Trulia and the debate over the value of media companies in real estate
By Jessica Swesey, Wednesday, November 28, 2007.Bookmarking Sites
Real estate search site Trulia is offering agents a featured listings advertising product, the company said Tuesday on its blog.
The ads will enable agents to place listings in top search results on Trulia and promote their photo, name and contact information to consumers. Trulia said it will give Trulia Voices users a free trial, and the subscription cost after that is $50 per month for 10 listings.
Trulia previously has allowed brokers to brand themselves and promote listings, but this is the first such play for agents.
Real estate bloggers and blog readers have already started ripping into the idea, and it's turned into a debate over whether the industry should give away listings to third-party sites like Trulia or keep them on their own sites and other brokers' sites via IDX. And this discussion almost always leads to the changing role of real estate agents.
Some of the readers commenting on a thread at Bloodhound Blog say they believe that new media companies like Trulia do nothing more than use the industry's own information to draw in consumers and sell it back to agents via advertising or leads. Many of these agents subscribe to the school of thought that agents should compete with third-party aggregators or media companies for leads, rather than pay for them or pay to advertise on their sites.
Others said they see value in showing sellers how they will market their homes in many different places online, noting that it's still free to post listings on Trulia.
One of Trulia's competitors, Zillow, is also positioned as a media company, collecting and creating a destination for real estate information that is supported by advertising from agents and others in the business.
David Gibbons of Zillow stepped into the recent blog debate, noting that it's consumers who see value in third-party media companies, which in turn defines the value of the companies to agents. As industry professionals, real estate agents will never be considered a neutral source by consumers, he said.
Trulia and Zillow aren't the only companies focused around the model of attracting consumers with real estate content and selling advertising around that content to those who work in the industry, like brokers and agents.
Realtor.com and Move are essentially media companies. Bankrate has done this in the lending industry for years, and big media giants like Scripps Networks have real estate divisions supported by advertising.
A study released last week by Borrell Associates was bullish on the prospective growth in the real estate advertising space, predicting that the online component of real estate advertising would grow almost 26 percent to $2.6 billion this year, moderate to a still-strong 12 percent growth in 2008 and then soar to $3.3 billion in 2011. By then, Borrell suggested, Web sites could control 37 percent of the realty advertising market, a larger share than all other forms of advertising.
Shameless plug/further reading: What is the outlook for real estate media business models? Inman News is interested in the discussion and has planned a panel at Real Estate Connect New York on January 10 to dive in and find out. "Online Real Estate as Media Enterprise" will feature top executives from Zillow, Bankrate, Trulia, Scripps Networks Interactive and REA Group. More info is on the Connect Web site.
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
Add A Comment
You must login or register to post a comment.
Submitted by Anonymous on November 29, 2007 - 8:59am.
I'm a strong believer in "freeing" information - all of it.
One legitimate question is, what happens when there are multiple sources of information?
Meaning, suppose Trulia has 50% of the listings here in Boston, and Zillow has 50% of the listings (not the same 50%) and Google Base has 60% of the listings ('cuz they're better?), and our local media sites have 80%?
This doesn't really "help" the consumer, does it?
No, it wasn't good that the information was only in MLS, but the benefit of it was that ALL the information was in one place, making its availability / accessibility to buyers, sellers, and agents much easier.
Trulia and Zillow aren't being altruistic, let's be serious. They need the listings in order to survive and to generate revenue.
I wonder though, how can they ever match a MLS if they don't have the same number of listings? No matter what, I don't see them "replacing" MLSs, so what (added) "value" do they provide to users?
Submitted by Anonymous on November 29, 2007 - 9:24am.
Many agents seem to be battle to answer the question; "which media companies should I trust?"
There are two different strategies at play in real estate media businesses. Some RE media companies create value and organically attract an audience. Others play the arbitrage game. When a media company has to arbitrage either its audience or its listings content, you should probably see a red flag. RE media companies that buy expensive TV ad slots and then sell agents those eyeballs as 'leads' are arbitraging their audience. If they charge listing agents to add contact details to their own listings, they are merely arbitraging listings and are not creating value.
With Zestimate values and the massive audience they've attracted, Zillow has succeeded in adding new value and organically attracting a large audience. Not having to play the arbitrage game allows us to offer more value to agents and brokers than those sites that do. Zillow has no plans to charge agents for promote their photo, name and contact information to consumers.
Submitted by Anonymous on November 29, 2007 - 2:58pm.
Good topic for discussion – how to effectively advertise listings to interested home buyers at a time for many when inventories are creeping up and sales transaction times are slowing. Just yesterday I read an article by real estate sales trainer Scott Einbinder discussing the “cost of an unsold listing,” a topic which plays well into the debate over the value of media companies in real estate.
The question du jour: If you can work with a media company that will point more interested buyers to your Web site and close more of those unsold listings, is that a bad thing?
I’m sure we all agree the industry has supported the value of media companies that offer newspaper exposure – and essentially the same service described in this post: take the real estate broker or agent’s listing inventory and charge a fee for advertising those listings. The difference between newspapers and a Trulia is that listings and profiles on Trulia.com are free – always. We also offer optional paid advertising at a fraction of the cost of newspapers, trackable and focused on ROI – a promise we made since day 1 of our business.
More important, “what is the value of paid online advertising?” I can only speak for Trulia – here goes: 1) Volume: Trulia was a top 3 referrer of online traffic to 12 of its largest broker partners’ Web sites this fall (http://www.truliablog.com/?p=207)—Hitwise verified. 2) Quality: We’ve build tools to help users self qualify in the early stages of home search. Take a look at our user survey (http://www.truliablog.com/?p=216): of buyers on Trulia, 81% plan to buy a home within 12 months (40% in the next 6), 52% are prequalified for a mortgage, 69% are not yet working with an agent, 52% earn over $100K per year, and 94% will likely return to Trulia in the next month. Not a bad audience to send to your partners.
For those who are skeptical of delivering listings they believe will be sold back to them, Trulia has opted not to go the route of lead seller. (Admittedly, we have the benefit of hindsight from our Internet predecessors.) Instead, we’re investing substantial resources in optimizing partner listing links in the major search engines, developing new tools to engage an audience of interested home buyers and connecting them with real estate professionals when they’re ready to see a home.
Submitted by Anonymous on November 29, 2007 - 4:16pm.
In response to Kelly's post and why Trulia is a sham--->
#1 Kelly said "The difference between newspapers and a Trulia is that listings and profiles on Trulia.com are free – always."
Actually, the difference is that newspapers are true media outlets that attract readers and eyeballs, whether or not they have listings for homes. People read newspapers for news, not home listings. How long would a newspaper last without news stories?
Unlike a newspaper, Trulia is not a true media outlet. Without listings from agents and brokers, Trulia's traffic will disappear. Heatmaps and other bells and whistles on the periphery of home search are simply not enough to attract eyeballs, and the folks at Trulia know it.
The jury is still out on zillow and whether it is a stand alone media outlet. The z boys were able to attract a huge web audience at their launch without listings, but recent moves to acquire listing feeds appear to indicate that zillow has realized they cannot maintain or grow their audience without the fundamental ingredient of real estate traffic - content provided by millions of agents in the form of listings.
#2 Kelly said "we’re investing substantial resources in optimizing partner listing links in the major search engines"
This is simply an outright lie. I have never seen a straight link on Trulia to any external site (or a link without a no follow tag). If my assertion is wrong Kelly, please respond with a link to a page on Trulia where we can see a link that provides SEO benefit to the recipient.
Only brokers and agents who are completely clueless about SEO, and the Internet in general, are buying into Trulia's lies and providing listing feeds. For example, the brokers up in the Northwest, who get the Internet as well as anyone, are not playing ball with Trulia.
#3 Kelly said - "Volume: Trulia was a top 3 referrer of online traffic to 12 of its largest broker partners’ Web sites this fall"
The reality is that Trulia may have a lot of traffic on a national basis, but when you break down their traffic to a specific city or neighborhood, trulia is irrelevant. They are a non-entity with consumers. I ask all my clients if they've heard of trulia...not one of them has. In fact, most agents have never heard of trulia.
zillow, on the other hand, is a known brand by consumers, and as a result, zillow is also known by agents (mostly due to those crazy questions we have to address about zestimates.... no mr buyer, we probably can't buy that home which is listed for 750K for 500K because zillow says it's worth 500K.)
Bottomline- Are realtors and brokers going to live by the wise words of the Who: "We won't get fooled again!"
...or should we go ahead and create another Realtor.com to bend us over, again and again and again, with ridiculous fee increases. The difference this time around is that the trulias of the world don't have to play by any NAR rules. Stuart Wolff must be chuckling...from his jail cell.
Submitted by Anonymous on November 30, 2007 - 10:17am.
What happens when/if brokers decide to start syndicating their listings and start charging outlets like Trulia and Realtor.com to display their listings? This may or may not be the right thing to do. However, does anyone see this as a possibility? Just like news articles and other content, the listings are what bring visitors to these sites. Thoughts?
Submitted by Anonymous on December 4, 2007 - 5:00am.
its now web 2.0 so its sharing informations so its okay
Submitted by Anonymous on December 4, 2007 - 5:47am.
I have to agree with John here, it's Web 2.0 and sharing information is ok. I just wish there was a way to insure ALL the listings were made available to the public.
Both Zillow and Trulia don't index everything and some of what is indexed is not correct. Not quite sure why this is so, it may lead back to the "garage in garage out" theory of the data stream. Whatever it is I am frustrated trying to explain to a consumer the listing the found on xxx sold 6 months ago. Duh.
Submitted by Anonymous on December 4, 2007 - 6:27am.
The lead aggrators would not exist if the real estate industry was doing an effective job of Internet marketing. Realtors have failed to provide the services that homebuyers want thereby creating the opportunity for these companies to capture the on-line buyers.