Good Blub

10.51am: Property advertiser realestate.com.au is facing a serious challenge from real estate agents in Melbourne, where 300 agencies have appointed a third-party representative to bargain collectively for fairer ad prices.
In a move which is set to be rolled out in other capital cities in coming weeks, 62 real estate brands with a total digital ad spend of more than $100 million a year, have appointed a single media buyer to negotiate better rates on their behalf. The initiative is the most co-ordinated move from agents reacting against successive price rises at REA. For weeks, property experts have warned successive price increases in REA’s ad costs will eventually spark a mutiny among agents.

REA is the owner of realestate.com.au, and controls more than 61 per cent of the online advertising market for real estate.

The group incurred the ire of the industry in May with a new pricing structure that involves steep hikes for many agents at the end of 10 years of successive increases.

Documents obtained by The Australian Financial Review reveal Century21, Kay&Burton, RayWhite, hockingstuart, MarshallWhite, Biggin&Scott and 62 other large-scale groups have signed up to the negotiating venture, which will be known as Real Estate Digital Marketing Services (REDMS).

REDMS spokesman Anton Staindl told the Financial Review the venture is out to bring a fairer, more equitable and stable trading environment for agents, rather than attacking one player in particular.

“Real estate agents have been subject to inexplicable advertising price rises by some media suppliers that are threatening to undermine the ability of agents to represent their vendors effectively,” he said. “Agents are relying on our organisation to contract a professional media buying agency to be able to negotiate on our behalf as a collective . . . We are very confident that combined, the agents pack a far more powerful punch than they do as individuals,” he added.
REA shares are 2.1 per cent lower at $42.59.