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ANGI Homeservices Idea Proposal (ANGI)

ANGI Homeservices Idea Proposal (ANGI)
 

Are service contractors increasing their spending with Angie’s List and Home Advisor?

 

Report Available: May 2, 2018

 

Blueshift’s initial research showed ANGI merging the declining Angie’s List brand with the HomeAdvisor platform. Salesforce expansion, cost savings initiatives, and monetization of web traffic are said to be ahead of plan. A key challenge to future growth and expansion of the merged brands is reducing the friction of engaging online home projects when the majority of service providers are still discovered offline.

 

Observations

  1. On May 2, 2017, Angie’s List agreed to be acquired by its primary competition IAC’s home services marketplace, HomeAdvisor. The deal closed in the fall of 2017 making the new publicly-traded company ANGI Homeservices Inc. (ANGI) the clear leader in the $400 billion home services market. Combined, the companies provide access to over 200,000 home service professionals with coverage across 500 different categories and 400 markets.
  2. Q4 was the first full quarter for ANGI and results were largely in line with the Street’s expectations. Revenue was up 80% year to year, beating expectations by $4.5 million. EPS missed forecasts by $0.02. The company stated its optimism about the quarter and the future of its acquisition, saying it was an opportunity to re-set the declining Angie’s List brand through the combination of the two entities.
  3. Trends in home buying favor growth for ANGI, as millennials are finally starting to buy more homes and the first-time homebuyers will drive demand for home repairs and upgrades. Millennials’ high comfort level with technology and their desire for ease of use also favors increased use of HomeAdvisor and Angie’s List as they are willing to check out online reviews and book services for their projects.
  4. ANGI does face some challenges because of poor reviews from both service providers and consumers for Angie’s List. The Consumers Affairs review site has Angie’s List at a 1-star rating out of 5. HomeAdvisor is also facing litigation for allegedly skipping criminal background checks on service providers that it advertises. There is also the difficulty in attracting home projects online when 90% of service providers are still discovered offline.
  5. Blueshift Research’s July 25, 2017, HomeAdvisor report found that service providers offered a mixed assessment of HomeAdvisor’s lead-generation platform. Several reported exceptional results while others contemplated permanently halting their use of the service. Nine of 16 sources representing service providers, such as plumbers, carpenters and electricians, said they have had a positive or mostly positive experience with HomeAdvisor. They reported getting consistently top quality leads with conversion rates as high as 75%. Seven others, however, were less enthusiastic. Among these sources’ chief complaints were poor leads resulting in subpar conversion rates and ROI. Two complained that leads are sent to multiple contractors and that they have to pay for leads regardless of whether they get the job or even talk to the customer. HomeAdvisor was a central—sometimes sole—element of nine sources’ marketing efforts. Others also use paid search through GOOG/GOOGL, YELP or rival lead-generation services like Thumbtack, with differing results.

 

What are service providers’ primary customer acquisition marketing channels? What are their spending trends for these channels? Which marketing channels produce the most leads? How are those leads converting? What are service providers spending trends with Angie’s List and HomeAdvisor? How are these two platforms performing for service providers? To answer these and other questions, Blueshift will gather data and issue a market research survey from independent sources in the following areas: Service providers advertising on HomeAdvisor and Angie’s List in five key geographic markets.

  

Companies: Alphabet Inc. (GOOG/GOOGL), ANGI Homeservices (ANGI), Yelp Inc. (YELP)

 

Research Begins: April 9, 2018

 

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