No penalty for agents returning from OTM says portal chief

The chief executive of Zoopla has pledged that there will be no financial or other penalty exerted on agents who return to the portal having tried OnTheMarket.

In a question and answer session for Estate Agent Today and Letting Agent Today readers, Zoopla boss Alex Chesterman says: “We price based on performance and charge according to the value that we deliver to our members. We do not have a policy of penalising any agents who chose to leave and then return.”

However, he says long-standing members have always enjoyed loyalty discounts and other benefits, which would remain the policy.

In the online Q&A, which can be seen here, Chesterman also justifies portal charges.

Whilst saying that he understands the frustration over “perceived high price rises” by portals, he insists they remain good value. 

“Our average fees nationally are around £350 per month. Our average customer advertises around 50 properties to our audience of over 40 million visitors every month. That works out to around £7 per property per month” says Chesterman.

“The average property spends around three to four months on our platform, which is about £25 for the lifetime of each property advertised. In the context of traditional print media costs or any other means of exposure, I would argue that this is incredible value.” 

He says portals have also helped reduce overall marketing costs for agents over the past 10 years, particularly for those who have reduced or abandoned print advertising. 

“I do accept that portal fees have risen quite fast, but understandably from a very low base. One of the hallmarks of the digital revolution is how fast digital platforms have replaced traditional mediums. Portals have emerged from nowhere a decade ago to now deliver the vast majority of leads” says Chesterman.

Yesterday the financial consultancy Jefferies said it was upgrading its full year forecasts for Zoopla based on additional business generated by the portal company’s acquisition of price comparison website uSwitch and by an increase in Zoopla estate agent members.

“Zoopla member numbers continue to increase. Membership trends reported at the half year continue, the Group is therefore increasing its number of members, which suggests to us that the threat of On The Market continues to wane” according to a note to investors by four Jefferies equity analysts.

“In our view, OTM continues to make a lot of noise in the trade press, but it is often that empty vessels make the most noise. Despite the noise we have not seen OTM reporting actual member numbers for some time, which suggests to us that its bark is worse that its bite” says the note.