Zillow launched a new TV spot. It is well done, as you would expect, but that is not what’s interesting from where I sit.
Consider that the company plans to spend tens of millions on advertising in an effort to fill what Spencer Rascoff has called real estate’s “brand whitespace”.
This whitespace is presumably the awareness, goodwill and meaning that Zillow thinks national real estate brands like RE/MAX, Century 21 and Coldwell Banker have left on the table.
In my mind, there are two ways one might look at this from inside the real estate industry.
Other people spending money to promote my listings can never be a bad thing. And if Zillow can lay down a patina of consumer love over the real estate industry, that’s super. The transactions, and the more intimate brand interactions, still come back to me anyway.
And, after all, not a single agent or broker has lost a deal to Zillow. Not once.
So I’m cool with this.
This is a reach into my brand breadbasket that I can’t abide.
I’ve always viewed Zillow as being in the technology and marketing business. But now they’re in the brand business? This doesn’t feel right. If a Realtor couldn’t even get a cameo in the TV ad, then how does Zillow really view the practitioner’s role?
I believe that Zillow and its competitors are a good thing for this industry and, when properly engaged, drive tons of value to agents and brokers. But I see a thin line being walked here.
Zillow could have played this with a little more industry sensitivity. I know the company is worth $2 billion. That 55 million consumers come to its site and apps every month. That they have big brand aspirations.
But the broker and agent are still the customer.
Get more leads from the traffic you already have. Have 1000watt conduct a usability test on your website.
Seattle broker Kevin Lisota published a post a couple of weeks back pointing out that Redfin is explicitly declining to work with buyers looking to buy homes below a certain price point.
In plain language, Redfin is saying “If you’re not buying an expensive enough house, we can’t make enough money off you. So we’re going to refer you out to an agent at another company who’s part of our partner program.”
Who knew Redfin was a luxury brand?
This also ties to a bigger issue: what exactly is a real estate brokerage these days?
Redfin definitely brokers homes. And in some ways, because they salary their agents and tightly manage service delivery, they are more in the real estate business than most.
But on the other hand, a lot of their revenue comes from simply passing on people who interact with the Redfin website and apps to agents who work for other brokers. They charge these agents a referral fee.
So, is Redfin a real estate brokerage? Or a tech company with brokerage licenses that extracts a referral fee from (and adds another layer of complexity to) the transaction?
They are both, of course.
Within this blurring of brokerage identity lies the seeds of disruption.
RealTrends, the respected consulting and research firm, launched an agent network called The Fellowship of Realty Professionals. I like anything that sets a standard in this business, so the fact that they’re limiting membership to truly productive agents and teams is great.
Part of the membership is a listings database where members can “upload pocket listings on a searchable site, marketing properties to the elite sales associates in The Fellowship before the listings are placed in the MLS.”
The Fellowship probably won’t siphon enough listings away from the MLS to make a difference, but it could. And given that the 90/10 rule is operative in real estate, it’s reasonable to think that some sort of private network, someday, could deal a serious blow to MLS cohesion.
It kind of feels like we’re playing a game of Jenga with the MLS at the moment. A block pulled out here, a block pulled out there.
How will it end?
Check out this ad campaign from IBM. It’s so, so smart. And talk about a format made for real estate!
Enjoy the weekend.