Editor’s note: The rise of social media has come to define the new Internet, or Web 2.0, and many in the real estate industry are embracing it with open arms. The age of Internet participation and instant and widespread communication is here. In this three-part report, Inman News dives into the social media craze and uncovers what’s working, what’s not working and what’s just plain fun. (Read Part 2 and Part 3.)
Blogs, social networks, YouTube, MySpace, Wikipedia — these are all terms and services synonymous with the rise of social media, which has come to define the new Internet, or Web 2.0. The age of Internet participation and instant and widespread communication is here.
The rise of social networks began with the explosive success of MySpace, which still has the lion’s share of social network Web traffic — 47.2 million unique visitors in September 2006, according to Nielsen//NetRatings. But today plenty of creative alternatives are debuting — and some in real estate.
Social media enables people from around the world to assemble and network around common interests. Participants build online profiles and engage in online networks or communities either through blogs or forums.
The new phase of online social networking is going niche. Hundreds of networking sites made especially for certain demographics or personal interest groups are coming online — including some created just for real estate professionals. The sites open a wealth of possibility for finding new ways to network with colleagues and potentially gain more clients.
Whether the investment of time and money for a real estate professional to be entrenched in these networks results in lucrative business opportunities remains a mystery for most of the industry. Meantime, those professionals who are involved in these sites relish the chance to debate and encourage their colleagues on business issues and blogging techniques.
Outside of real estate, social media is changing communication. While some critics say the surge will die off as people grow weary of maintaining dozens of online profiles, others say the change is already significant.
Forrester Research analyst Josh Bernoff says, “Within corporations, employees are redesigning how they work together — management can only hang on for dear life. This groundswell is coming to your industry, your company, your government, your church — at a rapidly increasing pace.” Bernoff, a vice president at Forrester, wrote this at the Groundswell blog, which examines social media and serves as the title for Bernoff’s upcoming book.
ActiveRain, the most prominent real estate-focused social network, emerged last June and in less than a year has amassed more than 20,000 real estate broker and agent members. The site now gets about 150-200 new members each day, and site traffic has doubled in the last month and a half, according to co-founder and CEO Matt Heaton.
The Active Rain Real Estate Network, which hosts real estate blogs and forums, uses the same model employed by hugely popular sites such as MySpace and YouTube. The site’s developers provide a free portal, but it’s up to users to supply the content.
The “user-generated” content created by ActiveRain members generates traffic and more users, boosting the site’s popularity in a self-perpetuating cycle. It’s become a sort of online water cooler for agents to blog about real estate issues, share advice or just entertain each other.
Heaton, like many others, believes that blogging and other social media activities will continue to grow in real estate over the next couple of years. The executive sees a lot of opportunity for growth since 20,000 professionals is still just a tiny portion of the million-plus agents in the business.
ActiveRain expects to collect about 50,000 members by the end of the year, though Heaton said the pace of growth has been picking up so fast he feels that number may be too low.
Online social networking is looming large outside of real estate. Nearly everyone knows MySpace and its more professionally focused counterpart, LinkedIn, which emerged in 2003 as a place for business professionals to build online networks of contacts. There’s also Facebook, which started as a college student-only site, but has since opened to the general public, and new sites crop up nearly every week. (See Part 3 of this report for more on real estate-specific networks.)
Some agents are using Squidoo, which enables users to build a profile page or “lens” to share information, blogs, links and pictures. Charles and Jacqulyn Richey created the Squidoo Realtor Group for Realtors to include their profiles.
As social networks go niche, one of the latest creations to gain a lot of attention is Ning, a social networking site created by Netscape co-founder Marc Andreesson, that enables users to build their own custom social networks.
Marketers clearly are embracing social networking, shown by projections for advertising on these sites. Ad spending on U.S. social networking sites in 2007 is expected to reach $865 million, up from $350 million in 2006, and continue increasing to $2.15 billion in 2010, according to advertising and marketing research firm eMarketer.
Niche networks are expected to generate $45 million in revenue this year, eMarketer predicts.
Many analysts also point to Google’s deal with MySpace as an indicator that this space is hot and getting hotter. (In August 2006, Google promised to pay $900 million in advertising revenue to News Corp. for putting its search engine on MySpace.)
But even as thousands of real estate agents flock to ActiveRain, the way homes are bought and sold remains unchanged. Many industry professionals are enthusiastic about new social networks, but are also unconvinced that these sites will change the habits of top-producing agents.
“I’m more of a sales pragmatist,” said Michael Davin, executive vice president and director of marketing for Catalist Homes in Hermosa Beach, Calif. “I get how people could say that real estate is a referral-based business and all of this is taking that to an online extension of this. But the referrals are still from people who’ve done business with the agent.”
Davin says the top-producer “leader board” in his office is still full of agents who spend more time out in the field selling than they do in front of their computers blogging or engaging in social sites.
The 20-year sales veteran says that while he sees value in sites like ActiveRain that offer a place for agents to connect with each other, “Realtors connecting with other Realtors and industry vendors won’t really do the agents much good. Someone needs to bring the consumer to the party.”
Consumers for the most part have been missing from popular real estate social networking and blogging activities. It’s true that some agent bloggers have struck gold with their blogs and now maintain that all their business is generated from their blogs, but it hasn’t caught on as a consistent lead-generation method for the majority of agents.
The popular belief still follows the time-in-the-field rule, which equates top sellers with time spent selling rather than time spend fixating on Web sites.
“I want to see an agent who’s doing 50 deals a year in one of these networks,” Davin said.
Many in the social media scene would say, “Hold on, not so fast.” Social media is still in its infancy. In real estate, ActiveRain is growing rapidly and indeed does have plans to bring the consumer to the party.
The company recently launched a beta version of its consumer-facing side, Localism, which enables consumers to ask a question that will be answered by real estate professionals who are members of ActiveRain.
Localism won’t be a lead-aggregation site, instead sending free traffic back to contributing members. The site will offer premium sponsorship opportunities and “run some additional advertising that doesn’t create conflicts with our members’ interests,” Heaton said when it was revealed.
Davin said he sees a lot of value for agents at ActiveRain, and he can see where the Localism part is going. But he still questions whether this will be enough to satisfy consumers.
“There’s a Catch-22 between the social content that consumers want to see and the Realtors’ ability to provide that,” he said. “I’m going to guess that from a local market perspective, the independent producers of content will have a better time attracting consumers.”
Davin bases his skepticism on agent blogs he’s read in his area that are about local market conditions, which he said tend to paint the market as rosy even as sales clearly are stagnant.
Despite his doubts, Davin also believes social media will continue to grow in real estate this year. He expects several entities to build more networks designed to connect agents, vendors and consumers.
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