Zillow Group emerged from the fog of FTC review this week, a massive media dreadnought moving at full steam.
It’s big: 2,000 employees, a combined revenue run rate closing in on $800 million a year and an online audience the likes of which we have never seen in this category.
What a thing in our midst!
I don’t think Zillow has ever been truly disruptive – in the sense that it has (or will) change the way real estate agents and brokers work – but the new Zillow Group’s wake is going to rock some boats.
A few observations:
A “Massive enduring brand”
I think the newly-formed Z Group is going to be even more aggressive in going after the hearts and minds of American consumers than plain-old Z was.
This is strategic, yes, but it’s really more of an imperative. As I pointed out last week, there’s a finite number of listings, Realtors, and buyers and sellers, which means, in turn, that there’s only so much stuff Zillow can sell.
To continue growing, the company needs to obliterate the narrow channel through which people currently view “real estate”. Most of us slide into and out of the real estate frame every 5-10 years when we buy or sell, with maybe a couple refis in between. We experience “real estate” episodically even though we live in homes our whole lives.
Spencer Rascoff has often said that he intends to create a “massive, enduring brand.” Zillow Group’s stated mission is to build “The world’s largest, most trusted and vibrant home related marketplace.” They’re not dropping a few postcards, here, folks – we’re looking at a huge campaign to grab more share of consumers in the transaction zone and to keep them mindful of the Zillow brand beyond it.
Indeed, the company released its latest TV ad just today. This piece, like the others before it, pries open the lid to our emotions around the idea of home and pours the Zillow brand right into them.
It’s powerful stuff. Expect much more of it.
Welcome to the jungle
We all knew things would get serious when News Corp. got into the game, but the birth of Zillow Group just set the stage for a prolonged media cage match.
It took exactly one day for News Corp. to cut Trulia off at the knees by announcing it would shut off the flow of listings from ListHub… next week. This is aggressive stuff.
But beneath the power moves, there lies a deeper chaos.
- ListHub, the biggest pipe through which listings flowed from brokers and MLSs out to the wide-open Internet, has just been obliterated.
- Zillow Group now needs to hustle to gather all of those listings into thousands of smaller pipes called direct feeds, and MLSs and brokers that want to syndicate – particularly the small ones – are scrambling too.
- Some of these feeds are opt-in, and some are opt-out; some listings will flow through the pipes and some will not.
- At the same time that Zillow Group, MLSs and some brokers are trying to reconnect the listings plumbing, others are planning to blow it up again. Both Project Upstream and the Broker Public Portal are about rearranging the power dynamics of listings distribution.
In other words, things are a bit of a mess right now. I believe this to be a good thing, but it’s an environment in which people feel uncertain, the stakes are high, and the bold are rewarded.
So what’s to come of all this? What will happen now that two massive media conglomerates are playing in our industry?
Despite the Zillow Group’s branding moonshoot and the prevailing chaos in the listings world, I think the answer is this:
I may eat my words, and I used to have a different view on this, but there’s a point at which all the apps, all the websites, all the software and all the competitive head-butting cease to matter. It’s the point at which this stuff ends and the real estate professional begins. And that point, in my opinion, isn’t going to move much further.
You can build me a GPS-based, augmented reality, smell-o-vision-enabled lifestyle home search app powered by “big data”, but I will still put the thing down and go out and see some homes when I’m serious. And I’ll go with an agent.
So, yeah: things are going to be interesting for the next few years. But keep it in perspective.
Enjoy the weekend.