Zillow's 'featured listings' aren't what they used to be

Real estate agents who advertise on Zillow with “featured listings” are used to some perks — they’ve been able to keep competing agents off their listings and receive prominent placement in search results.

Recent changes to featured listings, however, have increased the cost of the first benefit and eliminated the second.

The changes seem to advance the listing portal’s professed aim to winnow its Premier Agents to a smaller group of big spenders who excel at converting leads into transactions. It also underscores the potential risks of investing heavily in lead sources that can quickly shift underfoot.

How featured listings work

Each featured listing claimed by Zillow agent advertisers, known as Premier Agents, is shielded from the photos and contact information of other Zillow agent advertisers who normally appear on listings. Only the listing agent appears on featured listings.

Premier Agents used to often receive a bundle of featured listings for purchasing buyer’s agent ads on listings. But the listing portal recently made featured listings only available as a standalone product, decoupling them from its flagship ad offering.

This change to featured listings won’t impact Premier Agents who signed up before 2015, said Zillow spokeswoman Amanda Woolley in an email. They will be grandfathered into the new featured listing program, she said.

But new and old Premier Agents alike will be affected by a second change made to featured listings. The listing portal recently nixed its “Featured” search setting, meaning “featured listings” no longer are, well, “featured” to consumers: they don’t receive any promotion in search results.

Screenshot showing Zillow search results page on Jan. 2, when the “Featured” search setting still existed. Zillow has since removed the “Featured” search setting.

The changes Zillow has made to featured listings could increase the number of listings that display ads for Premier Agents and funnel more traffic to listings that present those ads to consumers. That would expand the pool of “impressions” — the number of times an agent’s ad appears on listing pages — that it can sell to Premier Agents.

When asked if this was why Zillow had revamped its featured listings, Woolley said, “The search results are now based on the homes that we believe are of the most interest to the home shopper. Home shoppers are more likely to interact with a listing that closely matches their search criteria, and in turn, more likely to interact with an agent.

“We are always trying different strategies to deliver a better experience to the agents who choose to market their listings on Zillow.”

‘Deemphasizing’ featured listings

Traditionally, many agents who paid for buyer’s agent ads on Zillow listings would receive a batch of featured listings for no additional charge on top of what they spend on monthly listing ad impressions.

The size of those batches has steadily declined. Woolley said that Zillow had been “deemphasizing” featured listings for years.

Woolley said the reason Zillow has deemphasized featured listings is that “many of our partners told us they preferred the free benefits” they could receive in exchange for feeding listings to Zillow under programs like Zillow Pro for Brokers. She said those partners also told Zillow that “featured listings were less important to their marketing strategy.”

Under Zillow Pro for Brokers, brokers who feed their listings to Zillow get prominent display of their agents and branding on their listings. Unlike featured listings, however, listings provided via Zillow Pro for Brokers are not shielded from the ads of competing agents.

PAA Research, an investment research firm whose owner is shorting (betting against) Zillow’s stock, said in a recent report that, in 2012, Premier Agents who bought ad impressions were allotted up to 50 featured listings for no additional fee on top of their spending on ad impressions. By last year, the listing portal was allocating just five featured listings to Premier Agents who bought ad impressions, and only if they spent at least $350 on ad impressions, according to the report.

This chart from PAA Research purportedly shows how featured listings part of various Zillow ad packages have changed over the years.

$350 for 10 

Zillow said it began offering up to 10 featured listings for $350 a month in September. The listing portal didn’t respond to some questions from Inman about featured listings, so it was difficult to determine whether the introduction of the featured listing package in September coincided with its removal of featured listings as a possible benefit of buying ad impressions.

Zillow currently doesn’t advertise featured listings as a potential benefit of buying ad impressions, and many Premier Agents that Inman spoke to were unaware that Zillow no longer sells ad impressions bundled with featured listings.

Trulia also offers featured listings as a standalone product, charging $200 a month for 10. Zillow didn’t respond when asked if Trulia featured listings only appear on trulia.com and if Zillow featured listings only appear on zillow.com. (Premier Agents who buy ad impressions receive those impressions spread across both Zillow and Trulia listings.)

Woolley wouldn’t specify when the listing portal had removed the featured listing search setting, saying only that it had happened “some time ago.” The featured listing search was still active on January 2, according to a search on Wayback Machine, an Internet archive website.

Impact on agents

Although Zillow listings typically display the listing agent and three Premier Agents on the right rail of a property page, Premier Agents can designate some of their listings as featured listings to shield them from competing agent ads so that they show up as the only suggested contact. That can boost the odds that they — rather than competing Premier Agents that would otherwise appear on their listings — receive inquiries from visitors to their Zillow listings.

Zillow’s new model for offering featured listings will increase the cost that some agents will have to pay if they want to keep their listings free of ads from competing agents.

David Fresquez, an agent at La Jolla-based Re/Max Associates who says he spends about $200 a month on ad impressions, says his Zillow sales representative told him that Premier Agents who spent $250 a month in October on ad impressions could designate all their listings featured listings for no additional charge.

Now, however, he would have to spend $350 a month for Zillow’s featured listing package regardless of his spending on ad impressions, even if he only wants one or two featured listings, not the 10 included in the package, he said his sales representative told him.

By increasing the cost of featured listings, Zillow is likely to reduce their number. That should expand the number of listings that present agent ads to consumers, creating a larger pool of ad impressions that Zillow can sell to Premier Agents.

Featured listings no longer promoted in search results

As formerly one of two primary search settings (the other was “newest”), the featured listings setting previously gave prominent placement to the featured listings of Premier Agents in search results, increasing the likelihood that consumers would visit listings that didn’t show Premier Agent ads.

Now that featured listings no longer get preferential treatment in search results, consumers are more likely to see and visit listings that serve Premier Agent ads, boosting the quantity of ad impressions Zillow can sell to Premier Agents.

Zillow is testing labels including “Homes for You” and “Relevant” for the name of the search setting that will replace the “Featured” search setting.

“The search results are now based on the homes that we believe are of the most interest to the home shopper,” Woolley said, when asked if featured listings still received promotion in search results.

Until Tuesday, a page on zillow.com explaining the portal’s ad products said that featured listings “appeared at the top of search results.” Woolley said the page was out of date. Zillow has since removed that language.

“The biggest value of a featured listing is being the only agent displayed on the listing, versus where the listing appears in search results,” Woolley said.

Freeing up ad inventory

PAA Research’s report casts Zillow’s efforts to free up ad inventory as an attempt, in part, to compensate for agreements Zillow has with major real estate firms that have shielded many of their listings from third-party agent ads.

Woolley didn’t agree with that assessment, countering that, though “we work closely with all our partners to develop a relationship that fits their needs,” the “vast majority” of listings on Zillow serve buyer’s agent ads.

Zillow recently uncorked some ad inventory that had been plugged up by a previous agreement it had with Keller Williams Realty.

Under the previous agreement, Keller Williams listings didn’t include contact forms that visitors could fill out to connect with Premier Agents at competing firms. An updated agreement permits the display of such forms.

Unlike lead forms for buyer’s agents that appear on other Zillow listings, the forms on Keller Williams listings don’t show the photos or contact information of the agents that will receive the information submitted through the lead forms. The updated agreement also provides Keller Williams listing agents with more conspicuous branding on their listings than they received under the previous agreement.

Email Teke Wiggin.