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Stick or Twist?
For the last few years the
options have been quite
simple – Rightmove or
Zoopla, or both?
Now Agents’ Mutual seeks to break
what they call this duopoly accusing
the incumbents of charging agents
too much and worse, they say,
allowing new estate agency models
to be born and to thrive in the future.
We’ve interviewed the CEOs of all
three portals and present their
respective viewpoints with the aim
of assisting agents to make the right
decision come portal judgement day.
To find out more about the Property Academy and sign up for
our free four-i weekly newsletter please visit propertyacademy.co.uk
Call us on 01372 370 847
THE PORTAL LEADERS’ DEBATE
We started by
putting the issue
of rising costs, to
CEO of Rightmove.
You have to prove your value, you
are always under scrutiny to prove
your value and we are confident
we will stand up to that test.
We have a proven track record -
we have by far the largest audience
- 10 million unique visitors a
month who are coming back eight
times a month and consuming
1.3 billion pages.
Peter Knight [left] interviews Ian Springett, CEO of Agents’ Mutual
What we offer is great value for
money and most of our growth
comes from agents choosing to
spend more on our products.
Agents’ Mutual has stated that their intention is to disrupt the portal market. Supported
by several high profile agents, including Savills and Knight Frank, they report to now have
2,300 offices prepared to ditch one of the big two, Rightmove or Zoopla Property Group,
Ian Springett, CEO of Agents’ Mutual is no stranger to this market. He founded and sold
Prime Location, ironically the first portal to charge agents, and states the purpose for
launching another portal as follows: “It is not in the interests of agents for the Rightmove,
Zoopla duopoly to continue, because there is tremendous upward cost pressure and
because it is turning the agents into a commodity.”
That’s where the majority of growth
came from over the last 3-4 years
and I see that continuing to be
the case - customers choosing
the products and packages which
enable them to differentiate
themselves and get the
The products have to deliver and
the customers wouldn’t choose
them if they didn’t deliver value.
Are these claims true? Is there upward cost pressure on agents’ overall marketing budget
or are the portals actually adding value? Are the portals responsible for commoditising
agents or is this an inevitability of the Internet age? Is estate agency just evolving as other
retailers and service providers have had to?
Whilst Agents’ Mutual has already captured the attention of many agents, how will they
similarly appeal to the consumer, how long will it take and how much will it cost?
You are always under scrutiny
to prove your value and we
are confident we will stand
up to that test.
Nick McKittrick, CEO of Rightmove
THE PORTAL LEADERS’ DEBATE
We also put the issue
of rising costs, to
Alex Chesterman, CEO of
Zoopla Property Group.
If you think about what an agent
spends today to advertise a listing,
if they’re on both us and Rightmove
they’re spending around fifty
quid on average for the life of the
listing to advertise to an enormous
audience, plus they get all the
associated data and measurability
of their return on investment.
I think the price issue really
doesn’t have any merit to it. Yes,
prices have gone up, but they’ve
gone from a zero base ten years
ago to what is still an incredibly
good value proposition today. If
you look at what an agent gets
on Zoopla Property Group and
Rightmove, it’s incredibly good
value. It’s about a tenth of the cost
of traditional media.
Also, if you look at it on a more
macro level as a percentage of
agents’ revenues, they are spending
far less on marketing and getting
far more than they ever were. For
our business, specifically, price
increases are relative to the value
we are providing. In other words,
our service has continually grown
year on year, and will continue to,
constantly becoming better value for
Our audience has grown 37% over
the past year alone. The portal
proposition is far better today than
any other media proposition that
agents have ever had and it is only
getting better as we add more
services and our audience grows.
So I don’t think that portals being
expensive is a valid argument
from Agents’ Mutual.
If you think about it in the context
of the numbers, Rightmove’s
Alex Chesterman, CEO of Zoopla Property Group
average revenue is about £600 a
month and ours is about half that.
The average agent lists about 60
properties with us, so in our case
it’s around £5 per property per
month. Let’s just think about that -
£5 per property for the services
that we provide.
We generate almost 50 million
visits per month and have invested
hundreds of millions of pounds so
far to get to where we are today.
We provide exposure on some of
the biggest websites in the UK,
both the ones we own and the ones
that we power like The Times,
The Telegraph, all the ISPs and
the banks’ mobile apps. The value
proposition is incredible.
It’s around £5
Let’s just think
about that -
£5 per property
for the services
that we provide.
Ian Springett asserts that
rather than providing value,
Rightmove and Zoopla have a
stranglehold over agents, he
says they are being conned:
They’ve been clever about the way
they’ve sold to agents. They don’t
sell “additional services” as part of a
menu. They say they’ll increase the
base listing fee less if agents buy addon
products to generate a supposed
local edge against their competitors.
In many cases it’s not clear that
agents are actually achieving any
significant competitive advantage
- they’re just paying more for a
constant stream of new products.
Agents often feel that this is a con
and I can certainly sympathise
with this view.
Alex Chesterman sees it differently:
I think the other part of the pricing
argument that’s interesting is that
there is a very clear and definable
return on investment with us.
We deliver an average of about
120 leads a month to each member
so the cost per lead with us is
very clearly measureable and we
price based on performance.
Agents’ Mutual is asking agents to
sign up at a fee that in some cases
is higher than ours for an extended
period of time for a proposition that
Therefore from a price or a value
proposition, how does Agents’ Mutual
fit into the mix?
We are very comfortable that the
value proposition that we provide
today is incredibly good value.
Clearly if you’re an agent operating
from a bedroom or a garage on an
industrial estate, that’s not going to
“The main reason why businesses like
Purplebricks are even able to enter the
market is because the two big portal
groups have welcomed them as new
sources of revenue, allowing them to
co-exist alongside their main customer
base of full-service estate and letting
agents. I see them as parasitic in that
sense. We are very clearly defined about
who we will accept as member firms,
because ultimately we think that the
Nick McKittrick also had this to say:
We’ve worked hard to build up the
trust in our brand and build up this
market leading position.
We have become one of the top 10
most popular sites in the UK, we
are now ranked alongside global
brands such as Google, eBay,
Amazon and YouTube.
When we speak to our customers
the majority say they want to
continue to advertise on Rightmove,
and their reason is that they
want to continue to offer the
unparalleled exposure to their
clients and put their clients in front
of the largest home moving
audience in the UK.
As I say, you have to prove that
you are worth the cost and
ultimately, the agents will
make the decision.
‘Is price really the issue? Switching an office from Zoopla Property Group to Agents’ Mutual
might not save a penny and at best a few thousand pounds a year if you come off Rightmove.
Many Knight Frank and Savills offices probably pay more in parking fines than they will save by
dropping both portals so what is their and your real driver for change? Is it fear, as Ian Springett
suggests, of new types of agents, that online and non high street operations will take over?’
We posed this question and also the issue of private listings to each of the CEO’s.
You know this is a bet on the future
of full-service agency really. We
are not allowing direct listings from
developers and we are certainly not
going to be allowing, not now and not
ever, Internet only, non full-service
agencies, many of which charge a fixed
fee regardless of whether or not they
find a buyer or a tenant.
One of the core parts of the
proposition is that our member agents
commit to promote our portal in
environments such as their window
displays and offices.
full-service agency model has legs as a
very local business.
I think that vendors and landlords
ultimately gain considerable comfort
and value from dealing with people
who have on-the-ground expertise,
who have a reputation locally and who
are physically present. We appreciate
that means we are not going to get
100% of the total potential market,
but that’s not our top priority. On one
level, we’re in business to defend,
support and boost the interests of
what is still the biggest sector of
THE PORTAL LEADERS’ DEBATE
We have no intention of taking private
sellers or landlords and have never
considered it. Any attempt to insinuate
otherwise is deliberately misleading.
We have rigorous vetting procedures
and set minimum standards. We turn
prospective customers down every
month. They have to be carrying out
estate/letting agency work, they have
to comply with relevant consumer
protection and industry regulations,
they have to be members of an
ombudsman scheme. We have additional
requirements of our own, around the
quality of service provided; that’s what
we are making the judgement on.
For example, we make sure we meet
the agents at their premises before
progressing membership and review
their terms of business.
We look at the way they handle
enquiries, which reflects on Rightmove
and how they vet their clients. There’s
a whole series of things we look for.
It’s not a judgement whether they have
a high street presence, a secondary
presence or an admin office, it’s about
quality service; that’s what we judge
our membership on. We do mystery
shopping so we can see how they vet
their clients, how they handle enquiries
and what is actually happening.
We trust people when they take us
through their process.
If people do slip through the net we take
it seriously and address it.
It’s not a judgement
whether they have a
high street presence,
presence or an
admin office. It’s
about quality service.
Alex Chesterman didn’t pull any
punches when it came to the question
of taking private listings, either
directly or via the backdoor:
Let me answer your question on
private listings. There is a lot of
misinformation in the market,
generated by people who have a
vested interest in peddling that sort
We have always very clearly stated
that we don’t take private listings and
will not take private listings, either
from private sellers or private
We have very specific criteria about
who is able to advertise with us. In
fact, we went so far as to publish
those criteria in December. We only
accept advertising from agents
There are clearly new agency models
appearing in the market, but that’s
a natural evolution. So you have a
variety of different agent models
and consumers will migrate towards
the services that are most suitable
to them, the type of services that
If you are a full-service agent
providing a great service and charging
a sensible fee, you have nothing to
fear from new entrants and new
models in the market.
There will be a small percentage of
consumers who want a different type
of service at a different cost. That’s
the market, but we do not and will
not accept private listings.
Never have. Never will. No interest.
It’s not our model. Our model is to be
the most effective partner for estate
agents and I mean that beyond the
pure marketing sense.
If you are Agents’ Mutual and you are
trying to appeal to the emotional side
of people you have two ways to stoke
up the rallying cry. One is over pricing,
that the portals are expensive and are
going to charge ten times more over
time and that is not only untrue, but it
is also impractical.
Our business is based on charging a
sensible fee to agents. We absolutely
want to get a sensible price for the
proposition we are providing, but not at
the expense of putting our customers
out of business and biting the hand
that feeds us which, would put us out
We are all about ensuring that we
deliver great value to our customers
and are their most effective
The other rallying call is to try to
create fear in the market. So private
listings is something that, again, is not
something we have ever done or
From the consumer perspective, we
want to provide a service where the
quality of listings to our consumers
Look, if you want to get agents charged
up about the idea that Zoopla and
Rightmove are either the enemy today
or going to morph into the enemy in
the future, that’s a great rallying cry,
but there is absolutely no truth to it.
We have always
and will not
0333 202 1005
Why? To ensure every call
is answered – even when
their branches are closed
or their team is busy.
42%* of all calls to estate
and lettings agents are
related to new business
– can you afford to risk
Talk to us about how we
*Moneypenny 2013 call statistics.
We look after telephone calls. That’s all we do. We do it better than anyone else.
THE PORTAL LEADERS’ DEBATE
Agents’ Mutual has defined its proposition to agents very clearly, however the key group that
determines the success of any portal is the consumer. Rightmove has invested £300 million
to date establishing the brand into the top 10 of all websites in the UK. Zoopla Property Group
has spent £200 million in a much shorter time period and has increased consumer awareness
to 80% – both portals are spending around £40 million a year currently to maintain and build
on their position. Any new competitor cannot start, from a consumer perspective, on an equal
footing; there is a huge amount of goodwill and trust already built up by the established portals.
use and functional, but there’s a trust
and deeper emotional connection there.
That’s what we’re trying to tap into.
I think it’s a bigger space than the
rational, we see this as the more
“Find your happy”
valuable space and one that can be at
the heart of Rightmove.
Ultimately it boils down to the rational and
emotional. At the highest level they are the
choices you have and beneath that there
are various ways to implement those.
I am very happy with our campaign and
we’ve had some fantastic feedback from
consumers and customers.
Indeed, both Rightmove and Zoopla Property Group are right now helping thousands of buyers,
sellers, landlords and tenants on their second or third move: these are consumers that are
used to the established portals, they have their apps on their phones and tablets, they go to
these portals first by default.
Rightmove and Zoopla Property Group have each chosen a different territory, they’ve selected
a different consumer proposition with one aiming for the emotional and the other the rational
drivers. This begs the question, how will Agents’ Mutual make their pitch?
Ian Springett was not very forthcoming on this point and wouldn’t discuss the name of the
portal, (it won’t be Agents’ Mutual at the point of launch), nor the consumer proposition in
detail, but he did make several points.
Alex Chesterman has a different view:
From a marketing perspective, you can
either appeal to people’s heads or to
their hearts and our vision is very clearly
that Zoopla is the place that provides
all the data and research around the
property search process. For us, it’s
about appealing to people’s heads.
We are not going to attempt to
replicate what Zoopla is putting
forward, because we don’t think it
is sound enough as a proposition to
consumers. There are plenty of places
where they can get data to inform
themselves about a particular area.
We think what the consumers are
after across all platforms, is a slickly
integrated, well-packaged and
presented, accurate, up-to-date, very
good, property search service. That’s
what they’re interested in, they want to
find a home.
We’ll be able to tell people who they can
expect to find on the portal, and we can
convey certain benefits - not of being
agent-owned, which will probably not be
part of the main message to consumers.
I’m not going to go public at this stage
with everything we’ll do with our
member agents, but there will be things
that the members can do for us and
give us which will allow a certain edge
to what we’re doing and it is a fact that if
we enter the market with the strategy we
have, the market will split.
be part of the
main message to
In our conversation with
Nick McKittrick we brought
up the new Rightmove
campaign “find your happy”
noting they’re going for the
emotional drivers of the
consumer and asked him to
explain the thinking behind it.
Rightmove is a site that consumers
know, love and trust when they make
life-changing decisions and it’s a place
where consumers can get confidence
when making these decisions.
We are trying to connect with the
emotional side of things and “finding my
happy” seemed to get to the heart of it.
Everyone has a different happy and we’re
saying it’s not just about being easy to
Consumers generally have an affinity to
a particular brand and for Zoopla we’ve
very deliberately gone down the road
of appealing to data-hungry, digitallysavvy
users, because one of the things
that’s changed quite materially over the
last five to ten years is the consumer
appetite for information. The modern
consumer wants to know everything
and that’s the position we occupy.
We believe that the portal(s) that win the consumers’ attention will win this battle. Online forums
such as Property Industry Eye have covered much debate about the pros and cons for agents,
but this is not the deciding issue, the home mover will determine the outcome.
When Rightmove launched, agents assisted them by directing customers to their site but now the
tables have turned - consumers go to the portals first before they go to agents. Are agents really
going to refer their customers, that have come to them from Rightmove or Zoopla Property Group
or elsewhere back to another portal and, as a consequence, to their competitors?
Agents’ Mutual has yet to show its hand, but the other portals have and are investing huge amounts
of money to capture home movers’ hearts and minds and no doubt will continue to do so, indeed
are likely to spend even more over the next year or two.
THE PORTAL LEADERS’ DEBATE
So how do, arguably, some of the most powerful people in property see
things panning out after Agents’ Mutual has launched?
We welcome competition and there will
always be a variety of different places
and services offering differentiated
features and there will be people loyal
to different brands. You might use
the Coke or Pepsi analogy in terms of
Rightmove or Zoopla, for example.
of the market, because they’re asking
agents to take a lot of pain to join their
service. I think if we had set out and said
you have to cancel Rightmove in order
to join us, I don’t think we would be in
the position we’re in today. Zoopla has
close to 80% national brand awareness.
their customers, vendors and landlords,
won’t stand for it and over time will
migrate to those businesses with two
arms and therefore, actually, I believe
the whole of market inventory will
remain. I think that’s what you will see
Our target is to try to get to 5,000
offices by the end of the year. Now
if we get to 5,000 offices that will be
serious for the other two portals in
the sense that they will both lose
revenue and property content. It
powers us up at the same time to
give a very serious message to the
consumer, and those 5,000 offices
will be actively promoting our portal
to their customers and applicants.
We’ve got £6m to get to market and
then we’ll be funding our portal
entirely from fee revenue of various
types, mainly listing fees. The firms
who are buying into this understand
that you cannot change the
competitive landscape in six months,
but we can continuously improve
what we’re doing over a period of
time to get to the end-game. Our
stated objective is to get to 10,000
agent offices, which is where we
think the full service sales and letting
agency market is.
Very shortly Rightmove and Zoopla
are both going to be public companies
with all the pressures of earnings
for shareholders and executive
bonuses and all that kind of thing. A
duopoly means you have two massive
media operations and 15,000 small
and medium-sized enterprises as
customers up against the two giants.
So part of our game plan is not just
to create an immediate cost saving.
Looking at it over 5 years we will not
only provide a lower cost alternative but
we will be a serious brake on the price
increases of the other two.
I would say the general vibe is that
the majority of agents would like to
leave Rightmove because they charge
excessively and they deliver their
service in quite a high-handed manner.
Being independent, the agents don’t
like being treated like that. They now
feel like slaves. In a lot of cases so far,
people are saying that they would like
to leave Rightmove, but that that has to
be stage 2.
If I think about the agency market
there’s a lot of criticism - estate agents
regularly end up at the bottom of
the popularity rankings - but I think
ultimately it’s a better model for the
consumer than the alternative models
which operate at the fringes, or the
eventual end game if the market
for property transactions were to
consolidate to a handful of large,
centralised, utilities-style businesses.
We are a mutual. I don’t have any equity
in the business, and it’s not the plan
ever to sell it off in any event, but it does
need to be driven commercially. We
just have more flexibility about what we
do with the profits: either we re-invest
them to make the business better or we
reduce the fees. So the management
team is driven by profit, and over a
period of time we have to drive profit.
The primary driver of profit for us is
going to be agent take-up and support.
This means we have to produce a really
good, effective brand proposition and
product to attract consumers and
connect them with the agents and
properties which best meet their search
criteria. We have to do all the things,
in other words, that make any other
business commercially successful. The
only difference is the agents will retain
complete control and we’re not creating
an asset for shareholder value. It’s a
service to the industry.
I see it as being competitive –
it has always been competitive and
I don’t anticipate any changes there.
We will always see new entrants as
we have done over the last 15 years
and as we continue to do. It comes
down to delivering the largest and
most engaged audience and
that’s what is critical in the
There have been a lot of players in
the market that have come and gone –
Rightmove has stayed, has innovated
and remains relevant which is shown
in the size of our audience.
I see us leading the way. We have led
the way from the start and we will
continue to do that. I think it’s our
unparalleled reach. We have by far the
biggest audience and by far the most
engaged audience, so it’s the ability
to get your properties and your brand
in front of the largest home moving
audience in the UK and to be able to
deliver that for your clients.
I think it is then the volume of
enquiries that we generate - over
3.5 million enquiries for our
customers every month, which is
more than one every second.
We give agents the ability to
differentiate in front of that largest
market, to differentiate their brand
and properties and themselves to
So it’s back to trust, Rightmove is a
place that customers and consumers
can trust. They can also be confident
that it is independent, which they say
that they also value.
Agents’ Mutual is another competitor in
quite a long line of competitors of which
there have been many. Where I think
Agents’ Mutual differs is only in the
sense of the restrictive clause that they
are proposing, which prevents people
from being on Agents’ Mutual and
both of Zoopla Property Group
That’s quite a difficult position for a few
reasons. One, I think that’s a big hurdle
and barrier for them to get to the whole
As an agent described a few weeks ago
- “Agents’ Mutual is asking me to chop
off either my left arm or my right arm
and I need both to operate my business,
Zoopla’s my left arm and Rightmove’s
my right arm. Why would I cut one of
I think that genuinely is the case so
I think it is a big ask, because what
actually is likely to happen for those
parties who decide to accept such
restrictions on their businesses is that
We are very excited about the float and
that we have been able to provide an
opportunity for our members to have
a stake in our business and invest at a
discount, which is a great offer. We are
delighted to be able to do it.
Of course, some people will spin that
in whatever way they want, the truth is
we want to reward our customers for
being loyal members and we’ve had an
overwhelmingly positive response from
our customers to the offer.
This debate might cause more questions to be asked than answers given –
here are 10 Questions for you to consider:
The Corporates, including Countrywide,
LSL and Connells, will all stick with
Rightmove and Zoopla Property Group,
none of their inventory will appear on
Agents’ Mutual, nor will the big house
builders be allowed to advertise there –
what impact will this have?
Members of Agents’ Mutual will
not be allowed to promote their
membership of either Rightmove
or Zoopla Property Group. What
consequences might this have?
If left unchecked, will Zoopla
Property Group raise their prices by
50% to match Rightmove and then
will both portals increase prices to
Agents’ Mutual believe that the
majority of their inventory at launch
will come from agents dropping
Zoopla Property Group, what will
this do for Rightmove’s position?
How will the consumer feel about a
portal owned by agents? How might they
react to their property not being advertised
on one or both of the established brands?
Can Agents’ Mutual succeed where
Google, the Sunday Times,
Daily Mail, Trinity Mirror, NAEA & ARLA
and many others have failed?
Is Agents’ Mutual the last stand for
the traditional agency model?
If they fail will it herald the demise
for full service agencies?
How might Google fit into the landscape?
Will there be a role for the world’s largest
search engine if the consumer cannot
conveniently access all properties
available for sale and to rent in
If Google was to re-enter the market, will
this open the door for private listings on
If Agents’ Mutual attracts a high
percentage of agents, then will
anti-competitive legislation allow
them to restrict agents
advertising on other sites and
might this result in agents
paying three or more fees?
Stick or Twist?
All three leaders make their case with
passion and conviction but not all three
can be winners and agents that back
the wrong horse could end up being