I was pondering the other day what on earth is happening at OnTheMarket given the fanfare around the CoStar purchase, but mere tumble-weed since.
Rumours initially circulated that CoStar would be throwing ‘£40m at marketing’ after a rebrand to their Homes.com brand. Instead, we continued to be treated to Chas and Dave ads for a few months and just the very occasional housing market led headline in this publication and others, with little else shouted about.
No rebrand. No marketing push. No innovation. And certainly no attempt to usurp the number two player. Perhaps they need a better PR agency?
The £100m price tag seems to have been money very poorly spent especially as OTM’s total trading losses now accumulate to over £54m and continued to the tune of over £12m in the latest available annual accounts. Revenue also declined 11% versus the year prior.
And what of the number two player? I broke the news on my Home Front podcast that Zoopla is entertaining an offer from some UK property industry heavyweights to the tune of £500m. This sounds like lots of money compared to the OTM price however you must remember that Zoopla has also been heavily loss making and was bought by Silver Lake in 2018 for £2.2bn. That’s quite a haircut.
There are clearly operational and marketing reasons for OTM and Zoopla to have struggled. Or rather the lack of marketing nous together with a complete absence of innovation or disruption.
Sitting at the back of the boat quietly whilst admiring the number one oarsman and basking in their reflected glory, turns out not to be much of a growth strategy.
But aside from this rather luke-warm approach to helping people sell and buy homes, all of the players in this space now have a big problem. This includes Rightmove, the so far unassailable portal that sees consistent profit and share price growth as it continues to monopolise search without, apparently, being a monopoly at all (says its lawyers).
The problem I am referring to may well be why CoStar has sat on its hands and why Silver Lake is willing to take a cold bath on what they paid for Zoopla. It’s quite possibly terminal and they now know it.
The kryptonite that I refer to is AI.
“Yeah, right” I hear you say. “We hear about AI all the time but it won’t stop the portals being dominant and stealing agents’ lunches still”.
I disagree.
Have you actually used Chat GPT to search for a property? I have. And whilst it’s still raw ish, it already delivers results in seconds that are much more inclusive and specific than going to Rightmove.
It’s also the favoured way to find information for younger generations and I’d wager that betting against something that future generations become obsessed by, is also not a great strategy.
I’m no AI expert. Far from it. But I do know that it is much more useful than just ‘cloning’ a few old school property CEOs or creating ‘fun’ action figures of Keir Starner.
Because if estate agency websites are up to date with their stock and those listings therein are described intelligently and in detail, AI will find them. Fast.
What will be the point of Rightmove, let alone Zoopla or the other one then?
In the immortal words of the underwhelming 1981 song by the aforementioned Charles and David, ‘Sling Your Hook’ might well turn out to be unintentionally very appropriate.
Russell Quirk is co-founder of ProperPR, the specialist property PR agency and a regular commentator and presenter in the media
