.
Exane says that it expects Rightmove to sustain its dominant share of traffic, underpinning pricing power as a lead generator and being the marketing platform required by vendors.
The report rates Australia as the best property portal market in terms of dominance, products, and services for vendors, followed by the UK. The two have respective scores of 129 and 106.
Trailing are the US, Germany and France with scores of 78, 61 and 57.
The Germany and French markets “suffer” from private listings, while in America there are third party vendor lead-generation services.
Packer’s report also delves into the rise of online agents, saying that this is not a UK-specific dynamic but a challenge across the globe.
“We in fact argue that the UK’s low fee levels, listing exclusivity and low private listings share actually limit the long-term risk to traditional agents in the UK from online players, while the risks in Germany and France are under-estimated,” the report says.
Nevertheless market share of online agents is higher in the UK, at around 7% according to 2017 transactions, than elsewhere.
In France market share is about 5%, and in Germany, Australia and the USA about 1%.
The report is also interesting about the different traditional property markets.
In the UK, as in Australia, there are low levels of private sales and lettings. However in the UK, there are low legal requirements for agents; low commissions; and a comparatively high online agent share.
There is also relatively high home ownership, at 63%, compared with Germany at 53%.
An estimated 99% of all transactions in both Australia and the UK are via agents (95% in America).
But in France and Germany, 40% and 42% respectively of sales are private.
Packer does identify the rise of online agents as a risk to the long-term growth of portals across the globe. He says that at sufficient scale, there would be fees deflation – making it harder for portals to drive advertising growth.
There could also be branch closures, which could impact portals. A large online agent could also limit portal pricing power and demand big discounting.
Packer’s report specifically picks out Purplebricks and its implications for Rightmove.
It expects Purplebricks and Rightmove to maintain their current relationship for the foreseeable future.
The report predicts that in the UK, traditional agents’ market share will fall to 88%, with Purplebricks having 8% of the market and other online agents 4%.
It also predicts that in the UK, overall fees will stabilise at around 1%, as the pricing gap with online agents closes.
High street agents will continue to reduce staff headcount, the report predicts, and branch numbers will fall, while weaker agents will go bankrupt.
The report forecasts a 6% drop in the number of agents by 2022, and a 13% fall in the traditional commission pool.
Despite this, the report forecasts that “Rightmove will continue to drive healthy revenue growth amongst its traditional agency customer base despite challenging operating trends.
“We forecast Rightmove to rise from c25% of current marketing spend towards c40% by 2022.”
Branch closures are on the horizon for many.
It will be agents who have been made redundant who then go and set their own “online model” – further lining the shareholders pockets.
Like it or Not, Agents need to get behind OTM to keep Z and RM in check.
£12,000 pa to RM form a branch or sole trader is an absolute joke.
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We are a single office, family partnership and pay more than £12,000 PA for the basic package sales and lettings….
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it amazes me that if i did topple rightmove with an organised industry STRIKE i stand to gain a few £. The big players who stand to lose millions just ignore what is happening..including onthe market.
WAKE UP AND SAVE YOUR INDUSTRY.
NO PAYANYWAY AGENTS ON RIGHTMOVE
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Time to leave rightmove. Agents in Newcastle did it a few years ago. Chat to other agents and let’s leave together.
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Except it seems most of them returned quite quickly.
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Ask yourselves…
Where would you look if you wanted to find a property out of your area?
most probably on Rightmove. simple
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With friends in the business I’m aware of what agents used and still do spend in the local papers each year as that’s where the public spent most of their time, now that people spend most of their time online would it not make more sense to use your marketing budget as effectively as possible? I’ll wait for the anti rightmove mob to jump on here and shout me down ‘it’s just not fair’ boo hoo, welcome to the real world. Still find it amazing how much time certain users spend on here complaining about the world, glad you’r not working for me.
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Firstly if anyone still advertises in the local “property guide” i’d be amazed. With regard to Rightmove its finding that balance, spend what you think you need to but dont waste your money. Take a step back and look hard, what exactly to the public want to see. Dont be taken in by the Rightmove spin on what is important and “what your competitors are doing. In my opinion anything beyond the basic package and perhaps paying for your logo is a complete waste of money.
If other news, the report is fairly positive about the call centre brigade, market share not quite as large as Brucey would like people to think.
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I agree, Rightmove doesn’t do anything special over other portals or even an agents own website. They just have very good brand awareness. Spend as little as you can on it, convert the leads effectively and drive as much traffic to your own website through advertising and social media as possible and you won’t lose out.
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Good morning Seller0169,
Assuming that you have ”friends” in the industry (by implication not being an industry operator yourself), you do appear to have a very strong pro-Rightmove stance (as well as a purported thorough understanding of how agents spend their marketing budgets) and when it comes to Rightmove related topics…is supporting Rightmove a hobby?
Whilst you suggest that you ”Still find it amazing how much time certain users spend on here complaining about the world, glad you’r not working for me.” , I’ll take this opportunity to dispel this statement by confirming that the majority of users/readers/posters (bar those who post with ulterior motives) on this forum are deeply passionate about their industry and industry related topics (indeed it is their/our livelihood- mortgages are paid, children are educated, people progress/learn, some support charitable causes and so on…).
Noting a comment you left in response to another poster several days ago (allow me to refresh your memory) ”what a waste of time posting a comment that would be heard in a playground”… it seems that you may have spent the last few days in the same playground?! ”Boohoo”/”shout me down”/”its just not fair”/”welcome to the real world”…slightly disingenuous, is it not?
Forgive me if I’m wrong, but you do have the distinct whiff of a Rightmove employee…
Have a lovely day
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‘Still find it amazing how much time certain users spend on here complaining about the world, glad you’r not working for me’.
Hmm, so this individual rarely posts and clearly spends a lot of time lurking here so that they can qualify writing the above statement. Yep, the whiff of a RM rep.
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Well, if any readers were unsure/ required confirmation in respect of Rightmove’s obnoxious antipathy towards its clients, the comment that I replied to above is about as stark an illustration as one could hope for…
I am in no doubt that many posters/readers are thinking (to borrow a phrase) ”glad you’r[e] not working for me…”
If I may be so bold as to offer some advice to Rightmove’s media team?… I think you need to review who you allow to post on public forums, as the current ‘crop’ seem to be doing more harm than good (contrary to RM’s social media strategy, I am sure).
I don’t work for anyone (other than my various teams), but happy to offer some media strategy consulting services (FYI- I’ve just increased my hourly rate by 20%…but that’s OK right?)
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Oh please. Accusing anyone who feels differently than most posters about RM of being a RM rep is a bit desperate. Believe it or not, there are a lot of agents who quite like RM and consider it a crucial part of their business. They just don’t usually post here.
As for me, I think RM is greedy, but they are a PLC whose sole purpose is to generate growth and profit for shareholders, and as much as I hate to admit it, they do a damn good job at it. Shame I’m on the other end of the deal. Can anyone here honestly say that if they ran RM they’d do things differently? Hate to say it but I don’t think I can.
I’ll also agree that the amount of moaning on this platform gets tiresome at times. If you hate RM, get off it. If enough agents do that, RM might have to rethink their pricing strategy.
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Hi Maxwell73,
Thanks for taking the time to respond to this thread.
Interestingly, I wouldn’t normally refer back to a historic thread, but a ‘hunch’ told me that there would be a response from another poster this morning (similar to an article published in PIE several days ago), low and behold…there is!
It would be worthwhile pointing out that this assessment is based on more than a ‘hunch’ (it would be very foolish indeed, to make such a comment without confirmatory occurrences going significantly beyond mere ”coincidence”) and both Seller0169 and my firm’s RM account manager are seemingly in close contact (confirmed by an almost immediate [several hours after posting a particular comment on a previous RM related article] meeting cancellation-with no explanation (!) as well as an uncharacteristically and rather rude/curt response to an email, from my firm’s RM account manager).
Additionally, I also can’t see any reference (in this particular sub-thread) to anyone ”hating” Rightmove.
You may be arguing a point that no one has raised(?).
Have a successful day
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Well, I won’t argue whether the poster in question is your RM rep or not, though it would be a remarkable coincidence if he/she is, seeing as you’re both anonymous on PIE.
As for some people ‘hating’ Rightmove, I think it’s quite clear what I mean, and it would be disingenuous to pretend that this sentiment is not prevalent, even in this sub-thread, with comments like “distinct whiff of a Rightmove employee”, and “Rightmove’s obnoxious antipathy”. Perhaps the word ‘resentment’ might be a better choice than ‘hate’, though. And this sentiment does impact the context of the dialogue.
We complain a lot about PB and the likes, as we do about RM; but how effective is this? My point is that it’s easy to come here and slag companies and people off, but it’s the decision we make when we’re not here that most count.
Having said all this, I do think that Seller0169’s comment and tone was unnecessarily antagonistic!
You too, have a great day.
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Hi Maxwell73,
Apologies if I was unclear, I have not suggested that the poster is my firm’s RM rep, I have suggested that he/she is in contact with my firm’s account manager (indeed, one of my previous posts stated some information which would have made it quite clear who I am, to anyone who cared to research within RM’s organisation- which they dutifully, and somewhat predictably…did) therefore, it is logical that the poster would have some involvement in RM’s operations (I’m sure you’ll agree that it would be very strange indeed, to have passed information to a Rightmove employee not being one, one’s self).
Nevertheless, the content posted, seemingly changed (with incredible/”coincidental” speed) our RM account managers’ approach in correspondence to me.
I wholeheartedly stand by my comments and wish to make it clear that I have not ”slagged” [people and/or companies] off”- what I am critical of is the manner in which certain companies operate, with impunity and arrogance… It is certainly in this readership’s interests to expose such impunity as by doing so, perhaps these companies may rethink their approach- to the overall benefit of ALL stakeholders.
Furthermore, I would not use the word ”resentment” (this would imply some degree of bitterness- this is not in my nature) to describe my sentiment toward the subject matter – a more apt description would be that of distaste at the ”obnoxious antipathy” of RM’s pricing strategy and approach.
This is an industry forum, where ideas (and not always popular ones) are shared, and in doing so perhaps we can all learn a little more than we knew yesterday.
I hope Seller0169 has been ‘posted’ (excuse the pun), elsewhere on RM’s team 😉
Again, have a successful day
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Completely agree, If an independent agent invested half as much budget on their own marketing online, rather than using RM or Z they would self generate their own leads and reap the rewards. We work with lots of independent agents who are now having great success independently online… Take control again.
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We all have choices and I’m happy that OTM is now matching Rm for leads. Never thought that would happen but gives a one branch independent like me a good choice.
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Let’s do it!
We need, as an industry, to have the balls to fight effectively. We have been exploited long enough to allow this to continue. We should be offended at RM’s arrogance to believe we shall stay as subscribers due to fear of our local competitors’ perceived advantage.
In reality, the competing portals make RM weaker than ever, and by mass emigration, we shall strengthen them further and regain control of our marketing budgets and choices.
Let your competitors be the losers and tell your clients that RM is no longer essential, just an expensive choice that through its pricing is no longer justifiable.
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Do you still advertise on Rightmove Scruffy?
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Couldn’t agree more. How do we do it?
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Time to leave rightmove. Agents in Newcastle did it a few years ago. Chat to other agents and let’s leave together.
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10 years ago I was spending £500 a week with newspapers, now I spend nothing on papers and £250 a week on Rightmove and £100 a week on Zoopla (per branch). Rightmove is arrogant but it’s cost effective, if you put in inflation with the newspapers I’d probably be spending £750 a week today. I moved away from all the nonsense with RM and am nowon the essential package. I’m no RM fan that said I still feel it’s fair value for money. In my opinion to many agents get suckered in on the extras and how they will help grow market share when in reality that’s just nonsense!
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Shhh. There is no place for balanced, factual posts. We need to shout about naughty RM and pretend we are all going to leave, then do nothing.
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hertsagent13
Out of interest how much do you spend per week promoting your brand to a local audience? How do local people in Hertfordshire (I guess from your handle that’s where you are based) find out about your services if they are looking to sell their house.
Rightmove (and other portals) very clearly helps to generate enquiries for your available stock but how do you generate enquiries to be invited on valuations? The two things are very different forms of marketing.
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Totally agree. We promote via leaflets, about 25,000 a month, Facebook which is content led rather than simply listings, staff videos, we ask for referrals from existing clients, old clients, old school agency gets us listings! I suspect we spend £500 to £1000 a week on local promotion.
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Interesting. Thanks hertsagents13
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By my calculations, you’re spending considerably more on marketing your agency today than you were 10 years ago. Am I right?
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I deliverd leaflets 10 years ago, Facebook is cheap to use so I don’t think so. Perhaps the confusion here is that agents view Rightmove as a platform to win you business and in my view it’s not. I don’t receive valuations from Rightmove or Zoopla it’s the minimum expectation from a vendor. In fairness RM unshackles us from our previous geographical constraints!
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Zoopla and OTM
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Print, delivery etc etc cost money.
Running a website doesn’t involve printing and distribution so the actual running costs are a fraction of the cost.
95% of RM marketing is done by the agents.
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You beat me to it Property Poke In The Eye its what you said and;
Agents pay Rightmove to advertise how good Rightmove is to the public.
Agents pay Rightmove to put sales reps in cars and on the phones so they can tell agents how good Rightmove is.
Agents pay Rightmove, (not forgetting ZPG and OTM) to pimp their locally gathered market intel around, which assembles the ability of non locally experienced property people to gather just enough local market intel to nip at the heels of those who supplied the data in the first place.
Perpetual motion is impossible, but this is very close. Until the data finds a new place to call home.
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Why spend all that money on Zoopla ? I bet you don’t get many calls? Does anybody get any calls these days?
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Their greed will eventually finish them off.
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There has been the first major 2 agent consolidation into 1 in my city. 2 Rightmove fees become 1. Where does fee growth come from then..?
I expect we will see more consolidations nationally. Where does the fee growth come from..?
I think that surviving agencies should expect attempts at steep increases asked for by R.
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Rightmoves next TV advert,
Spice girls song playing “When 2 become 1”
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Recently, I questioned the performance of some of our RM products only to be told they “aren’t that effective” and that I should try some different ones.
I’ve cancelled all the products I have with them and used the money saved to give Zoopla another chance.
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Why spend all that money on Zoopla ? I bet you don’t get many calls? Does anybody get any calls these days?
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We don’t use Rightmove or Zoopla and regularly find more, better quality tenants than our competitors who use Rightmove and Zoopla as their lifeblood.
By using traditional tenant find strategies, our properties don’t compete with hundreds of others.
We let properties quicker and we’re able to keep our.costs low. All of these agents who are jumping ship after RM price hikes are smart. Their model is unsustainable as a portal, I think they realise this which is why they’re focusing more and more on data.
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I think you make an important point about an over-reliance in R.
Get you an agent who doesn’t just stick it on the portals.
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“Their model is unsustainable as a portal, I think they realise this which is why they’re focusing more and more on data.”
Surely you mean their model is unsustainable – without the portal clients they will have no data to sell !
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Harry your website has 0 properties for sale and 2 to let.
Not many agents could survive on that.
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right I’m fed up with RM bulling us little folk. I have worked out my mobile phone app which doesn’t require any on line marketing just like uber but for houses.
Now anyone got a couple of mil for R & D ?
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Already been done ….. A certain regular poster has perfected it. Looking forward to launch!
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SIMPLE.
Stop complaining about onthemarket – this is the only way to topple rightmove.
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