A Familiar Scenario

Classified AdsLet’s say I owned a commercial website like, say, The New York Times online. I have editorial content and ads that run throughout the site. There are ads all over the place where you consume content but also there are entire sections with nothing but ads. Let’s call that the classified section. Now, unlike something such as Craig’s List where it’s free to place the ad and free to sell your wares, I require you to buy these ads upfront. I get paid whether or not you get a single phone call or email. I get paid whether you get ANY response whatsoever. I simply provide the eyeballs because I am a destination site and people know to come here to get a great user experience and great content. This all sounds pretty normal and you are all pretty familiar with this concept, right? I am sure that most people reading this have used this type of advertising in the past – and maybe at present. There’s nothing wrong with it and it has shown results for some time.

Here’s the thing: sites like The Times are in trouble and have been for a while. They can’t price out online ad space competitively enough to cut it in this market. Perhaps this is not the case with your local paper or classifieds sites/blogs but that may only be because you (or they) haven’t really been able to measure proper ROI on your advertising dollars. This is a hard thing to do and this is not a pot shot at either of you. However,there are plenty of people that place ads like this to sell a house, apartment, car, bike, or whatever, that never get any response. The ad runs its course and your money is spent with a ZERO ROI.

Another Scenario

CowboyLike I mentioned, Craig’s List is free of charge. So, other than your time, the investment is zero. Odds are better to have a positive ROI right? Perhaps, perhaps not. The thing with Craig’s List is that it’s pretty much the wild west. Anyone can use this service and are left to their moral compasses in terms of the claims and content of their ads. It’s pretty easy to set up a bogus ad to simply generate leads, create a bait and switch environment, or just downright swindle people out of their hard earned cash. People can report a spammy, scammy, or fishy ad but they don’t put a tremendous amount of effort into policing the system. It’s really a buyer beware kind of atmosphere. Doesn’t sound like a very professional environment – especially if you are looking to market a big tag item, huh? Well, it’s not. Oh, and the look and feel are also god ugly.

In a Perfect World

Well, the best way to do this is to create your own website so you can control everything and the traffic is yours. Then again, that takes development resources to build and maintain. It also will take online marketing expertise that is separate from the code jockey you have building the actual site. They will have to be well versed in user experience, design, web analytics, and content strategy. Oh, and they will have to be specialized in the vertical you are trying to sell to. This wouldn’t be free and if you want to do it right, you’re looking at six-figures+ to get this up and running. Then you will only have to pay for maintenance and modifications to the site to tweak things and update your marketing efforts. You can go cheap on the staff for probably under six-figures – a year.

What to do, what to do….

House for SaleSo you want a good, clean look and feel with a solid user experience that is safe for buyers and sellers and will be free for you to use for selling all of your stuff. Well, I don’t know any place that is good for all of your stuff so let’s just focus on one type of item for sale and maybe consider others once we have solved this riddle. For the sake of time, let’s use the biggest ticket item we can think of since solving that riddle will make the solution easily applicable to other smaller and cheaper things.  The biggest ticket item I can think of that most people will have the opportunity to buy or sell is real estate. So let’s use that shall we?

ad·ver·tise·ment – Noun: A notice or announcement in a public medium promoting a product, service, or event or publicizing a job vacancy.

For the sake of clarity, let’s not talk about ads to sell a home as ‘ads’. In the industry they are referred to as ‘listings’.  Make no mistake though; for consumer purposes, they are ads. They consist of:

By this point, you have probably figured out that I am leading you somewhere and in a bit of a sarcastic fashion. Realistically, there are not a lot of places you can go to get this solution. The irony is, that you can get them all for free. Sites like Realtor.com, Yahoo! Real Estate, Zillow, and Trulia are free, at least at their basic levels. In fact, at the time of this post, the combined traffic of any two of the above mentioned sites is greater than the remaining top ten sites combined. Realtor.com actually gets your listings directly from the MLS which you are a member of and you don’t have to do ANYTHING to take advantage of it. With others, you have to at least go up and claim your listing, at most add it to their systems yourself. They are also free to use though. Depending on your preference, each has their strengths but they are all better than most other real estate sites and are certainly better than anything you could dream of developing on your own. We’re in agreement, right?

You Don’t Have to Buy ANYTHING

Your PocketsThe big complaint I have heard about these sites is that they always seem to have their hands in the agents’ pockets. I still don’t get this. We’ve already established that these are ads, right? The purpose of the ad is to get exposure for the property in an effort to sell it, right? And these sites get monster traffic, right? So what’s the problem?

Each of these sites took considerable resources to build and maintain. They don’t charge you to have your listings in there. So how do they make money? Well, they offer people the ability to purchase additional, preferred ad space/placement – the only way they can monetize. Yes, agents listing homes in your area will have the ability to upgrade their listings to make sure they come up higher in the search results than yours. This is their prerogative, not the site’s fault. They are increasing their marketing spend and if they get better results from it, why shouldn’t they?

Dual Agency Isn’t Cool

All AcesAnother complaint I hear is that other agents having the ability to purchase preferred placement of their contact info on these listing pages. Again, they are spending more money to capture leads. You can get leads in a bunch of places. And they choose to get their leads from these sites. Why are these sites off limits?

The only reason a listing agent should be upset about someone paying a premium to get leads off of their listings pages is if the listing agent is hoping to get both sides of the transaction or act as a ‘duel agent’. Oh, and get them for free. I personally think that the whole notion of dual agency is lazy, greedy, and unethical. If you want to read up on the concept a bit you can check it out here. If you are the listing agent, you are guaranteed one side if the home sells while it’s listed with you. If someone else brings a buyer then why would you care where they got that lead? Again, the exposure cost you nothing. All that’s effectively happened is that they buyer’s agent has shrunk their overall compensation by the amount of the spend on the site your listing sits on. And if the buyer agent got a lead from that site, they paid for a lead that has already gotten exposure to your listing. Both buyer and seller have representation. It’s win-win.

Who You Are Really Pissed Off At

The fact of the matter is, these sites are not the bad guys. They built an environment where consumers come to where they can learn, interact and shop. And they are doing it well. There is nothing wrong here. You are not really upset that these guys are selling leads. That’s what they set out to do. Should they be providing these sites as a public service? Of course not. You are not upset with these folks that are buying the leads off your listing pages. You probably do it too, on that site or somewhere else in some way shape or form. Who you are really pissed off at is yourself. You’re mad because these sites have created a more open and free market for your competition to better compete with you in your market. You’re mad because you either don’t get the technology, don’t want to spend the money, or don’t want anyone competing in your space. None of these reasons are valid in my opinion because you reap the same benefits in the other direction.

Light BulbIt’s time to stop blaming these sites for creating an environment that makes you uncomfortable. This is your problem, not theirs. It’s time to consider the fact that perhaps they are able to fill a void in the industry that the agents and brokers previously haven’t been able to – or these sites would have never come to be. Necessity is, after all, the mother of invention. It’s time to understand that nobody is making you do anything you don’t want to do. Pull your listings, advertise your properties on your own site and generate your own traffic. Or better yet, put your listings in the local paper and not the evil evil Zillow/Trulia/Realtor.com. It’s time for you to focus on the business of real estate and make changes to the things you control – not someone else’s business. It’s time to recognize that these sites are giving you exactly what you want – a free, good looking place to put your ads for free with no obligation on your part that gets ridiculous amounts of exposure for the product that you are marketing. For free. Yes, free with an option to upgrade.



24 Responses

  1. “Who you are really pissed off at is yourself. You’re mad because these sites have created a more open and free market for your competition to better compete with you in your market. You’re mad because you either don’t get the technology, don’t want to spend the money, or don’t want anyone competing in your space.”

    Yup. They are kicking everyone’s a** at SEO, and the industry doesn’t like it. If agents/brokers/MLS’s don’t like it, they need to spend the money, hire the right people, and beat the portals at the online marketing/seo game. I’m tired of hearing complaining…if people don’t like it, do something about it.

    1. If I were an agent or broker I wouldn’t complain and I wouldn’t build my own. I’d use these services for what they were worth unless the pricing got out of hand – in which case I would start to let the industry know they were too high. They will only charge what the market will bear….

  2. Patrick, from the point of view of a listing agent, your post rings true.  But those agents who choose to work  with buyers are the ones who have to pay for recognition on the portal sites.  Apparently there are enough consumers out there who are willing to choose a buyer agent based on a thumbnail picture and a link to keep this business model working.

      1. It’s a problem with the public’s perception of the industry, or rather people in the industry.  I really don’t have a problem with the portals; they perform a valuable service for the consumer, but there is value in dealing with a qualified agent on the ground (not necessarily a Z advertiser) vs. an algorithm in Seattle.

        1. Agreed. There’s space and a place for everyone. I don’t think that the portals have any intention (or interest) in replacing the value a real estate professional brings to the table.

  3. I have ONE easy question for Patrick Healy:

    #1 Have you ever sold a house? I’m thinking that the answer is “No”, because otherwise you would know that buyer leads from online listings very rarely buy the house that they inquired about.

    Intelligent, experienced agents and brokers know that. I don’t even WANT the leads from our listings to buy that listing. Acquiring a viable Buyer via an online listing does not Double Our Commission, and wanting that buyer to contact me does not mean I’m lazy or greedy.

    It simply means I now have ONE buyer and ONE seller.  Geez, do any of you R/E know-it-alls ever take the time to actually learn anything about R/E?

    1. I can appreciate that Jeff. So if that is the case, you can just as easily pony up the marketing dollars and get those leads too. Nobody is saying you can’t have them. What I have an issue with is that not only do listing agents not want to buy them, they don’t want anyone else to buy them either. 

      I am sure you can see the value in what Zillow and Trulia and the like are doing. They have created an environment where consumers want to come and research. If you can do it better I strongly encourage you to do so.  Then you can pull your listings off of these portals and just have them on your site. Let me ask you, are you opposed to IDX as well? Because your competition is going to put your listings there as well. Should they not be able to garner leads off of you listings there either? Don’t answer that, it was rhetorical. 

      To answer your question, no, I have never brokered the sale or purchase of a piece of real estate. I don’t tell real estate people how to sell real estate. My background is marketing and technology – and in that I have nearly 20 years experience – most all of which is online. I didn’t know that I needed a real estate license to discuss matters concerning online marketing and lead generation. 

      1.  Patrick- You don’t need real estate experience to discuss (real estate) online lead generation, you only need experience to discuss it intelligently.

        1. Wait, so let me understand this @ac14ae1b35877f4b463ee36bd4088c9b:disqus. Only people with a broker or agent license are able to intelligently discuss real estate marketing? Really? I know a couple of hundred people that would beg to differ. Would I need a degree in marketing allow me to discuss that topic intelligently? This topic is really as much about technology as it is real estate. Would you mind presenting me with your advanced degree in computer science or web development? 

          1.  I didn’t say you needed “a license”, did I Patrick?  I said you needed experience. Reading is Fundamental.

            There are 3 main ways for people to (try to) learn about real estate lead generation, at least from my POV.

            1- to actually do it. Experiment by trying various PPC, Trulia, Zillow, Craigslist, IDX and street level strategies and finding out what works for you by weighing the time, $ cost and the relative “value” of the leads generated via each method. Many brokers/agents do this every day. I don’t know of many (any?) consultants, pundits or Inman “rockstars” who do.

            2- to talk at great length (for extended periods of time) with people who actually “do it” daily, ask lots of questions, make suggestions and observe their real world results. Again- I don’t know of many (any?) consultants, pundits or Inman “rockstars” who do this either.

            3- to attend various confabs, BarCamps and Inman Alpha-Level Executive only get togethers where consultants, pundits and Inman “rockstars” tell it like it is to enthralled audiences of NAR Rotarians who live tweet about how your Powerpoint “Rocked the House” and everybody gets drunk afterwards.

            No one who has ever done #1 or #2 would ever try to float the preposterous “Dual Agency isn’t Cool” canard. this tells me that your expertise in online lead generation is almost entirely based on things you heard or overheard an equally clueless person say or write.

            ANYONE who has spent more than a week processing online leads knows that they rarely, rarely even look at, let alone purchase the home they initially inquire about.

          2. I think we have gotten off topic. At the end of the day it seems you clearly know what you are doing in terms of lead gen so I would recommend you pull your listings from all of these portals so nobody but you can monetize your listings and take it from there. Problem solved.The portals clearly don’t know what they are talking about since they are not people who qualify as experienced real estate people by your standards. They’re just technology people that know nothing about real estate right? They’ll never see any real success. 

            Hell, why not sever your relationship with your MLS and keep all of your listings exclusive to your site? With the money you save from not buying leads on a portal you can invest in other online marketing initiatives that will drive traffic to your site. Then nobody will be able to make money off your hard work – including you….

          3. Our (60 to 100) listings currently go to Zillow and Trulia via xml and have for about 3 years. Guess how many leads/inquiries I have received from those 2 in the past 6 months? Go ahead and guess!


            Here is the root of the problem, Patrick. We invest tens of thousands every year for an office, utilities, training, fees, insurance and of course our time and expertise to generate listings. Then we give it to them AND receive nothing in return. 

            F*ck. That. sh!t.

          4. I wasn’t being facetious Jeff. If it is not bringing you value you shouldn’t participate in it. I’m sure the leaders of ZTR would agree. It’s like anything else. Unless there is some value that they are bringing you, there’s no reason to be associated with them. 3 years with not a single lead would upset me too. I’m sure you have been on the phone with them. Maybe the only way to get those leads in your market is to pay for them. I don’t know. Does your listings being up there help them sell faster, in your opinion? If so, that could be looked at as the value.

          5.  We used to get leads, but that dwindled to nothing as they “tweaked” their business model. Does the exposure translate to business via other agents bringing buyers? Hard to say, but based on buyers’ penchant for tracking down the listing broker I’m gonna say probably not because we don’t get those calls from ZTR much anymore.
            Come visit us some day, I’ll show online lead generation from my POV.

          6. I’d like that. I’m always up for a new perspective. I still gotta ask though. If you don’t think it’s adding value and others are monetizing off of your work, why do you still have your listings in there? What’s keeping you in their system?

          7. “1- to actually do it. Experiment by trying various PPC, Trulia, Zillow, Craigslist, IDX and street level strategies and finding out what works for you by weighing the time, $ cost and the relative “value” of the leads generated via each method. Many brokers/agents do this every day. I don’t know of many (any?) consultants, pundits or Inman “rockstars” who do.”

            you’re right — MOST consultants, pundits, etc don’t do the real work to test. That said, @jimmarks at virtual results does. i worked for him for  a year and know that, for VR’s consulting clients, everything is tracked and measured.

  4. I don’t particularly care for the complaints about advertising rates or double-siding transactions, either, Patrick.  They’re understandable, but it’s just business.  Brokerages made the decision to put their listings on 3rd party sites, and their brokers will now reap what they sow. 

    However, the brokers should take a long look at the kind of picture that a 3rd party site is painting for their clients.  I wrote about this in Inman News last week. 

    Consumers are being shortchanged when they’re driven to syndication sites for listings.

    1. Thanks for the comment Sam. I don’t know if they are though. Think about it; the consumer is getting a better experience and, maybe more importantly, made hungrier for real estate because of it. I think these portals chum the market better and get people excited. If they could find a broker site that they liked as much I think they would be there.

      The complaining really gets to me for a few reasons. Some are just ignorant and feel that the portal shouldn’t charge for the leads. Is there a better model for them? Agents could all be given first refusal to pay upfront to put their listings in there and get all traffic and leads. I don’t think there would be any takers there. 

      Secondly, it rarely seems like those that have manned up and pulled their listings are really the big complainers – it’s the ones that have their listings up there and are complaining the whole time. To me, that’s like going over to your buddy’s house and complaining about the beer he stocked his fridge with as you crack one open.

      If someone doesn’t like it they can pull their listings, otherwise you agree to the T&C of use. It’s that simple. If you are not the one giving them the listings then your issue is really with your broker or franchiser.

      1.  All good points, Patrick.  Coldwell Banker syndicates my listings.  I’m torn because syndicators do some things well and others poorly.  Either way, Coldwell Banker isn’t going to change their practices for me. 

        I don’t think that brokers’ critiques of a company’s practices amount to “complaining” (although some certainly sound a bit petulant in their tone).  The consumer, in my opinion, is not getting a better experience.  They are perceiving a better experience, because they like the site’s features.  They don’t know that they’re seeing an inaccurate database of homes.  This is a big difference. 

        If you asked consumers directly whether they wanted a million dollar website with limited listings or a decent site with all of the listings, casual observers might use the prettier site, but real home buyers and sellers would choose the full listing database.  They’re just not being told right now that they aren’t seeing every home for sale.

        We can disagree on the merits of the system without having to make a business ultimatum.  It’s a discussion, after all.

        1. Agreed. This is the case with Zillow and Trulia but doesn’t apply to Realtor.com. Some might even say that they even have an unfair advantage since they not only get all MLS feeds but are allowed to co-mingle that data. I’d be interested where the best value lies among the three depending on which geography you search.

          1.  …which leads to the question of how Realtor.com isn’t the outright leader with so many advantages?  It’s sad to see how many Realtors dislike the site that was originally supposed to be our public face.  Management at Move has really lost its base support.