Real estate agents, broker-owners and multiple listing services are rightfully concerned about two major issues when it comes to syndication to listing portals: data accuracy and an issue that has become known as “the three-headed monster.”
Part 1 of this series outlined how data accuracy must be a concern for any agent or brokerage that syndicates their listings. The second concern is the “premium placement model.”
Premium placement: the three-headed monster
While data accuracy is a yawn for the agent population, “premium placement” has been a hot-button issue for almost a decade. The term “three-headed monster” has become shorthand to describe listing portals or brokerage sites where the listing agent’s information is pushed down to the bottom of the page (or not even mentioned) and where one to three other agents’ pictures and their contact information are listed adjacent to a different agent’s actual listing.
Where the three-headed monster does and does not live
Realtor.com does not currently post information from competing agents adjacent to another agent’s listing. If the agent has paid to be a featured agent, her picture will appear prominently displayed on the right side of the page. If not, there is a field located towards the bottom of the property information where it says: “brokered by.” The listing broker’s name and office number is supplied, but the individual agent’s name does not appear. An unbranded “Connection for co-brokerage” lead form that allows consumers to provide their contact information to buyer’s agents who are paying realtor.com for leads often appears.
Trulia displays the listing broker’s information in two places: in small print immediately above the listing photo, and adjacent to the property description where the agent’s name also appears. Although Trulia provides a link back to the listing broker if provided in the listing feed, there is no link in either of those places for contacting the listing agent directly.
If the listing agent or their broker has created a free Trulia profile, the agent’s name, picture and phone number will appear in the “three-headed monster” located in the upper right-hand corner of the search page, and again at the bottom of the page. The agent will be identified in the contact form as the “Listing agent,” and will receive leads along with other agents that the consumer elects to send inquiries to using the form.
According to Alon Chaver, Trulia’s vice president of industry services, Trulia does notify the listing agent when a lead comes in: “When a consumer inquires about a property, the listing agent always gets the lead at no cost. Consumers may also choose to connect with buyer’s agents, and the number of agents who receive the lead varies by the market they work in and by the number of agents the consumer chooses to send it to.”
Like Trulia, the three-headed monster appears in the upper right-hand corner of the search page on Zillow, as well as at the very bottom of the page. Zillow does list the agent’s name, brokerage and phone number directly below the second batch of pictures at the bottom of the page.
According to Amanda Woolley, Zillow’s communications manager, “The listing agent will always appear first if they have a free Zillow account. It’s then up to the consumer which agent they click to contact. They can choose to contact one or all the agents listed.” (See screen shot below.)
The marketing arms race
In a recent Inman News article titled “Zillow, Trulia, realtor.com set for 2014 consumer marketing arms race,” reporter Paul Hagey outlines some of the details about Zillow’s $65 million ad spend, as well as Trulia’s $45 million spend. Realtor.com operator Move Inc. has yet to announce how much it intends to spend.
Spencer Rascoff, CEO of Zillow, made a very telling remark on a recent investor call that may shed some light as to why the portals are throwing so much money at advertising for 2014. According to a GeekWire story last month: “Even with the rapid audience growth, Rascoff said that the company has a ‘long way to go’ until it gets to total market penetration. In fact, offering some back-of-the-napkin math on today’s conference call, Rascoff estimated that homebuyers and sellers who are nearing a home decision turn to Zillow in less than 5 percent of real estate transactions.”
The real issue that advertising doesn’t solve
Agents consistently gripe about the quality of Web leads, regardless of who generates them or how they are delivered to the agent. Part of the issue is that even when agents pay for leads or for premium placement, half of the Web leads go unanswered. Of those that are answered, only a small percentage of agents respond to the lead within five minutes when the likelihood of conversion is the highest.
It’s much easier for an agent to say, “Internet leads are lousy” and quit the lead service than it is to say, “I do a poor job in terms of responding to leads in a timely manner.”
A way out?
One way for the portals to increase their revenue is to scrub their leads and then sell those leads to agents when the clients are ready to transact. Using the relocation model, they could charge a 25-30 percent referral fee for this service.
The challenge with this approach, however, is that consumers have always relied primarily on personal referrals to select an agent. Research also shows that sellers are most likely to list with one of the top three firms doing business in their area. As Rascoff’s remarks indicate, only about 5 percent of the consumers today are looking for an agent on their portal.
Fad or here to stay?
The heart of the challenge the portals face is that most of their agent clients are either ignoring or not responding quickly enough to big chunks of their leads. Throwing money at marketing and advertising is not going to change this agent behavior.
Will the data accuracy and “three-headed monster” issues cause the portal models to morph into something different or to fade away entirely? Or will their current path prove to be the right one that proves their critics wrong? Only time will tell.
Editor’s note: This article has been revised to correct Trulia provides links back to listing brokers when that information is provided in listing feeds, and that any agent who creates a free Trulia profile will have their contact information displayed alongside listings they represent, and receive leads generated by the contact form displayed next to their listings (the “three headed monster”).
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.