Takeaways from the Global Online Classified and Marketplaces Summit in Miami: 3 Key Trends Shaping the Online Classifieds Industry

Takeaways from the Global Online Classified and Marketplaces Summit in Miami: 3 Key Trends Shaping the Online Classifieds Industry

As we build transactional verticals in the new-home space and work with leading classifieds helping them increase monetization from this segment, it is critical for us to stay on top of the most important trends impacting the classified and online real estate industries. In June 2019 we visited the annual gathering of key online classified players at the Global Online Classified and Marketplaces Summit in Miami.

The conference gathered over 300 representatives from around the world. CEOs from auto, real estate, job industries discussed the latest event alongside customer and technology trends impacting the industry.

In case you missed this great event, we would like to share with you what we believe were its 3 key takeaways:

1) The online classifieds industry is entering the “midlife crisis period” – searching for new meaning.

With the pay-to-list model foundation being shaken by performance players, the industry is facing some tough questions: “Who are we? Are we in advertising playing vs Google and Facebook? Or are we in the transactional game playing against our own customers? Where do we fit in the value chain? Are brokers our clients, enemies or partners?”

Seems like everyone in the industry agrees: the evolution of online marketplaces is only at its early stages. The early model of “classifieds” where people could pay to list their inventory online for a fee is a thing of the past, though. The future is in facilitating transactions, but that requires new skillsets, new tech and a lot of focus. Many questions remain unanswered but one thing is obvious: online classifieds need to do a quick soul-searching before they are disrupted. Which is why it seems:
– Big global media groups are spinning their online marketplaces out into separate, focused entities. The last example being Schibsted splitting off Adevinta as a separate entity combining most online assets of the group.
– Nearly all big classifieds groups talked about “a path to a transaction”. OLX, Schibsted, eBay and others mentioned that their goal is to go transactional or even become “fully transactional” across all of their platforms. That includes jobs, cars and last but not least: real estate.

2) No more discussions on whether to do transactions. The race is on… The big red countdown clock on the wall is ticking loud…

Seems like we are past the “should we move toward transaction” discussions, which were the leading topics of the conferences over the last 3 years. Apparently, the conversation has shifted from “if” to “how” and “how can we do it faster than others”. And while most companies have their in-house “transformational projects” going, changing the core nature of a big organization is not easy. This has fueled and will further fuel M&A activity. Established players are looking for companies that could provide a short-cut towards more performance and transactional models. The latest examples include:

– Axel Springer making a bold move of going against their current user base and investing in Purplebricks.
– OLX investing in a new-development, lead generation focused South-American player – Properati.
– Adevinta establishing its investment arm and investing in a Scandinavian e-buyer, which plans to expand across other markets.

3) There is a rapid search for new skillsets

Multiple speakers of the conference evaluated the fact that the skills required to create a pay-per-listing player are very different from those needed to move to pay-per-action models, which are “foreplay” to transactions.
There is a growing need for know-how related to:
– Lead tracking
– Lead quality measuring
– Lead delivery systems
– AI-driven valuations which are the key capability needed to move into an e-buyer model

For the first time within these conferences, we hear about… lead reutilization. To us, this was a critical topic as earlier classifieds very often held that their role finishes at the moment a user leaves a lead. With the new transactional mindset, the understanding comes that the lead generation moment is just the first step on a long road leading to a transaction. Classifieds need technology capable to measure:
– Was a call successful?
– What did a user do after lead capturing?
– How was a lead handled, and what should a classified do after that conversation?

It will be extremely interesting to observe this trend as we believe this will result in a growth of a huge industry of know-how and plug-n-play solution providers who allow others to solve these issues without building their own solutions.

To sum up: this is a fascinating time for the industry. A number of global trends have pushed the classifieds industry into a search for greater value creation. Seems like some players will find a way to rapidly shed the comfortable “pay-to-list” models and move to defendable transactional verticals, while others won’t make it in the new reality.

Rumor of the month: how long before OLX and Adevinta merge? 😉