We meet with a lot of entrepreneurs in our 1000watt offices. Connecting with startups is one of my favorite things to do.
Often during these meetings, as the conversation shifts from product to business strategy, I steel myself for the one slide in the pitch deck that I know is coming… the Borrell Slide.
You know what I’m talking about. It’s the slide that pegs the total ad and marketing spend by real estate professionals at around $10 billion a year, a figure produced by research firm Borrell Associates.
“If we get just X percent of that number…” is how it’s framed. This is usually the point at which I tune out.
Here’s the reason why:
I don’t think any significant amount of advertising money is going to go to real estate media companies in the future.
I’m convinced most of it is going to go to Facebook.
Zillow may be the 800-pound gorilla in the real estate advertising space right now, but Facebook is the elephant in the room. They’re the company that never really gets mentioned in the same breath as Zillow or Realtor.com.
But Facebook is where the smart agents and brokers are spending their money right now. And it’s where I believe the lion’s share of that $10 billion will be spent in the future.
So of course, it’s where some smart startups are starting to focus their attention, too.
We just got back from Realogy’s third annual FWD event. Once again, a fresh young crop of startups got a shot at pitching their products to the biggest real estate franchisor in the world.
Two of my favorites from the competition – Flipt and Curaytor – are doing exactly what I outlined above. They saw that big ad spend number and rather than try to take a run at it themselves, decided to build products and services that help slipstream the dollars to where they are heading anyway.
As a result, they’re doing an end run around intermediaries like Zillow.
The case they’re making to agents and brokers?
Why would you ever want to buy leads from a real estate media site when you can fish further upstream in more productive waters?
What good is a phone number or email address culled off a property search when you can target your message or take your product (i.e., listings) directly to the world’s largest database of potential customers?
Add the ability to segment your advertising by geography, income range, age bracket, interest, housing status and dozens of other personal attributes and you’ve got a channel of unprecedented power.
The case Flipt and Curaytor make is illuminating and strong. The results these companies can point to are compelling.
A future where productive listing agents and their brokers demand a “my listing, my lead” position on portals while simultaneously farming Facebook for new buyers and sellers seems more than possible.
So if I were a media company whose revenue depended on selling ads on property listings right now, I’d be feeling the heat not just from the brokers and agents questioning my place in the real estate ecosystem – but from Zuck too.
[Disclosure: Realogy is a 1000watt client.]