Third-party sites DO NOT rule the real estate roost : Clareity Consulting Blog

Jul. 26, 2011 - Third-party sites DO NOT rule the real estate roost

Recently, I was surprised by an Inman article, entitled "Third-party sites rule the real estate roost" which concluded that "third-party publishers are capturing the vast majority of traffic to real estate websites nationwide". In the Experian chart of Chicago traffic presented in the article, if one adds up the traffic of Realtor.com, Yahoo! Real Estate, Trulia.com, Zillow, Homes.com and AOL Real Estate (the relevant non-rental sites from the chart) they only add up to 24.93% of the online exposure and individually, in Chicago, the largest market share was Realtor.com with a 5.93% market share. The top publishers' total share of 24.93% is clearly not a "vast majority". And certainly, despite the recent hype surrounding Zillow, they only clocked in with a 4.28% market share according to this article.

Still, compare all this online exposure to the old local reach of newspapers, especially in markets where there was one primary, such as the Chicago Tribune. Putting an ad in that paper used to be almost unavoidable. That newspaper was THE channel to the Sunday morning breakfast table where consumers sat around looking at listings. There weren't any other options. Compare that with these websites, if you will. If hypothetically Zillow or some other site crossed the line with brokers, in terms of their business model, and brokers decided en masse to not send them listings, that web site's market share would be re-absorbed in a heartbeat by other websites. Let me make it more clear: at one point Friendster ruled the roost of social media. Then MySpace did. Even the mighty Facebook is now under pressure to get its act together before Google+ gives people a better solution and too many make the move. In the heyday of newspapers, there weren't other options and the newspapers had a lot of power but in the Internet age it's no big deal to ditch a website that you don't like - it's far more difficult for any website to gain and keep a hold of participants.

Let's go back and consider one more thing from that Experian Chicago market share chart. It's important to understand that the chart represents online market share, not the share of the actual overall marketing exposure of the home. To use a figure from a recent NAR survey, only 36% of home buyers actually found their home online. So, one way to look at it is the online market share is only 36% of the total overall marketing market share. And if all the leading websites together added up to about 25% of the online marketing market share, that's only 9% of the overall marketing market share. And Zillow, with it's 4.28% of the Chicago online marketing market share, yields only 1.54% of the overall marketing market share. Could a Chicago broker not explain to the home seller that the 1.54% of total exposure was not particularly significant? Greg Robertson posed the question of whether Zillow is that famous "lion coming over the hill". It's a good question, and I'm glad he asked it. My belief is that the answer - perhaps until recently - was "No". But, now that they have somehow convinced people they are the king of jungle and people are laying down tribute in front of them in the form of a strangely high stock valuation and capitalization, they might be able to use that tribute to actually build up their power, and become the lion in reality.

Still, I like the way one participant in Inman's Data Summit put it: "Internet, schminternet; who brought you the last deal?"

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Jul. 26, 2011 - RE: Third-party sites DO NOT rule the real estate roost

Posted by Matt Carter

The story has been updated to correct that at the national level, listing portals operated by third-party publishers account for most of the traffic to the top 20 websites in the real estate category

The first reference to market share in the story was to national numbers Experian Hitwise published for the month of May. That report showed the top 20 websites capturing 47 percent of visits in the real estate category.

Among the top 20 sites, eight were third-party listing portals with a cumulative market share of 32.56 percent. So among the top 20 sites in the Hitwise report referenced, third-party publishers are in fact capturing the "vast majority" of traffic.

By contrast, there were only two brokerages (ZipREalty with 1.44 percent, and Weichert.com, 1.06 percent) and one franchisor listing portal (RE/MAX Real Estate, with 1.06 percent market share) in the Hitwise top 20, with a cumulative market share of 3.56 percent.

But MLS, agent, and broker websites are undoubtedly picking up a lot of "long tail" traffic. And as you point out, the Hitwise numbers look at many sites that are not listing portals, which is really what we're interested in. So there is no way of knowing from the Hitwise 20 whether or not third-party publishers account for the majority of traffic to listing portals at the national level.

In discussing Chicago and other local markets, the story noted that "a few MLSs and brokerage websites are able to go head-to-head against the big-name, third-party publishers, but they are the exception, rather than the rule."

When you look at the Chicago market, third-party publishers are in the top five spots, and only Redfin and MRED are in the top 10 (and MRED does not offer a public-facing listings portal).

If one adds up the Chicago DMA traffic of Realtor.com, Yahoo! Real Estate, Trulia.com, Zillow, Homes.com, AOL Real Estate, and HomeFinder, they accounted for 25.89 percent of segmented visits.

That compares to 7.44 percent for Redfin, MRED, MLS of Northern Illinois, RE/MAX Northern Ilinois, Coldwell Banker Residential, and ZipRealty.

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Jul. 26, 2011 - RE: Third-party sites DO NOT rule the real estate roost

Posted by Matt Cohen

Yes, third parties make up the majority of traffic among the top 20 sites - but why stop the analysis there? That's where it gets interesting - where a small number of third parties have miniscule market share and a large number of VOWs and IDX websites start turning the tide on the third parties. Looking at the big pictures, third parties don't rule the roost, collectively and certainly not individually.

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Jul. 27, 2011 - RE: Third-party sites DO NOT rule the real estate roost

Posted by Matt Cohen

One more note about the 'top 20' Experian sites - I would suggest not counting rental sites:

6. Rent.com - 2.23%
11. Apartments.com - 1.26%
9. Apartment Guide - 1.26%
20. Rentals.com - 0.83%

Four of the twenty just don't apply to the real estate 'for sale' market real estate agents are competing with for visitors.

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Nov. 1, 2011 - RE: Third-party sites DO NOT rule the real estate roost

Posted by Adam De Young

Imagine a world where the MLSs dominated the web traffic for the real estate industry. The MLSs who already have the most accurate data and who are pledged to serve their REALTOR members.

Or...quit imaging. The white paper by our CEO Cameron Paine explains in details why we need one MLS website

What do you think?

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