Highly classified
Hugh Oram clicks on Ireland’s top trading website, DoneDeal
When husband and wife team Fred and Geraldine Karlsson started DoneDeal.ie on their kitchen table in Wexford a decade ago, they had plans in place. Even though the business is now owned by a multinational group, the site still preserves the ethos of a small operation which attracts 600,000 visitors a day and traded in goods worth €4.5 billion last year.
The idea behind DoneDeal.ie is to allow consumers trade across a range of second-hand goods. Right from day one, the Karlssons decided against running up bank debts. The fact they knew a lot about IT helped. Fred Karlsson is a software developer who began in his native Sweden by developing and selling computer games at the age of 15.
His wife, Geraldine, a native of Wexford, graduated in computer science from the Waterford Institute of Technology (WIT). When the couple were living in Sweden, they were selling furniture online. When they came to Ireland, they found trading websites did not exist, which prompted them to launch. The brand name ‘DoneDeal’ just seemed appropriate.
When they first started, they put some of their own possessions on the site, before real ads got going. At first, the Karlssons advertised the website using Google AdWords, a cheap but effective medium that cost €600 a month to create brand awareness and built traffic. Bodies like the Wexford County Enterprise Board provided business mentoring experience.
Trading places: DoneDeal is sponsoring weather reports across four of UTV’s local stations – FM104, Cork’s 96FM & C103FM, Galway Bay FM and WLR in Waterford. Pictured at the IFSC with DoneDeal’s marketing manager, Agnes Swaby (right) are, from left Jill Downey, Livewire; Ellen McCarthy, Starcom and Gráinne Ryan and Ciara O’Connor, UTV Radio Solutions.
For the past four years, advertising has played a bigger role in building the business and a tongue-in-cheek TV campaign called ‘Husband for Sale’, created by Publicis three years ago, got a lot of reaction. Later campaigns have included sponsorship. Last year, it sponsored the popular X Factor on TV3. Banner advertising is an important source of revenue on the site.
Deals with local charities have played a role in developing brand building and awareness. Last month, its Charity Month pushed donations over the €1 million mark. These days, not just advertising, but PR, word of mouth, competitions, events and social media all play a part in raising the brand profile. Social media and digital is the marketing priority for 2016.
Chief executive John Warburton and marketing manager Agnes Swaby prefer to stay schtum on disclosing advertising and marketing spends. Five years ago, the company had just three employees. Today, the business has over 60 staff. Oslo-based Schibsted Media Group (SMG) moved up from a majority stake and bought out the Karlssons remaining interest in 2011.
SMG has a network of classified sites in 30 markets. A deal this summer saw SMG merge with Distilled Media Group, which owns Adverts.ie and Daft.ie. SMG and Distilled each have a 50 per cent stake in the new entity, which owns the three sites and has a total value of €80m. DoneDeal still operates from Wexford and Dafe.ie and Adverts.ie from Dublin.
New York hedge fund Tiger Global’s 25 per cent stake in Daft was bought out for €21m as part of the deal. Commenting at the time, Daft.ie co-founder Eamonn Fallon, who also runs Boards.ie and The Journal.ie, said the SMG-Distilled merger could only improve the scale of both companies as it competes with the US internet majors in the online advertising market.
The Karlssons stepped back from day-to-day involvement in the company to focus on development. Warburton was promoted to take the reins. He puts the company’s success down to keeping things simple for the site’s users, investing in tools to drive user traffic, focusing on customer needs and care – giving customers the right product at the right time.
Innovation has played a part, including DoneDeal’s phone-based payments system. Swaby says the classified site now has 208 sections. Motors is most popular section, with 48 per cent of all activity and 837,000 ads, worth €3.9bn. Home and DIY accounts for 17 per cent and electronics is on eight per cent. On average, 157, 000 ads are placed on the site each month.
When DoneDeal was in its early years, it was mainly used by rural dwellers. But in recent times, the growth has been more urban. While much of the trading is in smaller items, the site also attracts bigger ticket items like cars and machinery. Last year, the three most popular searches on the site were for BMWs, John Deere agri machinery and iPhones.
The recession that struck hard in 2008 proved fortuitous for DoneDeal. Warburton and Swaby are adamant that the demand for second-hand goods is here to stay as the economy recovers and the sector grows faster than traditional retail. As the economy improves, more and more consumers will sign up to 24/7 online shopping led by the second-hand market.
The next development will be in mobile usage. Swaby says mobile is becoming one of the most important consumer channels where DoneDeal must stay on top of its game. There is a shift from desktops to mobiles in accessing trading sites. Latest customer figures show that 57 per cent of DoneDeal visits are through the brand’s app and the mobile website.
Are offline classifieds as dead as the proverbial dodo? Warburton says he might stop short at going that far, but admits they are struggling to keep up with the online model. As always, the biggest challenge remains getting consumers to return to the website time and again. The consumer mantra – “If you want it sold, put it on DoneDeal” – still has its work to do.
Hugh Oram is a freelance writer
