OnTheMarket has ‘puncher’s chance” of overtaking Rightmove

OnTheMarket has a “puncher’s chance” of displacing Rightmove after the challenger portal was taken over by CoStar but needs to persuade the public as well as agents, an industry analyst suggests.

US residential giant CoStar acquired OnTheMarket (OTM) last year and has promised a large marketing budget.

It has a track record of pushing up the market share for portals in the US and new analysis by Online Marketplaces has assessed if its success can be replicated in the UK.

Edmund Keith, of Online Marketplaces, suggests the thing that OnTheMarket has always needed the most is brand awareness and traffic.

He said: “Like many portals around the world whose traffic numbers are lower than their rivals', OnTheMarket's PR line has been that its audience is more engaged and more likely to convert to high-quality leads than that of its competitors. It's a line that only goes so far.”

However, he warns that another challenge is convincing agents not to list on Rightmove.

He added: “The talk of high-intent users doesn't make it into living rooms where agents are having conversations with the most important stakeholders in any property sale, vendors.

“Anyone selling property in the UK will want to see their listing on Rightmove because Rightmove is where the traffic is. OnTheMarket will fail if it can't change that.”

Keith highlights that there is a “collective dislike” of Rightmove among some agents, but suggests this “won't turn the tide” and OnTheMarket is actually more likely to have success by taking Zoopla’s market share.

He said: “When OnTheMarket adopted its controversial and ill-fated 'one other portal' policy in 2018, the portal that lost out on listings was not the market leader but rather, Zoopla. That suggests that the main victim of OnTheMarket's new sales and marketing war chest is likely to be the number two portal rather than the market leader.

Keith suggests one scenario where Zoopla’s US private equity firm owner Silverlake considers a reduced sale price if its market share is dented. 

Keith said: “If consolidated, Zoopla and OnTheMarket would be a formidable opponent for Rightmove to have to deal with.

“Equally, there is a scenario where CoStar fails to transfer its success across the Atlantic, can't find other attractive acquisition assets to support its mission and goes home with its tail between its legs.

“The history of the real estate portal industry has a lot more examples of cross-border failures than successes and some such as the AIM Group's Principal, Johnathan Turpin think that Florance and CoStar are ‘underestimating the challenges’ of competing in a European environment.”

The analysis suggests OnTheMarket has a “puncher's chance” against Rightmove, adding: “But until it has a good reason why the British public would use its website instead of Rightmove's, its marketing budget won't make a dent.”