Leading real estate portal Commercial Property Guide is breaking new ground in its field by introducing an optional pay-per-lead advertising strategy.
The move gives commercial agencies a choice of paying either per lead generated by their advertisement or staying with the traditional model.
“This performance based referral model gives commercial agencies a chance to avoid upfront costs of lead generation. They are not paying for the advertisement itself,” Mr Rose said.
What is the inspiration behind Commercial Property Guide’s concept?
Inspiration for the concept came from Mr Rose’s experience working on the establishment of carsales, when selling products via the internet was new, unknown and treated with suspicion.
As a result selling ads was enormously difficult, but it was the pay-per-lead model which attracted advertisers on board and proved the winning ticket.
“There was an initial push back from car dealers but they came around to love the idea, and so we decided to do the same here and give commercial agencies an option.” Mr Rose said.
What are Commercial Property Guide’s target?
Commercial Property Guide aims to have 30% of agencies on the pay per lead model.
Information acquired from the pay-per-lead advertisements will further be used to help the company continue developing a range of unique artificial intelligence tools with which it aims to provide the most accurate analysis and in-depth industry insights available.
Commercial Property Guide recently received two innovation patents for such tools – one for an extraction process for an asking price index and another for a time on market analysis tool.
Both were developed from geographic commercial property data collected and analysed over the last years.
“Our team has been working hard on research and development. Our ultimate goal is to uncover insights that reveal trends in commercial real estate types and locations at a level of depth and detail that hasn’t been achieved before,” said Mr Rose.
“Decisions across many industries are increasingly based on machine learning and commercial property will eventually follow suit. At the moment our industry, is only in the early stages of digitisation and still off-line. But this will change.”
“Our mission is to understand the different world that we are now entering from a commercial real estate perspective. We want to be the leaders in providing both property seeker and commercial property industry player the best and most informative unique insights.”
Long term, the company foresees the combination of data analysis and machine learning to create its patented tools will give it a distinct competitive advantage.
The team have achieved their aim, with Commercial Property Guide having near equal access to commercial properties listed for sale or for lease as its giant competitors.
In only a few years the independent company has closed in fast on competitors. Commercial Property Guide’s portal now carries just over 70% of the volume of commercial listings as those of the two major media giants News Corp and Nine Entertainment.
The website has seen consistent and organic growth.
Profits are poured back into business expansion, a stark contrast to the massive capital raisings common among proptech start-ups, and revenues continues to grow steadily as real estate agencies become more aware of the independent portal’s market effectiveness.
Mr Rose said the idea for the website arose when they examined the competition.
“We could see that the media giants News and Nine were the only ones in this space and charging what we thought were very high prices. We decided we could provide the same with much better value for money – and we knew that building our web traffic was key.” he said.
“The market leaders should be fearful as there is no economic moat (the term describing a distinct advantage a company has over competitors which allows it to protect its market share and profitability) protecting them from further market share erosion,” Mr Rose said.
“Commercial Property Guide is always outnumbered but never outgunned. As with the leading commercial property portals, Commercial Property Guide is used by mainly infrequent commercial property seekers who use Google search.”
“Commercial Property Guide appears prominently in the top half of Google page one searches along with the market leaders. Success in Google Search is not a quick fix solved with large amounts of cash. Google search prominence requires a lot of patience in credibility building.”
Commercial Property Guide knows it has the attention of the media giants who have used zombie websites such as Commercial View (acquired 3 years ago) and All Homes (a long way from its Canberra home) to defend their Google organic ranking positions.
“We’re sure they see their new rivers of gold are potentially under threat. We feel our growth and stability is remarkable compared to challenger portals to Commercial Property Guide as it is the number three player in residential,” Mr Rose said.
“Typically many of these publicly traded companies have churned through $40 million of shareholder funds and are still to show signs of a sustainable ongoing business.”
Simon Rose is chief executive of independent property portal, Commercial Property Guide. Simon started his career at carsales.com.au in 1999.