Trade Me makes a radical change to real estate agent fees

by Alistair Helm in


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Trade Me has made a bold and challenging move, telling the real estate industry that they need to charge clients for their property to be listed on the site, instead of absorbing the cost.

With effect from the 1st November the company will no longer offer bulk subscriptions to real estate companies that previously allowed them to pay a single monthly fee for unlimited listings.

This move comes shortly after the annual report for the last financial year highlighted that the property section of the business held significant revenue growth potential.

Let’s look at the situation for a typical real estate company. I chose at random Professionals Rotorua (McDowell Real Estate Ltd). In the last full month of August the company listed 19 properties for sale.

The current subscription fee is a base cost of $250 plus $124 per listing with a cap of no more than $999. So this office would in theory pay Trade Me $999 for those 19 listings in August.

With effect from the 1st November the base fee of $250 is removed as is the cap. Each listing will be charged at $159 – a total for August of $3,021 – a 200% increase.

The big question that each and every real estate agent and real estate company will be asking right now is how can we manage this?

Click to access the full proposal to agents

Click to access the full proposal to agents

Trade Me are very clear. As far as they are concerned this fee-per-listing should be passed on to the vendor as a cost to market a property on Trade Me. After all a private listing costs $349 / $399 (inc GST) so $159 + GST ($182.85) is almost half the cost of a private listing.

In the communication being sent to real estate agents Trade Me detail that the recommended price agents should charge vendors is $199+ GST ($228.85) – this allows a 20% commission margin for agents. The Real Estate Agents Act is very clear in detailing that in terms of advertising costs that the vendor pays for, the listing agent must stipulate if there is a commission earned for selling any advertising. At the time the Act came into force in 2009 the industry were very clear that they in the main passed on advertising costs without a commission. Now there is nothing wrong with agents earning a commission selling advertising, it is just interesting that Trade Me are so explicit with it in their communication.

This is certainly a bold and aggressive move by Trade. In terms of marketing a property for sale – advertising on Trade Me is the essential part of any campaign and when compared to c.$1,000 for a full page in a single property magazine or many thousands of dollars for a picture in a newspaper spending $200 for a listing on Trade Me is cheap.

Will the vendors accept this re-charge?

Since the start of Trade Me as a legitimate website for property for agents back in 2005 most agents have not charged their clients to have their property on Trade Me, just as they have not charged for Realestate.co.nz or their own website.  They started back then from the perspective of online advertising being a “nice addition” to the mainstream advertising of newspaper and magazines. Over the last 10 years that situation has reversed, nowadays newspapers and magazines are the “possible addition” to the mainstream online advertising. Accepting this change has been tough for agents and more especially real estate companies as print media is so effective in real estate brand advertising as compared to the web which is solely property focused.

Clearly though real estate agents and companies have no choice; as to swallow this cost for all listings would mean the industry would have to pay up the $21m of revenue that this move creates for Trade Me up from an estimated $7.5m earned in the past year from subscriptions.

Once established as a vendor cost recharged by agents then it will make it easier for Trade Me to apply annual increases of the order that they have applied over the past 8 years to private listings for property.

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Share your thoughts - Should real estate agents re-charge the new Trade Me fees for advertising a house or absorb the cost?

 


Real Estate and Technology – the event of the year

by Alistair Helm in , ,


This week will see me in San Francisco attending one conference and hosting another; both of which are central to the future of real estate's reinvention through the power of technology.

Inman Connect starts on Wednesday 10th and runs through Friday 12th July. This conference operated by Inman News through its inspiring publisher Brad Inman has for over 15 years, created a forum to chart the future of the impact of technology on the real estate industry domestically in the US and internationally. Hosted bi-annually; July in San Francisco and January in New York, these events attract an audience of over 1,500 from across the US and the world – a mix of real estate agents and business owners as well as technology companies and property portals. The format is rich in content, and fast of pace; presentations, discussion sessions and face-to-face challenging debates. 

I have attended a number of Connect conferences over the years in my role as CEO of Realestate.co.nz. In the early years these events were pivotal in identifying the trends such as social media and mobile which I brought back and enthusiastically adopted in some cases a year or more before the competition. Inman Connect was the reason I started blogging back in 2007 with the Unconditional blog as well as starting a closed industry forum for agents. As for mobile, Realestate.co.nz certainly benefited hugely with an 18 months lead and 100,000 download advantage over Trade Me before they launched their specific property app as a result of the focus that capability showcased in 2009.

The conference I am hosting this week in San Francisco is part of my 'other day-job' as CEO of Property Portal Watch. To coincide with the Inman Connect conference we organize a one-day conference for CEO’s / owners / founders / executives and investors in, and partners to the world of property portals. This event will be the 8th Property Portal Watch conference and our largest yet in San Francisco with at this time 120 attendees from 24 countries representing 41 different property portals from the powerhouse operations of ImmobilienScout24 in Germany, Zillow in the USA and Realestate.com.au in Australia to the emerging markets in Africa and South America. These attendees will participate in discussions around the core themes of Big Data, Social, Mobile as well as operational topics and strategic investment issues and opportunities.

Both of these events will I am confident provide rich pickings for future articles. I will be ready with laptop in hand to cover the core sessions and emerging ideas as well as hopefully to chance upon a few new start-up companies that showcase their wears at the Connect conference offering new functional services for real estate companies. I will be writing a couple of articles here on Properazzi, but also check out the article over on Property Portal Watch.


Digital marketing - the solution for selling or renting property

by Alistair Helm in ,


Digital marketing iStock_000020738971XSmall.jpg

Whether you are a property owner of an investor there is certain to be a time when you need to sell a property, or find a new tenant. 

You may well decide as part of your strategy that engaging a real estate agent or a property manager is the smart decision, after all they are professionals and they know best. They are self-employed and earn their living doing exactly that – finding buyers or finding tenants.

Whether you choose to use such a professional or you choose to do it yourself, in my mind there is no excuse for abdicating responsibility for the marketing of your property. For despite the well intentioned job title of many agents who profess to be “Marketing Consultants” very few actually are functionally trained or experienced in marketing and even fewer are up-to-speed on digital marketing.

I make this assertion; as over the years I have been astounded by the lack of appreciation by most agents as to the power, impact and cost effectiveness of digital marketing. Too many agents fall into a ‘cookie cutter’ approach to marketing a property, or to be more accurate advertising a property.

They are very likely to come out with a spiel such as “We’ll undertake an extensive 3 week advertising campaign starting with letter-box drop to local addresses, weekly full or half page advert in the local property magazine and newspaper and of course we will display an impactful 'For Sale' sign outside your house. I will then undertake an extensive telephone outreach to my database of buyers which will secure great attendance at the weekly open homes and should secure a strong buyer interest within the first couple of weeks”

It is highly likely that this proposed ‘personalised’ marketing campaign would have been recommended 20 years ago as much as it is the generic line for most agents today. The only addition that has crept in over the past decade is the additional line “of course we will also feature the property on our website and of course Trade Me and Realestate.co.nz” – sadly often thrown in as an after-thought.

Contrast this with the fact that over three quarters of all property shoppers, whether looking to rent or buy a property use the web as the first and main source of information and more commonly these days use mobile devices. This data sourced from the annual Nielsen Real Estate Report is unfortunately a couple of years old, but logic would say that the percentage has only risen. These savvy online property shoppers use multiple services such as daily email alerts for new properties, saved searches on their favourite website, as well as planning open home schedules on Google maps.

There has been some heated debates as to whether a property can be marketed entirely online or whether there continues to be value and unique appeal in print media. In my opinion we have pasted that point – you can successfully and confidently market your property entirely online. Simply put, the reason print media advertising of property still exists is entirely for the benefit of real estate companies and agents. They love the branding and exposure, the solid blocks of multiple consecutive pages where the property image fights for attention against the company branding, providing questionable value to home shoppers, as after all what they want to see is all the properties in an area at a price point, not what Agent X has to offer!

Having made this firm assertion, the next question is how should you advertise online and where?

Realestate.co.nz Trade Me Property smartphone apps.png

The where is easy. Whereas in the past multiple website profiles was seen as beneficial, the fact is today there is no incremental value in being on more than 2 websites – Trade Me and Realestate.co.nz. Why so?

Trade Me is the most viewed NZ website for people looking to buy / sell  / rent anything – if you are not on Trade Me you are not online. If this comes as a piece of news to anyone I would be surprised! Realestate.co.nz on the other hand is valuable for two reasons. Firstly it has reputation as a specialist site, and whilst people who use it to search property more than likely also use Trade Me, they do show a strong loyalty to the site as well as more importantly the mobile app. Secondly, there are a number (albeit few in number) of real estate agents that still hold out from using Trade Me. I know it seems unbelievable but some of the smaller independents do.

Do you need to use any other sites? No.

So the question then becomes how can you make sure your listing attracts more attention / visits than other competitive listings. You need to think about advertising your property for sale or rent as a competitive play. If you don’t attract the right buyers or tenants you will diminish the value of what you offer.

There are just two golden words to remember PRESENTATION & PROMOTION

PRESENTATION

Presentation is all about the photos. Recent research has shown that when it comes to real estate listings 95% of people, when viewing real estate websites view the first photo for around 20 seconds. It’s all about the photos; as the study went on to find that a staggering 4 out of 10 people completely ignored the agent spiel in listings. People trust their eyes and not (so it seems) agent hyperbole.

Get a professional photographer to do a broad portfolio of your property, this is as important for rental properties which suffers as all too often landlords forgot how important photos are to presentation online. Take the time to photograph the rental property between tenants when it is clean and tidy, with a minimum amount of furniture, just enough to show the feel. You can then reuse these images again and again.

I believe that the optimal number of photos for a property is around 20 and for most properties you can really show all aspects within this portfolio. It is unlikely that an investment property needs more. As important as a good number of quality photos is the critical aspect of choosing the first photo. This photo is the one that really has to work hard to grabs the attention of the shopper. It has to be of the most relevant aspect of the property, in the case of a standalone house it must be the exterior as seen from the road. In the case of a townhouse or apartment the living area is probably the right choice.

A final point in regard to the photos, if you organize the photography directly and I would; then ensure the agreement with the photographer means that you own the images and thereby you can use then when you like – too often photos are notionally owned by the listing agency despite the fact you paid for them.

PROMOTION

Promotion is all about creating standout. The base cost of listing on websites is often free. Generally the agent will include the cost of a listing on Realestate.co.nz, and possibly Trade Me as well. As a private seller Trade Me listing for sale, only costs $349; or $399 if the RV is over $450k. Given these minimal costs there is more than enough scope to invest in promotional features on these sites. This type of promotion does work to ensure your listing stands out from the crowd of other listings.

If you chose to use an agent to sell your property then your marketing costs should not need to be more than $1,000, this would comprise the photography of around $300, a Super Feature Combo on Trade Me for $299 and a Quality Package on Realestate.co.nz for $250. Compare that with a single page in a Property Magazine, which will cost you well over $1,000. That print advert lasts barely 3 days and is only seen by locals as compared to the online campaign which lasts 3 to 4 weeks and is potentially seen by a global and local audience.

If you chose to do it yourself you would need to add the listing costs for Trade Me, but then in that case you would not promoting the property on Realestate.co.nz as their listings are by real estate agents only so you could step up the promotion on Trade Me.

Digital marketing for property is easy, accessible and affordable – take control of the marketing of your property, get engaged and benefit from being a smart operator online, it’s that simple!

This article is also published in the June edition of NZ Property Investor Magazine

 


Realestate.co.nz mobile app gets important upgrade

by Alistair Helm in ,


Realestate.co.nz apps.png

You can now sync your favourite properties between the web and your iPhone or Android powered smartphone using the Realestate.co.nz mobile app.

Launched in late 2010 the Realestate.co.nz iPhone app was the first geo-locational app for property buyers and renters in NZ – some 18 months ahead of Trade Me’s own property app. In that time the app gained ascendency and well over 100,000 downloads making it the leading mobile app for property in NZ. The Android version was added in 2011.

However as I stated in a review of the options for mobile property apps back in March, my choice was the Trade Me app simply because it provided full syncing between web and app; and Realestate.co.nz at the time did not. 

Well now that shortcoming has been addressed, and I have to say I am back in favor of the Realestate.co.nz app for all the reasons I stated in my original summary. It is a better and more intuitive app that more fully uses the inherent GPS capability – it makes discovering property for sale or rent so much easier.

In addition to this critical feature of the latest version (Android 1.2.1 iPhone 1.4) there are a couple of extra features. Here’s my take on what’s good and bad.

The Good:

  • The syncing is great.
  • The property details now carries over auction and tender dates – nice.

The Bad:

  • Signing in - I did notice a problem. As with many people I could not remember my password so I had to reset my password and await a new password. With the app open I then entered my new password only to find i was not accepted! I found that you needed to re-start the app so you could sign in with the new password. Its not surprising, but more than a little bit frustrating.
  • When you download the latest version in the mad rush to benefit from syncing your favourite properties, pause a moment to consider that all the favourites you have on your phone with the previous version will be lost and not integrated in the new version.
  • On the iPhone version only, when you first sign in to My Property, no listings show – you need to ‘pull down’ to refresh – this really needs a prompt as you like me probably sit there expecting to see your saved properties and they are not there! The Android version works a treat.
  • The summary of the new features says “Plus when homes are withdrawn or sold we will keep these in My Property under an archived section for 30 days” However when I set up my phone I found (on both Android & iPhone) that this section showed saved properties I had favourited showing up from over 2 years ago – these properties are no longer on the web or in the My Property section of the website and interestingly include full images but no description!
  • Another aspect of the summary says that you can “view all saved homes in a map” – well try as I might I could not find this feature – was I missing something?
  • A final note – the syncing between the web and the app only works when you touch the “Sync” button on the app (to be found top right on the iPhone app). There was no notice of this and by comparison to the Trade Me app this is not as slick.

The missed opportunities:

  • Still no social interaction from property listings, I can only email a listing, no Facebook or Twitter integration.
  • No ability to capture and sync the notes and photos that form part of the ‘inspection’ component of the app.
  • The iPhone app still using Apple maps as the base layer, this mapping solution is terrible as compared to the Google maps. As I understand it the Google maps API can be used to power iPhone apps. The benefits are huge as this example below shows:

Realestate app vs Google maps.png

I am pleased that the Realestate.co.nz app has got this much-needed upgrade. What slightly surprised me was the fact that I found out about this upgrade all by myself – no press release, no notice on the site – even the landing page for apps makes no notification – nothing on Twitter or Facebook about this great improvement, so I am glad I can share this news!

Disclaimer: From 2006 through to August 2012 I was CEO of Realestate.co.nz. The views expressed here are my personal views as an independent observer. I hold no lasting connection to the Realestate.co.nz Limited company, aside from a passionate desire to see it succeed.


New appointment at Property Portal Watch

by Alistair Helm in


Since leaving Relestate.co.nz last year I have been taking some time to “Setting a new career path” as my LinkedIn profile states. I have been keen to remain involved in the real estate industry and be a catalyst for the greater influence of digital technologies in the reinvention of the industry – grand words, but I believe that real estate has to change and become more efficient. I don’t want to destroy the industry or those operating the business, I just want to see better use made of technologies that aid the consumer experience and enhance professionalism in the industry.

A core part of this digital revolution over the past 15 years has been the emergence of the property portal as the preeminent form for home shoppers searching for property to buy or rent. Globally the combined mass of real estate website would conservatively exceed 200 sites with a collective audience of 200 million unique visitors per month and represent commercial businesses generating revenues in excess of $1 billion. Real estate online is a massive global business and its growing fast.

With this as a backdrop and given my passion for running websites and being a part of this global expansion, it was not surprising that I have accepted the role as CEO of Property Portal Watch. This website is a highly specialised site established some 4 years ago by Simon Baker who was the former CEO of Realestate.com.au.

The website business comprising the news of the property portal industry across the globe, together with international conferences as well as emerging business opportunities for added value services to property portals. The site is a core community for the many thousands of people who work in the industry each day.

This new role will fulfill my passion and ambition to remain part of the online real estate community, however it will not consume all of my time. I have gained significantly over the past 6 months running Properazzi. The site has grown a strong and loyal audience which this month will exceed 6,000 unique visitors, it has given me a media platform to share insight and analysis of the property market and also enable me to start to ask some hard questions about the industry.

I am not planning to move from New Zealand and will continue to run Properazzi and the business opportunities that come from it. That is the beauty of technology, I can run Property Portal Watch with a support team spread around the world and with customers and consumers across every country all based from my office in Auckland! 


Property searching on the go - a review of mobile apps

by Alistair Helm in ,


Realestate.co.nz Trade Me Property smartphone apps.png

The evolution of the web has undoubtedly transformed property searching over the past decade; however the emergence of smartphones and the associated vast array of mobile computing devices just 5 years ago is set to transform property searching at a much faster rate. Already most property website operators report close to half of all engagements with their listings are from mobile devices and is rising everyday.

Mobile searching is intuitive. As we all know the only really effective way to assess property is to get out there in the car and walk around; sure the web is a great starting point but what you really want to do is capture your hit-list of property options and carry them with you, as you drive around, that is what the mobile device is designed for.

Checking out the Apple app store or Google Play Store for Android offers up a number of property apps for NZ and a vast array of others for overseas markets. For NZ there are a few small operators who have taken advantage of the open API (access to the raw database) from Trade Me and produced mapping solution. Sadly these under a variety of names are best steered clear of, as they lack the functionality of the only two which are worth considering – Trade Me and Realestate.co.nz.

However before reviewing these two I would like to mention an app from the ASB that is so close to being great, but sadly misses the mark. The Property Guide uses the data feed from Trade Me to create rich content of listings, to this is added the QV data of legal description and government valuation for every property on the market. This is the only app that offers this valuable data and is the only single source of this data freely available on the web. The app though fails on almost every other criteria. The listings are often out of date. There are no contact details of the agents listing the property and so on. Maybe the app will improve, time will tell.

Trade Me and Realestate.co.nz are the trusted apps as they are the trusted property websites; their respective apps have been downloaded over 100,000 times and really hold the greatest value interest to buyers and investors.

Realestate.co.nz was first to launch an app for the iPhone in late 2010, Trade Me followed mid last year with its dedicated property app for the iPhone and iPad. Those with Android devices really only have the option of the Realestate.co.nz app at this time.

So which is better and what are the most valuable features on these apps that can save you time or improve your buying process? I have evaluated the two apps on these 3 criteria of (i) content (ii) ease of use and (iii) storing & sharing data.

Content is critical and both apps present as close to the full complement of listings on the market. Trade Me has the edge when it comes to property for sale as it features private sales as well as agent listings. When it comes to rental property Trade Me dominates with more than twice as many listings. However the important thing to note is that listings presented on map view comprise only those properties for which the agent has supplied an accurate address – no address, no pin on the map! At this time around 1 in 5 properties on the market do not have an accurate address. Given this issue is common to both apps, no advantage can be gained by either company.

Free Realestate.co.nz iPhone App - Realestate.co.nz-1-1.png

Ease of Use is vital for mobile devices given the smaller screen and lack of a mouse. Getting to relevant data fast is so important with as few a number of taps or swipes the better. In this regard Realestate.co.nz app scores highly. From the home screen one tap takes you to property “Near Me” showcasing property for sale within a 1km radius. This focuses the app entirely around the GPS capability inherent in the device and presents content in a map view as the default.

Trade Me on the other hand opt to default to a list view as per the website, and sadly lacks a “Near Me” option thereby requiring 3 taps to get to a map based view of property around you.

Both apps showcase individual properties equally well with full screen swipe gallery view.

Realestate app with open homes and new listings.png

An advantage again for the Realestate.co.nz app is that on the map view open homes are displayed with a distinctive blue flag separate from the red pin for property location. Additionally all new listings for the week are shown by a distinctive red flag, which highlights the newest listings – a very useful way to assess properties. Trade Me simply relies on a red pin for all listings.

Trade me Property Watchlist.png

Storing & sharing property information is at the heart of smart property searching and this would be the most critical aspect I would judge for the smart investor. In this regard Trade Me wins hands down. The app offers synchronization between the website and the app – save to your wishlist on the website and it appears on the app. Sadly Realestate.co.nz app offers local storage of favourites on the app but there is no synchronization between the website and the app. Additionally it is a little frustrating that properties stored as favourites on the app remain that way until deleted even if the property comes off the market – this is annoying as you end up with a lot of surplus data on your mobile device.

Despite this shortcoming the Realestate.co.nz app does have a useful feature called “Inspection” which is a notepad capability linked to each property. It allows for notes and photos to be kept for each property so when visiting an open home you can collate further information and especially those critical photos not included by the agent on the listing so you can review later on aspects of the property. I would judge this to be a great feature, but somewhat weakened because there is no means of synching this data to your home computer as an integrated file for each property.

Trade Me Property iPad app | Trade Me.png

When it comes to a choice between these two apps I believe that for the serious investor looking to use the app as an effective tool for property searching the Trade Me app is the better choice. I make this judgment purely on the feature of synchronization. I believe this is the single weakness of the Realestate.co.nz app. When you are searching property you want to be carrying with you at all times your portfolio of prospective properties with full information. Your primary search is likely to be in an office environment and you want this process to seamlessly carry across to your mobile device. So for me Trade Me wins for this functionality alone – it is weak as compared to the Realestate.co.nz app in many other aspects and I hope that they address this or maybe Realestate.co.nz app could hurry up and release a modification with synchronization.

This article is also published in the March edition of NZ Property Investor Magazine



Trade Me now free from the Fairfax shackles has significant upside potential

by Alistair Helm in


Investor Relations – Trade Me Group Ltd.jpg

This blog is primarily about property; the property market and real estate, although at times I allow my mind to wonder and consider and analyse related areas. This post is just such an exercise.

I followed with interest over the weekend the decision by Fairfax to sell down their remaining stake in Trade Me – in my mind a decision akin to “selling the engine to pay off the car loan" as I tweeted !

I think the winner is Trade Me, unshackled from its rudderless parents now free to demonstrate the online powerhouse it can be – the question though is how big could it be. Some of the recent articles have commentators pouring cold water on upside potential and sensing (judging) that its “trading position may not be so great”.

Now I should be very clear here, I am not a financial analyst, I do not own shares in Trade Me and I would not recommend, nor take anything I say hear as investment advice.

I do think Trade Me has a significant upside – the current share price is $4.02 as of today gives it a market cap of $1,591 million – a very healthy premium to the $700m Fairfax paid for the company in 2006. Some of the recent articles have speculated that the recent high of $4.45 back in late October giving the company a valuation of $1,761 million was a sign of the share price "running ahead of itself". I think in time the market cap could well exceed $2 billion in today’s money.

On what basis can I make such an assertion? I have simply looked at some benchmark companies in an area I know a lot about – real estate.

Trade Me Property is a very successful part of the company – it dominates the viewing of online property with over 1.5 million unique visitors a month and an average on sit duration of over 20 minutes. It's not a monopoly as Realestate.co.nz is very successful and holds a credible #2 position, however it would be a brave property seller in NZ today who did not ensure that their listing was on Trade Me Property.

Benchmarking the online property market is fairly easy and my two examples would be Realestate.com.au in Australia (Part of , well about 90% of the REA Group) and Rightmove in the UK. Both are listed companies and therefore publicly accessible information.

The Australian real estate market is more advanced in online than NZ, there around 30+% of media spend is online as compared to about 15% here, in the UK it is around 20% although the real estate market is less advertising focused as commissions are lower and this results in a lower media spend. Both of these companies are more succesful at EBIDTA margin than Trade Me delivering in the case of Rightmove 70% levels.

Using a very simple calculation method based on comparable populations and local currency conversion; the current REA market cap of A$2,289m equates to a NZ$557m real estate online business in NZ terms. Rightmove with a market cap of £1,523m equates to NZ$206m real estate online business in NZ terms. This reinforces the point made earlier about the powerhouse that REA is in the Australian real estate market. For this reason I have applied a weighting factor to arrive at a final weighted price for Trade Me with an up weighting of REA by 26% and a down weighting of Rightmove by 52%.

The table below summarises this data:

Trade Me benchmarking Dec 2012 #1.jpg

Whilst benchmarking, I examined two other specialist category sites in Australia, the listed Australian car trading site of CarSales.com.au and the recruitment site of Seek. Both are dominant players in their respective categories and thereby provides a category benchmark for both Trade Me Motors and Trade Me Jobs. Trade Me dominates the NZ car sales market, and is fighting a strong battle with Seek in the jobs market. The current market cap of CarSales.com is A$1,754m which equates to a NZ$427m car sales online business in NZ terms. I see CarSales.com.au as very similar in its sector as a benchmark to REA Group and therefore have developed an up weighting of 12%.The current market cap of Seek is A$2,343m which equates to a NZ$570m jobs online business in NZ terms. In principle whilst Trade Me is not as dominant as Seek in jobs there is no reason to down weight it's representation in evaluating a weighted valuation for Trade Me so I have up weighted it by the same 12%.

Now to determine how each of these sector specific benchmark companies contributes to an overall estimation of the value of Trade Me I have examined what I see as the current split of business between the core sectors of Trade Me – Property, Jobs, Cars and Classified / Retail. At this time I see the split as 16% for Property, 10% for Jobs, 29% for cars and 45% for classified. In future I see this changing. The future representation is also shown in the table below.

Trade Me benchmarking Dec 2012 #2.jpg

To come up with a overall calculation for the value of Trade Me I have taken the future split of business and applied this to the sector benchmark valuations to then come up with an overall valuation of just over NZ$2.3 billion based on the weighting. It's not the most scientific analysis but I think it is interesting.


New visual search for property uses Trade Me API for intuitive experience

by Alistair Helm in ,


Trade Me has launched a new visual search solution called Rummage. The website has been built jointly by Trade Me and two California based entrepreneurs Matt Inouye and Eugene Otto.

The site uses the open access API (Application Programming Interface) to present the content from Trade Me, focused entirely on images - very intuitive user experience.

This development has a number of strong components that really benefit real estate marketing. I see it as a strengthening of Trade Me’s position as the primary marketing platform for all forms of real estate in NZ. Here is my take on why I think this initiative is so relevant for real estate.

Images

Real estate is all about images. Yes location is all-important; but reflect for a moment as to the vast majority of user experiences when searching for property for sale or rent. First they establish their chosen location and then they browse properties – image by image.

This website cleans always all the extraneous material that at this browsing stage is just not relevant – no address, no “eye-catching” headline, no factual property information. People want to browse, they want to allow a veritable wave of ideas and stimulating images pass before their eyes to allow them to start to build a shortlist.

This however highlights in my view a couple of minor shortcoming in this initial version – you need to have a “save to watchlist” button. Additionally rather than a fixed a fixed image size it would be better to allow options for larger sizes. The responsive web design adjust to smaller screens but at the same time the large view on a 1680 x 1050 just looks cluttered with 6 across.

Search criteria

An unexpected benefit of the Rummage user experience is that it seems easier in some way to refine searches by styles of property. Whilst this functionality is available on the Trade Me Property site it somehow just seems more intuitive in this form.

How I experienced this is best shown by some of the most searched for styles and categories in real estate:

Coastal property

Villas

New Home

Pool

Platform

Trade Me has opened up their API and thereby their content for others to create solutions such as this new site as well as other sites and mobile apps. In so doing they are adopting and embracing the strategy of being a platform, rather than just a destination website. This is the new ambition of the leaders in digital marketing – platforms such as Twitter, Facebook and Amazon. Platforms are the new version of portals – comprehensive content allowed to be accessible wherever and whenever and in whatever device as required by users. Platforms are the big winners online.

All such platforms rely on a read and write API in this way they can as a platform strengthen the relationship with their customers -  in this case their key content customers being real estate companies and agents who seek to provide their listings on behalf of vendors with the largest and most targeted audience possible.

Rather than Trade Me having to build multiple solutions they merely have to be the core hub upon which the real estate industry relies for optimal marketing. In this way the competitive arena becomes less of a fight between two competing real estate websites, and more about a single specialist real estate website matched up against an aggregation of consumer focused solutions all pointing their enquiries back to Trade Me and on thereby onto the appropriate agent.


Online marketing is the new prospecting tool for real estate agents

by Alistair Helm in ,


Transient

The time honoured approach to prospecting for new business by real estate agents has largely consisted of door-to-door leaflets, local business networking, endless coffees and the ubiquitous press adverts comprising smiling faces alongside successful sales results.

Today - more and more the power in prospecting is online and the leading property portals around the world are reaping the rewards as they deliver just what agents want – sellers.

I came across the excellent, simple and highly effective advert from Zillow in the US which succinctly ‘sells’ their Premier Agent service, which provides a profiling of agents as a prospecting tool.

Here in NZ there are just under 9,000 active agents. All of them are self-employed contractors who whilst operating under the banner of their chosen branded company are solely motivated to become the most successful agent in their chosen geographical area. This hyper-competitive environment is what keeps on attracting people into the profession, yet it is also what makes real estate so challenging for new entrants. This has been the rich harvesting ground for the print media for the past decades and now become the cash generating machine for online property portals as the last of the print media for real estate finally dies.

Building a profile is tough as a rookie agent, as is it is for an established agent competing against all the noise of rookies trying to raise their profile.

It reminds me of a piece of advice I heard back in 1995 when I was first investigating this industry and undertook the real estate salesperson course at the time.

I was told that there wer three things you needed to be a real estate salesperson:  (i) the money for the course – c. $1,000 at the time (ii) a car to take people around to see houses and (iii) a house. This last requirement was nothing to do with a home-office, and everything to do with the fact that if you could not generate any leads in the first couple of months, you could always list and sell your own home. Not to save the sales commission fee, but to be able to then showcase that you had a listing – and thereby demonstrate achievement of the first rung on the ladder!

This new online profiling tool is being marketed in NZ on realestate.co.nz as the featured agent service which places an agent advert adjacent to the listing result – spend enough with the company and you also get a photo adjacent to all your listings – why is it that real estate is one of the few industries where everyone is driven by their image, on the business card, online etc?? (a question for a later post I suspect).

In Australia the leading site of realestate.com.au has grown a business nowadays turning over in excess of A$250m from advertising of agents and listings with a company solely focused on online real estate valued in excess of A$2 billion.

It is clear that all types of real estate marketing, albeit property related or agent related is moving online at a pace so clearly it begs the request that the last to advertise in the newspaper, please switch off the machine!