CoStar Group, Inc. (NASDAQ:CSGP) Q4 2019 Earnings Conference Call - Final Transcript

Feb 25, 2020 • 05:00 pm ET

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CoStar Group, Inc. (NASDAQ:CSGP) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] And our first question comes from Ryan Tomasello with KBW. Please go ahead.

Analyst
Ryan Tomasello

Good evening everyone. Congrats on the strong finish to the year. I wanted to ask about apartments.com. You know, clearly the platform continues to see strong momentum and it seems that the push into the middle market and the low end of the market holds promise, but I was hoping Andy that you can give us some color on your thoughts around how you frame the risk of competitive pressures in the market for lead generation. I think on the RentPath call you alluded to the position that Google has in that market in controlling renter traffic. So I was wondering if you see the risk of them increasing their stake in this market as a threat similar to what they've done in the online travel booking world?

Executive
Andrew C. Florance

Sure. So certainly Google has a full position on controlling renter flow, the majority of renter flow. And then in the online travel world the OTA's like Bookings.com or Expedia has spent -- invested large sums of money to build direct traffic that are independent of Google intermediation. And frankly, while they have -- those hotel OTA's have taken a bit of a hit, they still have outstanding margins and are very profitable businesses.

So we think that Google is a competitive factor there, growing revenue in the apartment space. People do make a decision between spending the money directly with Google or spending the money with apartments.com, but we believe we offer a number of advantages, have some strong client loyalty and we will continue to grow and thrive. And while we look at Google as providing a competitive element to the company, we also look at them as a very important partner. And we believe that our investments into Google keywords and other initiatives with them has been very fruitful. So nothing in life is without some risk, but we feel comfortable with it.

Operator
Operator

Our next question comes from Sterling Auty with JP Morgan. Please go ahead.

Analyst
Jackson Ader

Hey, thanks. Hi guys, this Jackson Ader on for Sterling tonight.

Executive
Andrew C. Florance

Hello, Jackson.

Analyst
Jackson Ader

My question is on the middle market sales. Now that that sales team is kind of up and running, how should we or how are you guys thinking about the unit economics for that particular segment?

Executive
Scott Wheeler

I believe it's running about an average of $320 per unit, something like that.

Executive
Andrew C. Florance

That was definitely in the Silver Ads and overall it's about $440 per unit of what we sold so far and the largest mix of ads as we mentioned was in the silver level within some gold segments and platinum and diamonds then sold by the team.

Executive
Scott Wheeler

But don't get excited, because there's only tens of millions of opportunities down there in that segment.

Operator
Operator

Our next question comes from Stephen Sheldon with William Blair. Please go ahead.

Analyst
Stephen Sheldon

Hi, thanks. And that was a lot of detail. Andy, there was a brief comment in your