What if you woke up one morning to discover that real estate brokerages had all decided they would no longer publicize other brokers’ listings on their own websites, and that they weren’t going to allow their own listings to appear on their competitors’ websites, either?
Internet data exchange (IDX) — the cooperative system that allows the general public to see information about all of the listings contributed by cooperating brokers in a given market — has been showing signs of strain in recent years.
First, there was the debate over whether brokers and agents could allow search engines like Google to crawl their sites and "index" their IDX listings in order show up higher in search results (it took an amendment to the National Association of Realtors’ IDX policy to secure that right).
Now, NAR is debating how much freedom brokers and agents should have to distribute IDX listings beyond the approved IDX websites run by brokers and multiple listing services (MLSs) — to mobile devices and social media sites, for example.
At times during these debates, some have warned that if the rules governing IDX are relaxed too much, brokers will withdraw their listings from the voluntary system.
IDX rules — each MLS has its own, usually based on NAR’s IDX policy — require that sites publishing IDX listing data keep them up to date, identify the listing broker of each property, and refrain from running advertising around listings. If listing brokers feel those protections are being eroded — or that their IDX listings will end up on non-approved sites — they may drop out of the system altogether, the thinking goes.
Third-party sites like Realtor.com, Zillow and Trulia are not allowed to publish IDX listings. The listings that brokers and agents send to those sites are often collected by companies that aggregate listings data and syndicate it to multiple sites. Syndicated listing feeds are not subject to IDX rules.
Last week’s announcement by Edina Realty that it plans to stop syndicating listings to Trulia and Realtor.com because of concerns about ads for other agents that run alongside listings the company represents has stirred up the debate about the use of listings as website content. Edina Realty says it will continue to contribute to IDX listings pools and publish other brokers’ listings within its markets.
My friend Rob Hahn outlines, in his charming "throw a grenade into a room and run for cover" style, recent events at the NAR conference in his article "Extinction Event Horizon." What he’s talking about from an operational standpoint — frustrated real estate practitioners seriously investigating alternatives to the current MLS/IDX tie-up — seems clear.
I need to be sure to include my disclaimer here: I don’t practice real estate now nor have I ever practiced real estate. If anything I write in this column sounds as if I’m telling anyone how to practice real estate then there’s a misunderstanding. I know strategy and technology. The operations and practice of real estate is something I learn about daily from all of you.
With that out of the way, let’s imagine a future in which Rob’s primary prediction comes true:
1. The MLS remains intact as an internal system of sharing information as a business-to-business network to help service existing clients.
2. The IDX system, as a marketing tool to attract new customers, goes away and whoever owns property data is then responsible for how that data is syndicated or displayed in marketing efforts.
If this were the future you are living in, would your marketing efforts change? Would your marketing landscape change?
Even if you don’t find this potential future to be likely, and especially if you find this potential future uncomfortable, this is a good exercise to go through.
Futurists, strategists and visionaries engage in this kind of exercise all the time. Not so much in an attempt to prepare for every possible future event, but to identify current and near-future assets, opportunities and weaknesses that may be overlooked.
Marketing in a post-IDX world
I’m going to continually refer to "data owners" because there is always lively conversation around the idea of who "owns" real estate listing data and I’m too cowardly to take sides in that debate.
The main change in the proposed future involves the online display of data for marketing purposes. If online marketing has no appreciable effect on your business, then the exercise is simple: Keep doing what you’re already doing.
For the rest of you, there are some different potential directions. The direction that might work best depends not on the size of your organization but on the amount of data that you own.
While size of organization might generally be an indicator of the amount of data you own, it isn’t necessarily. Viewing real estate organizations based on the amount of data that they own is different from viewing real estate organizations based on number of agents.
In many ways, this is the most significant change in thinking. I have encountered many businesses in the real estate industry that are based on a model of "as many butts in seats as possible" — human capital quantity plays. Changing to a model focused on quantity of data providing strategic advantage allows for many other options, which I won’t get into in this column, but touched on towards the end of my own article "Everything that can be measured will be."
If your organization controls a lot of listings then you will be able to use that data as a strategic asset for online marketing.
"A lot of listings" is probably best measured as a share of the total listings in your market area. This is important. It isn’t measured as "I have double the average number of listings in my market." To use your data as a strategic asset having double the amount of the organization down the street probably isn’t enough. You need the largest percentage of the whole.
If this is the case, eliminating the appearance of your data on any website other than your best-converting Web property is the way to go. No syndication. No opt-in to let other real estate practitioners show your data. Nobody else. You hoard the data so there is a single source: your site.
This strategy is focused on search engine marketing to bring new visitors to your site that might not have a current affinity or relationship to your brand. By limiting your data to appear only on your site, you will create a large quantity of relevant real estate content for search engines to index and attribute to your site alone.
The search engine optimization concept at play here is called duplicate content. Since there is only one place to get access to your vast pile of data, search engines don’t have to decide between sending a search visitor to your site versus Trulia, Realtor.com, your local public MLS site, or another broker with an SEO whiz on staff. There’s only a single source for this pile of content: your site.
Some will argue that this approach, hoarding the data, doesn’t serve the home-selling customer. While their heart is in the right place, I think they’re wrong.
By hoarding the data, an organization with a large share of a market’s listing data will more easily rise to position No. 1 in search engines. This will in turn drive more relevant traffic to the website that has the listing. More importantly, it will drive more relevant traffic to the website where someone has a very distinct advantage in returning the phone call.
It’s a strategic trade-off: Do more potential buyers in your market start a search at one of the real estate aggregators or do more potential buyers in your market visit a search engine and type "YourTown real estate for sale"?
The distinction here is that advertising and marketing a house is not the same as distributing listing data to every possible place.
I suspect that organizations taking this approach will have a number of challenging conversations about this. Internally, there will likely be data ownership conversations. Externally, there will customer education conversations.
But if you have a significant market share, this approach is sound strategically. It is difficult to replicate and within your control. It serves your customers by positioning your site at the top of search engine results for relevant search terms in your market.
Ducks that must be in a row for this approach to be effective:
- You are the owner of a large share of your market’s listing data.
- Your own site has the basics of on-site search engine optimization features.
- You have the organizational courage and ability to withdraw from all syndication relationships.
Nimble internal quality focus
Rob’s event horizon post paints a very bleak picture for those who lack the quantity of data required to pull off the previous approach. I disagree with him there, at least in terms of marketing. I think there will always be room for efficient, quality professionals in any industry.
They won’t be able to compete using the same techniques, however. If significant volumes of data are removed from their sites, small data owners will have to find a way to compete that either:
- Doesn’t rely on search, or
- Amplifies quality search engine optimization techniques.
There are many online marketing techniques that don’t rely on search engine optimization. Well-targeted paid advertising, for example. Or effective, focused social media usage. Or blending the online and offline worlds through locative media and events.
Small data organizations that rely on organic search will have to significantly up their game. More quality content will have to be created from scratch to replace the listings from the larger data organizations that will likely be pulled. More work to weave the Web property into the fabric of the local online chatter.
For this segment of the market, the techniques employed will likely look similar to pre-online marketing days with some additional content creation layered on top.
Success will require a focus on developing skills and branding that are difficult to replace or imitate. This will, in turn, require a specific talent in human resources both in identifying good members for the organization as well as training and continuous learning for existing members.
Unfortunately for small data owners, training and HR is something that larger data owners can likely replicate. In the same way that an organization isn’t large because it owns a few more listings than the organization down the street, the small data owner is going to have to be magnitudes better at HR and training than any other organization.
Ducks to be in a row in order to go down this route:
- Exceptional HR (both recruitment and ongoing learning and satisfaction);
- Ability to publish a quantity of high-quality, unique, relevant content;
- Mastery of local marketing landscape; and
- Exceptional, deep, meaningful branding work
There are lots of things that could have an effect on these different strategies. The large data owner will be at risk to changes or disruptions in search. The small data owner will be at risk of changes or disruptions in business models and local advertising.
And neither of these strategies is especially easy to execute. There will still be work to be done.