The UK property market is on the brink of a seismic shift. Recent news that Rightmove could be the target of a takeover bid by Australian listings giant REA Group, hard on the heels of US behemoth CoStar’s acquisition of OnTheMarket, signals a potential power struggle in the online property portal space. For estate agents across the UK, this could be a moment of reckoning.
The mere hint of REA’s interest in Rightmove, fuelled by its majority ownership under Rupert Murdoch’s News Corp, has already sent Rightmove’s shares soaring. If the takeover materialises – and the clock is ticking, with a deal required by the end of the month under UK takeover rules – industry dynamics could shift dramatically.
We could soon see these giants battling it out for the top slot in the portal market, which might seem like a win for agents hoping for more competitive fees. However, this potential battle for supremacy could have deeper implications that go far beyond mere portal charges.
What isn’t being discussed – and what could have an even more profound impact on the industry – is the increasing cost of digital advertising, driven by these same portals’ relentless quest to dominate search engine rankings. For many local agents, the cost of competing in this digital arms race has become almost untenable.
At Spicerhaart, we’ve crunched the numbers across our seven UK-wide estate agency brands, and the results are alarming. Running a Google PPC (Pay-Per-Click) ad campaign is now costing us a staggering £184 per booked valuation. In some regions, that figure balloons to an eye-watering £441 per valuation.
Simultaneously, portal costs have soared, averaging £268 per valuation. Not only are these portals monopolising our data, but they’re also outbidding us in every direction. It’s become a situation where we’re effectively being forced to compete against ourselves.
This unsustainable landscape has forced us to re-evaluate our marketing strategies. While digital has long been hailed as the future, the escalating costs and diminishing returns have led us to revisit more traditional methods.
In a surprising twist, we’ve found that one of the most effective returns on investment in our current marketing mix comes from an age-old strategy: direct mail. Contrary to popular belief, direct mail isn’t dead. In fact, it’s thriving when executed correctly. We’re running a campaign where we identify potential buyers’ needs – always with their consent – and target properties in the desired areas to see if homeowners are willing to sell.
The results speak for themselves. A bulk mail shot costs us just 22 pence per letter and has generated over £280k in net profit in just two months. Such success would have seemed unthinkable just a few years ago, but it underscores a vital point: direct mail carries a personal, human touch that digital often lacks.
This isn’t to suggest we abandon digital marketing altogether. Our proprietary FLINK software, for example, generated over 1 billion impressions and attracted more than 15 million clicks last year alone. Digital platforms remain a crucial component of our strategy, but they must be balanced with more tactile, personal forms of outreach.
As we navigate an increasingly AI-driven landscape, my biggest concern is that we’ll lose sight of what initially attracted clients to our brands: authentic connections and trust. The industry needs a broader discussion about the spiralling costs of all marketing channels – whether digital ads, portals, video content, or even traditional billboards.
In the midst of these changes, I’m reminded of the importance of simplicity. Sometimes, the most impactful strategies are those that reconnect us with our roots. That’s why, despite the digital noise, I’ll be placing a humble “For Sale” board in the ground – a small but powerful reminder of what truly matters: building genuine connections with our clients and communities.
As we face the future, let’s not forget that the most effective marketing strategies are often the ones that bring us back to the basics, where the focus is on people, not just profits.
Paul Smith is executive chairman of Spicerhaart
Rightmove shares surge after Murdoch-owned rival considers bid
