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Angie’s List and HomeAdvisor Are Merging – How It Will Impact Your Business

June 5, 2017  |  admin  |  News

When it comes to people searching for home service provider reviews, there is one brand that comes to mind: Angie’s List. It’s one of the longest running review sites, and as a business owners, you know how important reviews are to your customers. 88% of people say reviews are a factor in their buying decision.

The home service review business is changing. Last month IAC, the parent company to Angie’s List’s biggest competitor, HomeAdvisor, announced that it is buying Angie’s List in a deal valued at over $500 million. Both Angie’s List and HomeAdvisor are retaining their brands, but now IAC will run both companies under a new, combined publicly traded company named ANGI HomeAdvisor which will be run by HomeAdvisor CEO, Chris Terrill. The deal isn’t expected to close until Quarter 4.

This news rocked the home service world now that two of the largest rating and reviews sites are combining. For many businesses, you may use one or both sites to connect with qualified leads. If you advertise on either Angie’s List or HomeAdvisor, you may be confused or concerned about how this new deal will affect your business.

What is Angie’s List and HomeAdvisor?

Both Angie’s List and HomeAdvisor are sites that allow potential customers to read reviews and learn more information about home service contractors. The benefit of these sites is that the leads are more likely to be more qualified than just those that use search engines because people who go on these sites are going there with a purpose. There are other review services like Yelp, and Google My Business, but Angie’s List and HomeAdvisor are specifically built for home service contractors (Angie’s List also reviews medical professionals.)

Angie’s List

Angie’s List was started back in 1995 offline. Co-founder Angie Hicks and a business partner knocked on doors, asking people to sign up as members and collect ratings of local contractors. The hook was that Angie’s List provided a list of highly qualified contractors a mom could trust in their home. After signing up more than 1 thousand members in its first year, the business moved to the Internet and expanded nation-wide.

Up until recently, Angie’s List operated as a subscription-only business, where consumers had to pay a fee to access its list of businesses and leave reviews. In July 2016, it changed to being a “freemium” service where it is free to sign up, but costs money to get more benefits.

It has always been free for businesses to create an Angie’s List profile. However, the site also gives you the chance to advertise and get better placement in the search results. Being a paid user also lists you as Angie’s List certified. It is a pay-per-click system that tends to have a higher cost-per-click than Google AdWords. These ads also don’t appear like ads. It looks as if you are offering coupons. Very sneaky.

Angie’s List states that is has 5 million members using its site. Despite its quick growth in the 2000’s it has grown stagnate. Since going public in 2011, it has only generated a profit 1 year.

HomeAdvisor

To understand HomeAdvisor, we must first get a better understanding of its parent company, IAC. IAC is a large Internet Company that owns websites and apps like Match.com, Tinder, Vimeo, College Humor, and The Daily Beast, just to name a few. It bought Service Magic in 2004 which later became HomeAdvisor. Service Magic had been around since 1999.

HomeAdvisor has two functions: you can search and read reviews, or you can get matched with a contractor in your area. Unlike Angie’s List, it has always been free to use for consumers.

Businesses don’t have to pay to be listed on HomeAdvisor. However, if you are matched with a customer and want to pursue the lead, then you have to pay HomeAdvisor to get connected. You manage your account and can turn off leads when you don’t need them or turn them on for more. It’s a good way to jump start a new home service business.

HomeAdvisor is growing like crazy. It had 12 million projects completed in the last year, which is great for businesses who are looking for a way that is not just going to get them leads, but actual business. It has seen revenue growth for 8 straight quarters.

How Does This Impact Me?

The merger is now agreed upon by both sides and the deal is expected to wrap up in Quarter 4. For the time being, the only people that have to worry about possible changes are people who work at the Angie’s List HQ in Indianapolis since the company will now be operated out of HomeAdvisor’s office in Denver.

If you are using Angie’s List to advertise your business and are worried about it going away, the good news is that the company is retaining its brand. That’s a smart move by IAC because Angie’s List has built killer brand awareness through online and offline marketing. It doesn’t look like the website is going anywhere. How it functions over time could change, but we will not be able to see that first hand until we see when IAC takes over officially later this year. With the success of HomeAdvisor, this could be better for businesses down the line.

Out of the two, Angie’s List definitely wins the brand identity battle, but when it comes to the numbers, HomeAdvisor has seen more success. Now that both will be on the same team rather than competing against one another, it will be interested later down the line to see how they improve the websites’ quality for both consumers and for businesses. Stay tuned!

If you want to hear how AdMachines can help you reach high quality leads with paid advertising and use sites like Angie’s List and HomeAdvisor to market your company, click here to sign up and speak with one of our experts today!

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