Realtor.com set to retool its ‘bread and butter’ agent, broker ad products

Agents will pay more for exclusive 'Connection for Co-Brokerage' leads

Realtor.com operator Move Inc. is making adjustments to two core agent and broker ad products, including a price increase for exclusive leads generated when homebuyers type their contact info into forms that run next to some listings on the site.

The changes will be coming to what Move CEO Steve Berkowitz called the firm’s “bread and butter” consumer ad products:

Screen shot of realtor.com's home page.
Screen shot of realtor.com's home page.

Connection for Co-Brokerage, which allows agents and brokers to generate leads from unbranded lead forms next to competitors’ listings on realtor.com, and

Showcase Listing Enhancements, which allow agents and brokers to ensure their name, branding and contact info shows up next to their realtor.com listings.

Connection for Co-Brokerage leads will see a price increase and a modification in the way it’s sold sometime this summer, Move Chief Financial Officer Rachel Glaser said during a presentation at Move’s investor and analyst day on May 22 (see presentation at approximately 2 hours, 9 minutes in).

Move is also looking at increasing the prices for Showcase Listing Enhancements, Glaser said during the meeting.

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Connection for Co-Brokerage

Since launching the product in 2011, Move has provided Connection for Co-Brokerage leads on an exclusive basis, meaning that each time a consumer provides their contact info on a lead form, that lead goes to just one agent.

Co-Broke
Screen shot of a property detail page on realtor.com featuring a Connection for Co-Brokerage lead form. The blue-tinted form on the right directs consumers to brokerages or agents who buy Connection ads.

Within the next few months, Move will begin offering brokers and agents the option to continue receiving Connection for Co-Brokerage leads on an exclusive basis at an increased price, or to pay less and receive Connection leads that are also sent to at least one other broker or agent.

Move sells Connection for Co-Brokerage leads by slices of cities and ZIP codes, guaranteeing a certain return on investment to brokers and agents per slot. Move opens up a new slot in a ZIP code when it can guarantee a minimum number of leads in that slot, Glaser said.

Prices for Connection for Co-Brokerage are currently segmented into eight price tiers that are keyed to home prices and realtor.com traffic.

Monetization for each Connection for Co-Brokerage slot could be two to three times for what it is now when the new pricing feature is fully rolled out, possibly in the next six months, Glaser said.

While agents and brokers’ lead volume might be similar with both versions of the product, lead conversion rate will likely be lower for the nonexclusive version, Glaser said. Accordingly, that version will be less expensive than the exclusive one.

This change to Connection for Co-Brokerage will bring it in line with similar agent ad products on Zillow and Trulia, which feature competing agent branding and provide lead forms that connect consumers with up to three other agents on a listing.

Screen shot showing agent ads next to a listing on Zillow. One agent is the listing agent.

Screen shot showing agent ads next to a listing on Zillow. One agent is the listing agent.

By default, Zillow sends a connection to just one agent, but consumers can select up to two others (or three if the listing agent has claimed the listing) to connect with.

Trulia connects consumers to a default of up to three agents (or four if the listing agent has claimed the listing). Consumers can deselect agents and connect with just one or two if they choose.

Screen shot showing agent ads next to a listing on Trulia.

Screen shot showing agent ads next to a listing on Trulia.

Realtor.com’s Connection for Co-Brokerage leads also differs from Zillow and Trulia’s products by giving brokerages the ability to exclude the ads by opting out of the program.

Brokerages, but not agents, can opt out of the Connection for Co-Brokerage lead forms on an all-or-nothing basis. As an incentive to participate, brokerages that agree to allow Connection for Co-Brokerage lead forms to appear next to their listings receive free perks like additional photos, links to open house information, the ability to enhance property detail descriptions.

(Agents can’t opt out of Connection for Co-Brokerage lead forms on their listings, because they don’t own the listings, brokers do, according to realtor.com.)

If a brokerage opts out of Connection for Co-Brokerage, its listings on realtor.com are limited to four photos rather than up to 36, for example.

Splitting Connection for Co-Brokerage into an exclusive version and a nonexclusive version will provide some additional supply for the ad product, which is in high demand, Glaser said.

Approximately 90 percent of the homes for sale in the U.S. fall within 12,000 ZIP codes, Glaser said on Move’s first-quarter earnings call with investors. Of the 10,000 ZIP codes Connection for Co-Brokerage is currently sold in, she said, it’s sold out, with waiting lists, in nearly 7,500.

Connection for Co-Brokerage inventory will also rise as traffic to realtor.com because contacts to agents will correspondingly go up, Glaser said.

Showcase Listing Enhancements

By paying to enhance their listings on realtor.com with Showcase Listing Enhancements, brokerages and agents ensure that their branding, contact info, links and lead forms show up on their realtor.com listings.

When brokers and agents pay for Showcase Listing Enhancements, they prevent Connection for Co-Brokerage lead forms that generate business for competitors’ agents from appearing next to their listing. If brokers allow the lead forms to appear next to their listings, they get some of the perks that they would otherwise have to pay for withShowcase Listing Enhancements at no charge.

Showcase
Screen shot of a property detail page on realtor.com with Showcase Listing Enhancements. See a more detailed breakdown of enhanced listings versus basic listings on realtor.com here.

Both products give brokerages and agents a way to enhance their listings on realtor.com with additional photos, links to open house information, the ability to edit property details and more.


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