Purplebricks spends £382 per instruction on marketing alone

Purplebricks has spent £26.7m on marketing in the past year - that represents £382 per instruction. 

The figures, revealed in the agency’s 2019 annual report, represent the firm’s marketing spend in the UK alone and does not include its activities in Canada, where it continues to trade, or in Australia or the US, where it has shut its doors.

The overall marketing spend in the UK in the most recent financial year (£26.7m) represents a 24.8 per cent rise over the previous 12 months; the cost per instruction for 2019 (£382) is £50 more than the £332 reported in 2018.

According to a statement in the annual report from chief financial officer James Davies this surge in marketing costs “reflected an unsustainable level of marketing spend from several online competitors along with substantial reductions in commission from traditional firms necessitating a higher than normal level of communication of our value proposition in a shrinking market.”

He says overall marketing costs are expected to fall over the course of the full year 2020.

Elsewhere in the report, in a description of the Purplebricks business model, the company says: “Marketing has always been a central element of the Purplebricks strategy. We are committed to creating marketing programmes that engage with consumers to want to book a free valuation from Purplebricks and ensure that our messaging is clear and transparent. We work hard to develop and grow our brand and have made good progress, with our UK prompted brand awareness at 96 per cent.”

It continues: “In [full year] 2019, we continued to evolve our ‘Commisery’ campaign focussing on the misery a person feels when they have paid significant commission and have got nothing more for it, taking the message further across more channels. Going forward, we will focus more on customer service outcomes to demonstrate greater social proof of our offering.”

The annual report relates to the period up to the end of April this year.

Since that time Purplebricks has ditched its ‘commisery’ advertisements - which started back in December 2016 - and now features the claim ‘You’ll be totally sold’.

Gemma Schmid, head of brand marketing and communications at Purplebricks, says: “The next stage of our growth is to champion the positive experience of our customers. If home-sellers have any doubts about the quality of our service, the testimony of our customers speaks for itself. Commisery has catapulted Purplebricks into the estate agency mainstream over the last three years and made us famous for challenging the outdated commission model.”

It is also widely anticipated, as a result of an interview with the Press Association given by Purplebricks chief executive Vic Darley, that the agency will announce it is moving away from its fixed-fee model of £1,399 in London and £899 elsewhere.

You can read the full annual report here.