Nestoria Blog

In this month’s Nestoria interview we have the pleasure of speaking with Simon Baker, author of Property Portal Watch and ex-CEO of REA (owners of major European portals - and Nestoria partners - PropertyFinder and Casa.it, amongst others). He is director of 3eep and Redbubble, and Chairman of Arts Hub. In his free time Simon also writes MyCEOLife, a blog about the challenges of being a jet setting CEO.

Simon, great that you could make the time to chat with us.

1. What are your goals with Property Portal Watch?

The vision for Property Portal Watch is to create the go to destination for information about property portals around the world. The site will provide overviews, news, analysis, gossip and more on portal sites, the companies that own them and the key people in the industry. The audience we are targeting are the property portals themselves, industry players, analysts, media, investors, as well the agents themselves.

We believe that we can make Property Portal Watch successful by leveraging the in depth knowledge, relationships and experience that helped build the REA Group and as we gain momentum, we plan to offer additional products and services to the market.

2. In many countries in Europe there is a dominant local number one: (Rightmove, ImmobilienScout24, Fotocasa). While at REA you seemed to pursue a multi-country strategy, investing in PropertyFinder and Casa.it. What advantages does a multinational strategy offer?

When I was running the REA Group, it was clear that a multinational strategy had a number of benefits.

First of all, being the market leader in one country can be very profitable, therefore if you are able to purchase or create the market leader in a number of countries, then your long term profitability will increase. Also, by being in multiple countries, you can de-risk the business in terms of single market failure risks. We adopted a portfolio approach to this with countries in established and emerging markets.

Secondly, I believe that there are some benefits that accrue from running multiple sites. These include scale efficiencies in technology (build one and use many times) as well as scale efficiency in marketing - in particular in the offer that you make to an agents and you can say “give me your listings and we can publish them on the UK’s #2 site as well as a network of 10 million home buyers and investors globally”. It provides a clear point of difference to the singe country players.

3. As someone watching different markets around the world what trends do you see emerging? What evolution will we see in the market in the coming 12 months?

There are a number of major trends that I think will occur over the next 12 - 24 months:

Firstly, the professionalisation of the property portal industry will improve. Now what do I mean by professionalism? At the moment there are hundreds of sites out there offering a vast range of advertising products and services to agents. However all the marketing of those portals is based on their owns stats and usually stats that sound big but are meaningless to an agent. Therefore I think that independent online property tracking services will emerge that provide agents with cross portal comparisons of their marketing spend efficiency.

Secondly, as agents understand more about their marketing efficiency (ie where their leads come from) they will redirect more and more of their spend in that direction to the detriment of the papers and to some of the smaller portals.

Thirdly, I also think that the list for fee, pay for upgrade model will faulter as agents struggle with the concept and the sites therefore struggle to make any money. Some will be purchased by the bigger players and integrated into a paid offering.

Finally, in markets where there are a number of paid sites (like the UK) there will be consolidation as financial pressures force traditional foes to talk and merge.

4. What are our thoughts on the innovation in the property search space in the last 1-2 years, particularly in relation to pure aggregators like Nestoria?

The property search space is still in its infancy and I believe that many new models will be tried over the coming years - while some will succeed, most will fail.

The types of innovation I think we will see are:

1) Better and more intuitive interfaces for consumers that really make sure that they get the right search results. This will become more and more important as the number of listings sites have increases.

2) There will be innovations in the underlying advertising models and as agents become more and more web savvy, they will increase their investment in the models that deliver the results. I still think it will be a pay to advertise model - just not sure if it is CPM based (straight advertising) or more pay for performance.

Thanks very much Simon. Interesting views from someone with keen insight and international perspective. As a service that partners with 30+ property portals across Europe, we here at Nestoria very much welcome the move to increased efficiency and rational measurement of marketing spend in the market.

past Nestoria interviews: Tim Youngman, Jesus Encinar, and Ivailo Jordanov.