Industry Pioneer Leads Charge to Change the Tenor on the Web
Real Estate 2007 is a year that saw REALTORS playing a frantic game of catch-up with Web 2.0. Many are adopting new Web-based consumer outreach channels, and assessing the latest paradigm shift in the industry, meeting consumers face-to-face online. Web giants Zillow and Google played to a packed house at the National Assn. of REALTORS' Business Technology & Information Services Forum in Las Vegas recently and answered direct and hard hitting questions posed by RealTown's Saul Klein. (Shown below, l. to r., Richard Barton, Zillow.com, Justin McCarthy, Google.com, and Saul Klein, RealTown.com)
This trend to adapt to Web 2.0 models is a seismic shift from a decade old struggle with technology that saw REALTORS embroiled in mixed emotions of confusion, suspicion, and fear, fueled in large measure by disparate views about the Internet among real estate notables.
A celebrated industry journalist told realty pros that online giants Google, Zillow, Point2Agent, and RealTown are conspiring to put REALTORS out of business.
Saul Klein, President and CEO of InternetCrusade, home of RealTown, offered another view: “Technology is a tool and not something that will put you out of business,” he declared. Klein has echoed this belief as a leading real estate industry Web evangelist for many years.
Klein and his partners, John Reilly and Mike Barnett, are acknowledged widely for pioneering leadership in building online community and Internet marketing. They put some of the first real estate listings on the Internet, signing up MLSs to the fledgling Realtor.com; they established the first online communities in the real estate industry via e-mail listserv networks with tens of thousands of subscribers; they were responsible for the first automated purchase of extended domain names; and they are the leading industry evangelists for e-PRO, the NAR certification for online proficiency in real estate.
Tens of thousands of community members, e-PRO graduates, and generations of association leadership have been beneficiaries of Klein’s vision and outreach. Growing numbers of real estate professionals are using the Internet and Web-based tools and platforms demonized by others in distantly fading myths and falsehood.
Klein's InternetCrusade launched a reincarnation of RealTown.com as a robust real estate web portal in late January, following 12 years of development as the first online community in the real estate industry. RealTown is a social networking site with a real estate flavor that offers real estate agents and brokers an opportunity to participate on numerous community platforms, create robust profile pages, and create free blogs that outperform many paid blog platforms.
Last week Klein announced that he will assume the CEO mantle at Point2 Technologies in addition to his duties at Internet Crusade. There was strong and immediate reaction to the news as real estate professionals and association leadership throughout the country applauded the move at Point2 Technologies. The same industry journalist who ballyhooed notions of disintermediation earlier this year covered the news without a whisper of conspiracy.
Online Advertisting vs. Print and Broadcast
The chart at the left is evidence of a chasm between the time that consumers spend on the Internet and total advertising dollars spent on that medium. Some 6% of ad dollars are spent online in an age when the Internet fills 34% of the consumer media consumption appetite.
The panel was unanimous in the judgment that this gap will narrow as online media companies develop new advertising models. The panel said that online advertising offers several distinct advantages over print media:
- Online advertising offers highly targeted, relevant advertising, often filtered by zip code and neighborhood.
- Online advertising with Google and Zillow do not require long-term commitments.
- Online advertising offers performance analysis design that is unavailable with corresponding print and broadcast models.
- Online advertisers can change their ad campaign and their message "on the fly" in a dynamic format that print does not offer.
Studies also show that the Internet buyer is a different kind of buyer, one that is more inclined to use a REALTOR than to go it alone. Percentage of For Sale By Owners (FSBOs) has not changed appreciably in 10 years, it is below 15%, according to NAR. There is no data to support the hypothesis that the Internet is producing more FSBOs.
Google's Strategic Planner for the Real Estate Industry Talks about the Juice
Why does Google care about real estate?
Real estate has always been one of the most popular search categories. In 2004 “real estate” was the most popular business search category. People have not become less interested in real estate. There is increasing interest in real estate, evidenced in organic growth on the Web. Consumers increasingly expect more information.
“It was only four years ago that we were speaking at an Inman conference and we told REALTORS, ‘… when you build your site be sure that search engines can see it.’ At the time those comments were not met with warmth,” McCarthy recalled. "There was a strong notion of 'The lion over the hill' and rhetoric to match. The industry was caught in a period of stagnation that started about four years ago and anything that looked new or slightly off model was immediately the lion or something bad.
"We are not having those conversations anymore,” he said.
Google is working with Houston Assn. of REALTORS and a dozen more REALTOR multiple listing services who are giving Google their data. Rapattoni, a leading MLS vendor, autoloads data to Google for its customers looking for richer Google juice and higher rankings in search engine results.
How do I climb in the rankings at Google? How do I interface with Google?
There are a number of ways to interface with Google.
- Google News is one way to interface with Google.
- Google Base offers real estate professionals an easy way to provide more content for the search engine spiders to index. Uploading property information into Googlebase is free, gving real estate agents and brokers an opportunity to accomplish better rankings in the search engine results.
What is Google’s Business model?
It is about advertising … 99% of Google's revenue is derived from advertising.
"We noticed many searches getting mediocre results; we decided that to serve the consumers better we had to engage the industry to surface more information that the consumer is seeking. People are looking for listing information, comparable pricing, brokers and agents. A couple of years ago we were inefficient in answering those problems. We think we have a product that is pretty good, that answers key questions for consumers. We can then forward the consumers to the people in the industry who can give them more information," said McCarthy.
What is the difference between Google and Google Base and what is the business model for Google Base ?
Google Base is the administrative back end of the Google search engine that allows real estate agents and brokers to upload information into Google.com. Google Base is the page where a business owner, agent, broker, MLS, or real estate franchisor uploads property information to Google.
Can REALTORS advertise their listings for free on Google? Will that always be the case?
Real estate listings are free on Google. McCarthy said that Google takes data feeds with the belief that there is a mutual benefit to the agent and Google. “Free is good and free will continue,” he said. “Brokers can provide fully detailed listings, complete with numerous photographs, contact information, and agent photos and logo. We believe that if a consumer cannot get what he wants at Google he is going to go somewhere else.
“The deeper, fuller, and richer the content, the more valuable you are to the consumer,” McCarthy told the group.
Do you believe that the REALTOR provides value to the real estate transaction?
Barton: " I think a valued, trusted consultant is absolutely fundamental to the real estate process. I would not do a transaction without a trusted advisor and I don’t know many people who would."
Is Google going into real estate brokerage?
“NO! Our core competency is advertising and we have no plans to go into real estate brokerage,” declared McCarthy.
How is Google different from other companies?
“Philosophically we agree to push listings beyond our site. We are not a destination site. We return search results to the user and we send the searcher to another location, to the provider of the information … Other sites, destination sites, want to keep the people on their own pages,” said the Google exec.
I get e-mails telling me they can put me at the top of Google. Are these legitimate offers?
Google urges real estate agents to perform due diligence on solicitations that promise quick results on Google. What is the “secret sauce” that will get you to the top of the results?
“Even I don’t know that,”admitted McCarthy. Generally speaking, established search engine optimization experts work with a client roster versus a promise of things that are not likely to happen, he said.
Zillow.com Founder Richard Barton Greets Enthusiastic REALTORS
The founder of Expedia.com made headlines when he launched Zillow less than two years ago. Online reservations and ticketing in the travel arena revolutionized the travel industry and reduced the ranks of travel agents. Real estate agents and brokers feared similar disintermediation. Richard Barton was greeted as a rogue in early 2006. Twenty one months later, at the 2007 NAR meeting in Las Vegas, he crossed the bridge from rogue to hero.
What should REALTORS think about Zillow?
“Our business mission is to be the REALTORS’ most efficient and effective marketing partner. We think the most knowledgeable people about real estate in every community in this country are the REALTORS. Homeowners know a lot about homes and they are passionate about it but REALTORS know what is going on in the market. Zillow offers a way to demonstrate that expertise that REALTORS could not do in the past. You can only have so many one on one conversations with consumers. Zillow gives you an opportunity to multiply your voice. We do it for free … it gives you a chance to establish your reputation online,” said Barton.
"We are a media business, we make money on advertising. It is a free and open marketplace and we sell advertising around that. When REALTORS see Zillow they should see opportunity. Opportunity does not come without controversy. REALTORS give mixed reviews about Zestimates. Some REALTORS say they make life difficult at times and wish that they were not there. Others are saying that they are having much more meaningful discussions with consumers about property values since Zestimates came online," he continued
People are talking about Zillow, and that gives REALTORS a chance to talk about value and show off their expertise. Zestimates have been controversial. Barton promised that Zillow will continue to do controversial things, provocative things that homeowners and consumers really want, and will keep them coming back.
What is the parallel between the travel agency and the real estate industry?
The similarity between the industries is the fact that there are vast volumes of information that is changing all the time. The Web has empowered consumers to make them smarter. In most cases travel transactions are mere commodities. A consumer taking a trip from Boston to Chicago does not need a consultative service. In real estate, gathering information is just one step in the home buying process. A consultative service is essential to the transaction, according to Barton.
Who is using Zillow?
- 4 million visitors a month
- Two thirds of Zillow visitors will be in the market to buy or sell a home in the next one to two years.
- 300,000 users are real estate agents.
- 75,000 real estate agents have profile pages with contact information.
- 1 million people have claimed their homes.
- Consumers and real estate agents make 25,000 - 30,000 contributions a day.
- Zillow presently has more than 100 feed partners, including brokerages and aggregators, like Point2 Agent and OBEO.
Why are brokers putting listings on Zillow when Zestimates conflict with a REALTOR'S estimate of market value?
Consumers use Zillow to see houses and check Zestimates. A Zestimate is an online valuation tool that gives real estate professionals a starting place to have a serious discussion with home sellers about property values. Market variant is about 7% nationally for Zestimates when compared with actual market value, according to Zillow’s Barton.
Will Zillow sell leads to agents (REALTORS provide the content and Zillow sells the leads back to them)?
“No. Lead generation is a broken business model. It is an unsustainable business model. The lead gen model on the web is not something I would invest in,” said Barton.
What is next for Zillow?
Newspaper Consortium. Zillow recently announced a consortium with 262 newspapers, including the San Jose Mercury News, the San Francisco Chronicle, and the Tampa Tribune. Zillow will provide technology and content to newspaper dot com web sites. Some 11 different newspapers will task their sales forces to sell advertising not only on for their newspapers but Zillow.com. The partnership will commence by mid-year 2008, according to Barton.
Virtual Sold Sign. One of the most effective forms of real estate advertising is the sold sign. Zillow announced that it will offer REALTORS an opportunity to put virtual sold signs in front of the houses that they have sold. In its first incarnation it will be part of the broker feed program. A broker will be able to tell us, “After the house sells, leave the information about the agent on the listing and a virtual sold sign,” said Barton.
Advertising targeting platform. “We believe we can make good predictions about what will go on the market. We call it Mover Predictor technology. If we can reliably predict who is going to move and remodel, we can offer better exposure and advertising possibilities for real estate professional,” said Barton.
Zmobile Technology. Zillow has a mobile feature called Zmobile. Consumers can send a text message for a Zestimate (home value). “This is the beginning of a very interesting mobile product,” said Barton. “The phone knows in space where you are with GPS … in the future we will be able to tailor an experience to the user where he is standing … as a consumer walks around a neighborhood we will give him a flow of information about the neighborhood, the homes, the neighborhood, and the listing agent, as he is moving around. Buyers’ agents could theoretically have mobile EZ ads that would appear on consumers’ phones and handheld devices."
Hyper-Targeted Advertising. “Advertising is content when it is relevant and valuable. Then it is not an annoyance,” said Barton. When a REALTOR buys a Zillow EZ ad in two neighborhoods in FL, he is providing a sit-up-and-take-notice experience to the user.
(Frances Flynn Thorsen is Managing Editor of RealTown.com. She is the author of HUD Homes for Sale: A Complete Buyer's Guide and HUD Homes for Sale: A Sales and Marketing Guide for Real Estate Agents. She publishes several blogs, including RealTown Report, The REALTYgram Blogger, and Web Women Giving Circle Blog. She is the Co-Creator of No Blogger Left Behind. She is a licensed REALTOR in Pennsylvania and Arizona.)