COVER STORY - UNTANGLING ONLINE LISTINGS, WHAT AGENTS MUST KNOW

Online listing websites offer agents plenty of options. But how efficiently are they being used, and are they cost effective? In part one of a two-part series, Real Estate Business’ Simon Parker and Matthew Sullivan talk to the two biggest players in the online space: realestate.com.au and domain.com.au

September was a busy month in the online property listings world.

It was a month in which two new sites – the Real Estate Institute of Queensland (REIQ.com) and View Property Australia (www.viewproperty.com.au) – entered the market.

They join an already competitive market, which includes the likes of:

• realestateview.com.au,

• homesales.com.au,

• REIWA.com.au,

• homehound.com.au and

• thehomepage.com.au.

Providing a proper view of this market is beyond the scope of just one article. This is why Real Estate Business first approached both REA Group, owner of realestate.com.au, and Fairfax Media, owner of domain.com.au, to discover what their websites offer agents in benefits and cost-effectiveness and to discuss the issues facing the online listings market.

Next month, we talk to the other players in this increasingly intense market.

FIRST, WE ASKED TONY BLAMEY, GENERAL MANAGER OF REAL ESTATE AT FAIRFAX MEDIA AND ARTHUR CHARLAFTIS, GENERAL MANAGER OF SALES AND OPERATIONS AT REA GROUP HOW MUCH TRAFFIC EACH SITE CURRENTLY RECEIVES AND HOW THEIR RESPECTIVE SITES ARE BEING USED BY AGENTS AND CONSUMERS.

ARTHUR

“On a monthly basis, we are in excess of about 450,000 listings. That was the August number. Listings are similar to July but are up on last year.

“On the unique browser (UB) front, we are sitting in excess of seven million [for August].”

The average session duration (ASD) on realestate.com.au that month was around eight and a half minutes, he adds.

“The only market where we probably don’t have as strong a position is the ACT – in the rest of the country we have a strong hold.”

TONY

“Right now, we have around 300,000 listings across Domain – that doesn’t include our commercial listings. We’re growing that fairly steadily as we increase our market share.”

Mr Blamey says Domain is more focused on measuring its success by unique audience [UA] figures.

“We think unique audience is a more reliable measurement. This is based on the premise that, in Australia, the rapid uptake of devices has meant the country has 100 million UBs for a population of around 23 million.

“[UB] has lost its relevance with the proliferation of new devices.

He adds that Domain has a UA of around 1.4 million, which is growing steadily. The site’s market share has also grown, with a 25 per cent year-on-year rise in the second half of fiscal year 2011.

WHAT ARE THE MOST POPULAR ELEMENTS OF YOUR WEBSITE, FROM BOTH THE AGENT’S AND THE CONSUMER’S PERSPECTIVE? WHAT NEW TRENDS SHOULD AGENTS BE AWARE OF?

TONY

“From a consumer’s perspective, we’re seeing video being accessed more and more.”

Since its launch six months ago, Domain TV has yielded 2.7 million video streams, he notes.

The Domain iPhone app is also proving very popular, he adds, with more than 500,000 downloads since its launch two years ago. The app brings in 10 million property searches per month, with about 15 per cent of total enquiries and leads coming to agents from it.

“We believe the iPad app is penetrating 10 to 20 per cent of all devices on the market. The uptake has just blown away our expectations. In the next two years that will be the main way people will be accessing internet content.”

Domain’s smartphone apps have been built specifically for Android, iPhone, Windows 7 and Samsung beta phones, which ensures the best possible consumer experience, he adds.

“That’s the business we’re in: aggregating audiences and aggregating content and serving that up in the best way for consumers, giving them the latest tools and the best information. What we’re doing is empowering the consumer, who is getting more and more information. They’ve become more and more qualified and ready to buy.

“From an agent’s point of view, ‘Suburb TV’ is a relatively new thing we’ve launched, and that’s been well received by agents.

“It allows agents to sponsor their own suburb. It’s video content that showcases the local area, hosted by the real estate agent, allowing agents to position themselves as the authority in that area, and they talk about its lifestyle aspects.”

‘Top spot’ videos, which allow agents to get the first listing in their suburb, are also popular, he adds.

“Agents love that – anything that can differentiate them or have exclusivity is a real benefit for them.”

ARTHUR

Agents can benefit from 22 reporting metrics provided by REA Group, says Mr Charlaftis.

“They can go to a vendor and say, ‘this is the activity we have had in relation to your property; this is how many people have viewed your property; and this is how many people have enquired as a result’.

“It allows an agent to have a good conversation about a price point.”

In the future, he adds, as part of its subscription offering, REA Group will provide even richer data, which will help agents to understand how their performance compares in the context of the local market.

“The other technology [trend] is more mobile use and we know with mobile, our measure is in engagements.

“We have this rule around engagement levels, with viewing the property being the first tier. Secondary engagement might be looking at the maps, looking at the property in more detail. Then you have the third level, where you have sharing, which we see as a stronger level of engagement.

“When using a mobile device they move quicker across that spectrum than they would otherwise on the web portal. There is just a higher level of engagement on these devices than there is on the website.”

He believes this is probably because people who use mobile devices when looking at property are typically on the road, so they will want to know locations, how to get there, or whether the property is open for inspection.

HOW HAVE PRINCIPALS AND AGENTS ADAPTED TO ONLINE LISTINGS OVER THE YEARS?

TONY

“Five years ago there was a lot of education going on and people were a little unsure. Agents are pretty comfortable with it now – they’re much more educated.”

This doesn’t mean, however, that print advertising has become irrelevant.

“Our print products are great for someone wants to get a more overall view of the market. What we find with online is that you know what you want and you do a search – you drill right down.

“What print gives you from a vendor’s point of view is access to the whole market.”

Print can also give the agent a much-needed profile, even when people aren’t looking to buy.

“Agents are trying to differentiate their brand – to establish why you would choose me when you’re listing your property – and that brand perception is built up over time.

“It’s important they’re in our print products because when people are just flicking through, they may or may not be in the market at that point, but eventually they will be, and they’ll need to choose the agent they list their property with.”

ARTHUR

“I would say there is a tipping point at which people say, ‘well, I can’t only be in print’, and they realise the importance of an online presence.

“There is a different level of sophistication from one agency to another about what it means to have an online presence – not just to be online but actually have a presence.

However, many agents and principals are also now realising just how expensive and time consuming it can be to maintain a comprehensive, up-to-date online presence, according to Mr Charlaftis.

COULD AGENTS BE USING YOUR SERVICE OFFERING MORE EFFECTIVELY? IF SO, HOW, AND HOW WOULD THEY BENEFIT?

TONY

“One thing we still come up against is a minority of agents that will try and restrict the information they provide online. This is the view that, ‘if I give too much information away, the consumer won’t have a need to contact me, and I’ll miss out on the opportunity’.

“Consumers have expectations around what they get online, and they want that information. Our advice to agents would be that more is better. Put more information up and you’ll get a more qualified buyer or vendor coming through.

“We still see listings with one or two photos. It’s not a good experience for the consumer. They’ll think, ‘what are they trying to hide, what’s wrong with it? Or they’ll only engage for a brief period.’”

Agents should note that video is also growing in importance, Mr Blamey says.

“[With video] you’re locking them in. We see engagement levels with video, property views, leads, that are sometimes three times as much as a listing without video.”

ARTHUR

Agents who spend considerable amounts on print advertising but fail to support this with a strong online campaign can end up undermining a property, according to Mr Charlaftis.

“Marketing mix is important, but probably what’s been undercooked by the market would be just how good you can be online.

“Getting the whole branding picture – and the positioning of a property online as against print – is something I expect we’ll see change over time.

“The first [transition] was from people saying they had to be online to saying they have to have a very sophisticated presence online.

“The next thing is ‘I can’t just have a website; I have to have everything’. REA’s position includes trying to educate agents around the use of our site and trying to provide additional platforms for them to improve their online presence, both from a social media standpoint and with a mobile device presence.

Associated with this is the way in which agents present online to vendors.

“At the moment, I would say that a lot of agents, in presenting a marketing pitch to a vendor, would present quite a detailed schedule for a newspaper, while for online they wouldn’t. They’ll say we’ll put you online, but then it’ll be a function of what the agent thinks that should look like.

“Over time, though, they’ll find they’ll be doing a detailed schedule for the vendor. That is going to be a competitive advantage for agents who move quickly because vendors are consumers. Most who are selling are usually [also] buying, so they look at the site as a purchaser as well as a seller. Their requirements and expectations of agents are going to increase.

“Some agents who are innovative online do have quite a strong presence. They’ll do banner advertising, they’ll take a feature location, and in addition to that, they’ll take a high level premier [ad placement] so the first or second page of the website is dominated by their branding.

“They almost see online as not dissimilar to a newspaper, but they’ll actually look at what consumers are seeing when they look at the page. That is a more mature way of looking at online than most agents do.”

WHAT IS YOUR PRICING POLICY? IS THE STRUCTURE LIKELY TO CHANGE IN THE NEXT 12 MONTHS?

TONY

Domain offers a subscription-based pricing structure, a model not unlike the one newspapers use to charge for advertising.

“It’s what we describe as a zoned structure. It’s not volume-based, but we do cover the market in four different zones. For example, someone in a regional area will pay a lower rate than someone in a metro area. It’s reflective of things like audience numbers and the value of houses.”

Rates have remained steady for two years, he adds.

“We will review them at the start of every financial year, but we didn’t do a rate increase last year and we’ve maintained our rates at the same level this year.

“What we’re doing is adding value by extending our audience into mobile devices, and by growing that audience. We’ve tried to grow our revenue through the introduction of new services and new products rather than just by very aggressive rate increases, which I don’t think is sustainable.”

ARTHUR

Subscription pricing is complex, according to Mr Charlaftis.

“Each state has its own tier system based on a combination of factors, including but not limited to the number of agents, number of listings, number of emails, number of agent profile views, number of property views and competitive intensity.”

In future, REA Group will look to add more value and continue to give more value back to the agent, he says.

“The two ways in which we will do that are analytics and supporting agents on their platforms, understanding though that if we do support them on their platform, that takes a lot of costs out of their business – significant costs that [outweigh] the cost of the actual subscription.”

REA Group is also upgrading the appearance of the website to enhance the experience of the visitor.

“The vast majority of agents recognise that realestate.com.au generates a significant proportion of their sales enquiries and therefore perceive great commercial value in their subscription.

“Our price increases are accompanied by increases in the value driven by ongoing traffic as well as by innovations. Our goal is to continue to add further value to our agents via the development of their online presence and additional reporting tools.

“We have also escalated our investment in account management and customer service resources.”

DO YOU BELIEVE AGENTS – AND VENDORS – GET GOOD VALUE FOR MONEY USING ONLINE LISTINGS?

ARTHUR

“Absolutely – and I say that on the basis that first, you get duration; second, you get feedback on performance; and third, the statistics which show how the property is faring compared to others in the area help educate the vendor on what they should do if the property isn’t selling.

“Obviously, the agent’s relationship with their vendor is key, and they find that feedback mechanism very useful as a relationship tool. It gives them an opportunity to call the vendor weekly, saying, ‘I’ve just looked at your report: these are the number of enquiries, and these are the number of visits’.”

Online advertising is also more cost effective when factoring in the longer time that properties are now on market.

“The agent needs to be thinking, ‘how do I manage my marketing spend so that it actually covers a longer duration’. A useful tool for doing that is online because it’s the most cost effective way, and it gives more duration than print.”

This can help agents sell the concept of vendor paid advertising (VPA), he adds.

“We’re looking at educating vendors about what’s available online. They’ll talk to their agents about what their options are. The goal is to educate vendors and make the job easier for agents because vendors then understand the value of each of the products.

“Obviously the goal of a lot of agents is to move towards VPA.”

REA Group is looking to add more value by providing more about market comparisons, so agents can compare their performance with other agents. The group also aims to assist agents with developing their online and mobile presences.

TONY

Mr Blamey agrees that both agents and vendors get good value for money using online listings.

“What we’ve tried to do at Domain is grow our revenue through developing new products, but we haven’t been highly aggressive with rate increases for our online products. It comes back to that UB issue: the [UB] audience looks like it’s going up, but it’s actually a proliferation of new devices.

“We haven’t tied our rate increases to that audience growth. Our growth has been about new products, and we really see ourselves now as a real estate media and services organisation.

“We’ve got our established advertising products – whether that’s our print products or online or mobile – but more and more we’re offering real estate services, so there’s the MyDesktop CRM system. We have Australian Property Monitors (APM), so we offer data solutions to agents, and now we’re offering video production services. We’re [also] offering photography, sign boards and brochures in partnership with some other organisations.”

DO YOU ALLOW VENDORS TO LIST ON YOUR WEBSITE?

TONY

Mr Blamey says domain.com.au allows private sellers to list directly on its website, without the use of an agent. But this is nothing new: the Fairfax stable of newspapers has allowed this throughout its 188-year history.

“In Australia, the number of private vendors is very, very low. It’s a couple of per cent across the entire market. Most private parties that use our online sites are people who offer share accommodation or private landlords offering rental accommodation.

“The vast majority of vendors still choose an agent. It’s their most important asset and they want someone with local knowledge that can market that property.”

“We don’t have plans to disengage agents from the process. We see them as really important across all our range of products.”

ARTHUR

Vendors cannot, however, list directly on realestate.com.au, notes Mr Charlaftis.

“The only way you can list a property through our site is through a licensed real estate agent.

“We have just spent a lot of money on a television campaign saying talk to your agent, so it would be ridiculous for us to say, on that basis, that we are now going direct to vendors. What we are doing with vendors is educating them on the product and encouraging them to talk to their agent.”