2letservice - Performance Review and Future Prospects

The Statistics: In the year 2007-09, 3 million hits per month on 2letservice and Real Estate Times.

The promoters: Preferred not to be disclosed, but are involved since its early days.

The History: 2letservice was conceived by SolutionPoint in 2003 and made online in 2004 - it has soon became the most visited property listings site in India - leading online marketplace for real estate brokers, agents, buyers, and investors to sell and buy property. The focus was on commercial real estate market comprising office, industrial, retail, multi-family and land for development.

The property market in India was mostly dependent on local newspaper advertising and dominated by a few big companies who know the buyers and the sellers. The market is still not very transparent to all. After a few members joined, we pitched the site as the largest Indian real estate portal on the net (it was true at that time). 2letservice.com is a best example of user generated content and data business. All the property listings on 2letservice.com are generated by members.

Free Listings model that fit market need: 2letservice.com was the first and only free listing site, while competitors went with subscription, listing fee, or cost per lead or performance business models. 2letservice.com allowed property owners and buyers or tenants for self-matching. It was a significant move to acquire a strong user-base in an online real estate advertising market worth billions of dollars.

A Unique Community Approach: Unlike other portals, who follow the dealers and builders (Like Bees To A Honey Pot), 2letservice.com has decided to stick to real buyers and sellers, entering the online real estate market with a strategy to minimize the need for highly infamous and politically-motivated breed of local dealers/agents for home buying/selling process and centralize the fragmented realty market in India.

We collected more information from consumers during the user registration process, which resulted in a better ability to target listings to consumers and exceptional conversion rates. 2letservice.com has since refined the user registration process, delaying the collection of certain pieces of information to later in the process. The lengthy user registration process was justified as collecting such information can improve the value to the user significantly.

Brand Promotion and Marketing Approach: 2letservice.com spent less money on traditional marketing, instead relying solely on search engine marketing (with strong presence on Google, Yahoo, MSN, ASK, etc). A key success factor was the role that 2letservice.com’s promoters played in promoting the portal. By having access to home listings from owners across India, 2letservice.com was able to open many markets. Having some listings to start with in a market enabled 2letservice.com to target consumers via SEM to those listings. Thus a key differentiator in 2letservice.com’s strategy was to open multiple markets quickly rather than wait to build critical mass in one market before opening another.

Our offer of brand advertising + performance media + paid ads is unique. We’ve positioned 2letservice.com as a broadcast TV network, with the online publishers and advertisers playing the role of cable, making it a new hit network show – a chance to create buzz and make a meaningful impact on millions of people at a time. The property listing portal has emerged as a powerful and efficient opportunities in housing market. The reach and impact is impressive, whether judged against online or offline ad opportunities. The strength of online real estate is reflected by the heavy spending in the category by the big players. As per various reports, the property vertical market will continue to grow, and so will 2letservice.com.

The Revenue Model: 2letservice have two categories of online advertising inventory and revenue generation sources:

1. Branding for Impact, high-priced banner inventory, such as home-page ad placements and large in-page ad units. Rich media is utilized, and frequency is often capped. This form of ad is attractive for brand advertisers. But for direct response marketers it is cost-prohibitive on a strict cost per action (CPA) basis.

2. Performance Media – High-frequency, lower-cost remnant inventory that can be targeted for optimal performance. This inventory category can resemble an auction model, like search, where advertisers bid for inventory in terms of multiple listings, hot listings, popular listings, text ads, etc.

The rising popularity of user-generated and peer-delivered content, and new ad revenue sharing models, amateurs and professionals are now creating advertising content that is arguably as appealing to consumers as versions created by professional agencies. This trend will continue – user-generated content (UGC) sites like 2letservice.com were the top destination for viewing online content. Established players like magazine publishers and broadcasters, are partnering with advertisers to develop strategic marketing campaigns for 2letservice.com – taking on traditional agency functions and broadening creative roles.

About Competition: We're skeptical about the new upcoming business models, maybe superior, would not be enough to overcome the SEO/SEM advantages of the current market leaders (like 2letservice) or the brand equity of the offline players now emerging as strong competitors (like SolutionPoint, Real Estate Times, Times Group).

The Future Strategies: A key focus of 2letservice.com in months and years to come will be the integration of search with other digital marketing efforts and strategic partnership with related brands. This is driven in large part by the need to better understand the true value of real estate search. To make smart planning decisions, we need to be able to evaluate display media, search, e-mail and website messaging through one consistent analytical lens.

Exit Options: The valuation metrics are all strong from any perspective. 2letservice.com has to fit well into the future owner's push into the online advertising market. 2letservice.com is not only a good consumer brand, but also has a stable, loyal install base of members providing the listings. Most interesting about 2letservice.com is the implementation of pay for performance model that really made sense for the community. Many web companies today are trying to implement pay for performance models assuming that they are superior without truly understanding the value chain and market dynamics in an industry – it is important to give your model careful consideration, because in the 2letservice case it took some time and perseverance to prove successful.