Australia’s leading real estate media and services business, the Domain Group, has undergone a dramatic transformation from a print only real estate classifieds business to a high growth, multi-channel real estate media and services business.
As recently as five years ago, 80% of Domain Group revenues were generated in print. Today, 80% of revenue is digital, and the growth curve is impressive, with group revenue up 56% in the current year.
Domain Group is the Real Estate Media Division of Fairfax Media, and runs a number of real estate print sections and magazines in various markets as well as a leading online property portal, property data businesses, and a real estate CRM business.
Fairfax Media is, of course, Australia’s oldest publisher, with a 180-year history and three of Australia’s most powerful mastheads: The Sydney Morning Herald, The Age, and The Australian Financial Review. The business was funded by the so-called “rivers of gold” related to classified advertising, of which residential property is the largest segment.
Clearly, the advent of the Internet dictated that the print model had to change.
It was a small but significant start when we put all print listings online about 15 years ago, giving us a strong position in Sydney, Australia’s largest property market, and a competitive position in Melbourne, the second largest market. While this gave us a digital platform to build on, we continued to run print and digital separately for 10 years.
The change process really accelerated five years ago, when we recognised we had a “burning platform” in print and we needed to act quickly.
We put digital natives in charge of the integrated print and online business, and began to increase resourcing to the digital business while we set about rationalising the print cost base. We basically shifted costs from print to online, although the cost base was very different as were the resources required for growth.
We reduced print circulation by exiting interstate and regional distribution areas; moved to lower cost printing facilities; fully automated the ad booking process; reduced wastage in pages by rationalising ad units to just a few set sizes; created a display environment with larger branded ads to create a magazine style product; improved editorial and sold ads at a premium adjacent to the editorial; integrated the sales team to sell across print and online; bundled premium online products with print with the express ambition of growing the online business, not defending print.
Substantial investments were made in digital sales, product, and marketing. We focused on the larger Sydney and Melbourne markets. We built depth products that enabled higher yields online that could work to pick up the declining print revenue at a faster rate. And we went hard and early on mobile and built native apps, which gives us a clear leadership position as audiences move online.
Against a number of measures, the Domain Group is now growing faster than its major competitors, and is investing heavily for further growth in the following areas:
- To scale up sales nationally and aggressively grow listings by offering low cost or zero cost entry products for real estate agents to advertise.
- We have acquired a number of services businesses, including property data and real estate Client Relationship Management software, which can be leveraged to improve the consumer experience on the portal and provide more services for real estate agents.
- Product innovation: We are now launching three product improvements/innovations a day.
- Capitalising on the breadth and depth of quality real estate content to attract audiences.
- The creation of an equity ownership structure allowing participating real estate agents to partner with the Domain Group, with shares and dividends based on business success.
While our print products remain profitable, they are a key part of the marketing tools to attract and engage audiences across our digital platforms.
It is a sign of the transformation that has taken place and how far the Domain Group has come. In just five years, it has gone from a largely print based real estate media business to a diverse, integrated real estate media and services business that is growing rapidly in partnership with real estate agents across Australia.