There is nothing more certain than prices rising every year. Whether it be petrol, groceries or clothes, prices are always rising. Some prices rise more than others and the change to a pay per listing model with realestate.com.au means that most agents will see a significant rise in their total subscription cost. But is this the only shock delivered by realestate.com.au this year.
Realestate.com.au will argue that their increases is only to bring their cost inline with the value they offer. Many agents will argue that their prices rises have risen are essential price gouging . Essentially we have the perpetual customer versus shareholder discussion that many large companies face and we have had we have covered our fair share of it at Business2 over the years.
Even though portal staff don’t post here officially we have always had our share of shareholders and other associated identities stop by to provide their opinion and comments as a counter to the majority.
As a public company analysts around the country are always looking to the future so they can provide the typical buy, sell or hold recommendations to clients. They have better and higher level contacts within these companies than the public or customer base does and these reports often provide a great insight into where the company is heading.
A recent report released by Bell Potter Securities on the REA group raised some interesting details that if come to pass should concern agents around the country. Firstly about prices, in that report it states that:
“REA looks to hikes prices aggressively”
Given the massive year on year prices rises that is probably not much of a shock to any customer however the next section might be.
“Additionally we believe REA will look to cross sell real estate leads to adjacent verticals: telcos, pay-tv, banks, insurance, utiltiies, moving to generate additional revenues.”
Cross sell real estate leads??
Realestate.com.au have been selling ads on emails, enquiry forms and just about anywhere they could shove an ad but this seems to infer it will be the lead itself that is sold on to other parties. The name email and phone number of the enquiring party. There is no question at all that this information is valuable but is is theirs to sell?
This is going to be interesting if it happens but the privacy concerns are going to be high. I think its reasonable to assume that a buyer expects their enquiry is a private communication between themselves and the agent on the property listing. They do not believe that they will be contacted by all these other companies.
Now they can do this transparently with tick boxes at the bottom of the enquiry form or they can hide their authority in a revised terms and conditions on the website. I actually dont have a problem if they transparently have tick boxes (unticked by default of course) on an enquiry form but realestate.com.au have not had a problem doing this sort of thing in the past. They have form!
To sell information to RPData they added the following clause into their terms and conditions “by using the Service, you grant us an irrevocable, world-wide, royalty free licence to commercialise, copy, license to other persons, use and adapt for any purpose any material you generate or submit to make use of the Service.”. We covered this back in 2008 on Business2
If the right to pass on leads is not open and transparent this is going to cause some real concerns. Many agents earn referral fees or commissions from these types of companies so that income is potentially threatened. As agents in Queensland (and I assume most states have similar requirements) we have to fully disclose to buyers any commercial arrangements we have with these sort of companies so the potential for confusion is going to be high. In some cases the agent may cop the blame for passing on the private information when the truth is we were not involved.
This is pure speculation at this stage and it is important to note that this has not been confirmed by Realestate.com.au yet.
Lest us know what you think?? If realestate.com.au does start selling your leads to finance companies, telcos, utility companies and others how will it effect you?
6 Comments
Alistair Helm
An alternative view could be that they will build more integrated partnering for associated services on the site and app – it is not clear that email is the carrier form.
Glenn Batten
Alistair, you are right, without any more details it is hard to be certain but the use of the words “cross sell real estate leads” combined with how they onsell listing data now makes me think that we are talking about pre existing enquries. But “cross sell” could just as easily suggest they will provide offers to those visitors. Upsell them by asking “do you want fries with that”. I am guessing that the opt in rate would be low.. and dont understand why would an analyst see that as a potential factor in an aggressive revenue growth. ? Time will tell.
i personally have very little issues with them trying to convert visitors to leads by offering those services. I would rather that than the massive levels of advertising on the site that exists at the moment.
Glenn
They have to increase revenue or heads roll so everything is on the table.
If they try to sell email contacts from enquiry to agents they would be running a risk without full disclosure.
Merely placing a tick box on the form wouldn’t cut it in my opinion, any permission such as that would have to be made VERY clear to comply with the spirit of the law, I would think.
Vic
Nothing more certain than YOU, the agent, will be blamed by your clients for passing on the info. After all it is YOU that they gave the info to.
This is must be a real concern and agents associations should get on the front foot to make sure REA does not go down this track
John Stevens
Are you able to share the report?
Glenn Batten
I need to find out if it is a paid subscriber report or if it is for the public. It was shared with me but I cant post it here if it is not a public document.