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HomeAdvisor Idea Proposal (IAC, ANGI)

HomeAdvisor Idea Proposal (IAC, ANGI)
 

Are contractors getting their money’s worth from HomeAdvisor?

Report Available:July 26, 2017

 

Blueshift’s initial research found HomeAdvisor growing rapidly with more home service professionals subscribing to its network and more consumers requesting services. HomeAdvisor is beefing up its marketing to convince consumers to use the service to find home improvement contractors. The company is acquiring rival ANGI in the hopes of capitalizing on the struggling review site’s strong brand name.

 

Observations

  1. HomeAdvisor is a digital marketplace that helps connect consumers with home services professionals in North America, France, the Netherlands, and Italy. Contractors such as plumbers, electricians and remodelers pay subscription fees to be listed in HomeAdvisor’s directory and to be part of the company’s automated matching service.
  2. Revenues for IAC’s HomeAdvisor segment increased 35% in Q1, its eighth straight quarter of similar growth, as the number of paying service professionals in its network rose to 156,000 and service requests climbed.
  3. HomeAdvisor’s success hinges on convincing contractors of the ROI of being part of its network. HomeAdvisor competes with other lead generation services and marketing channels, such as Google search and installation services provided by home improvement superstores like LOW and HD. The company also needs homeowners to use its service to find professionals for home improvement projects. To that end, it is ramping up its marketing efforts, targeting as much as $100 million in TV ad spending in 2017. According to HomeAdvisor’s True Cost Survey, the average homeowner spent nearly 60% more on home projects between February 2016 and February 2017 than in the year prior.
  4. In May, IAC announced plans to acquire rival review site and consumer marketplace ANGI and merge it with HomeAdvisor to form a new, publicly traded company, to be called ANGI Homeservices Inc. IAC will own about 90% of the new company at closing, which is expected to take place in Q4. ANGI has been struggling, with Q1 revenues falling almost 13% as it eliminated membership fees to attract consumers to its platform. Amid the pending merger, ANGI recently laid off about 70 employees, mostly in sales.
  5. Blueshift’s Dec. 16, 2016, report said the ServSmart app from Dispatch.me is very popular among SERV’s American Home Shield contractors and has provided significant benefits to their businesses. However, it has not brought revolutionary change and, for the most part, has not made relationships with AHS “stickier.” The Dispatch.me software is not unique to AHS and is on its way to becoming a standard mobile software for service industries with a third-party contractor model. Contractors who get the software from AHS can use it for all their customers, including competing home warranty companies, as is the case for five of 11 sources.

 

How much are contractors spending with HomeAdvisor? How is that spending changing? What is their cost per lead through HomeAdvisor? How does that compare to other channels? How often are leads converting to jobs? Is that ratio improving or declining? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: HomeAdvisor contractors in the Northeast, Midwest, South and West.

 

Companies: IAC/InterActive Corp (IAC), Angie’s List Inc. (ANGI) ServiceMaster Global Holdings (SERV), Lowe’s Companies Inc. (LOW), Home Depot Inc. (HD)

 

Research Begins: July 10, 2017