REA needs to embrace print media and watch out for competitors: Ted Pretty

The REA Group needs to embrace print media, stop competing with majority-owner News Ltd for advertising clients and expect fiercer competition from both online and print competitors, says former senior Telstra executive and RP Data board member Ted Pretty.

In a letter published in Australian Financial Review, Pretty hit back at critical remarks made by REA Group CEO Greg Ellis about the decision by Fairfax, owner of REA’s nearest online rival Domain, to buy 50% of Anthony Catalano’s estate agent industry-driven The Weekly Review.

“When Greg Ellis, CEO of online real estate ad company REA Group says Fairfax’s acquisition of The Weekly Review is frankly beyond him, he is absolutely right. Ellis is a solid guy, but we all learn the hard way that hubris can lead to mistakes,” writes Pretty.

“For real estate unlike the jobs, travel and dining verticals, there is a strong case to be made for a bundled offering of online advertising with high-quality regional/local print, particularly when the local agents own a chunk of the print.”

Petty was group managing director operations at Telstra between 1997 and 2005 and also sat on the board of RP Data Ltd for six years between 1996 and 2011.

He currently sits on the board of Dubai-based Real Estate Investment and Development Information Network, which offers online real estate information services to estate agents in Dubai.

“While it is true that the traditional classifieds are dead, the glossies are not. Property is our biggest asset class and deserves more respect,” he writes.

According to Pretty, REA’s “Achilles’ heel” is its “seemingly unwillingness to embrace its brothers at News to ensure its franchise is unassailable in the long term”.

Pretty expects REA to face challenges as “Fairfax’s Nic Cola seeks to outspend them on advertising the Domain brand… Michael Hannan’s Homehound site is expected to re-emerge with a print strategy, and OntheHouse is enjoying a return to market favour and quietly building its online reach for modest cost.”

He also says the market should also watch out for the “Ray White family’s next steps” – Sam White recently stepped down as a member of the REA board.