It’s convention season. Many of your are making the rounds at this year’s real estate franchise trade shows. Just like you I’ve been to a few already. I’ve been talking to a lot of other vendors and executives at major franchisors and have begun to better understand some of the issues facing them. I hit on this a little of this on my post “Inside Trulia’s Boiler Room”. I can break it down in to 2 different bits:
SEO is a BFD.
Due to the complexities, various display rules, MLS policies and procedures most modern day real estate franchisors contract with a vendor to handle their IDX services. But a few MLS providers still have rules that require a certain URL structure. To pass the MLS “smell test”, you must have the broker’s name, such as:
www.abcrealty.bigdaddyfranchisor.com
Well this totally sucks for SEO and long tail search. I won’t go in to details but by adding a sub-domain you really hurt the ability for the franchisor to grab any real SEO juice. And I have to say many MLS provider recognize this and do allow national franchisor sites some leeway, and some do not (I’m looking at you H.A.R.)
After a push last year from Realogy, NAR’s MLS policy committee changed its policy to allow national franchisors the ability to index IDX listings on their national home pages. This is a HUGE step in the right direction. But that brings me to my second point, because they added a certain restriction: No advertising around these listings.
Fighting with one hand tied behind their back.
When you break down Zillow and Trulia’s business model it comes down to two factors:
Great SEO drives traffic. Traffic equals more dollars from advertising.
Sound familiar? These two things are exactly the same things that many MLS providers and NAR are restricting. WTF?
The recent restriction by NAR’s MLS Policy Committee to not allow advertising surrounding the indexed IDX listings seems a bit expansive. Most franchisors and their vendors know there a smart ways of implementing advertising around these listings. These methods don’t effect the integrity of the site but do provide much needed revenue.
I think competition is a great thing. But let’s have a fair fight. MLS providers and NAR need to give real estate franchisors a fighting chance.
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Two extra comments –
1. Other Broker Organizations like The Realty Alliance (65 largest brokers representing 100,000 agents) and Leading RE (600 of the largest non-franchised brokerages) are allowed to use IDX data for display on their websites like Franchisors.
I am no lawyer, but I understand the term Anti-Competitive. This NAR Policy, if adopted by MLSs as recommended, would clearly provide competitive liberties that allow Franchise Broker Organizations to compete online in a way that Non-Franchise Broker Organizations may not.
2. Advertising – There are MLS consumer websites bringing in 5 figure incomes per month in advertising. And as you point out – third party websites are pulling in millions. But aside from the monetary component – there are many studies that indicate that consumers Trust sites with advertising more than sites without advertising. This trust increases lead conversion.
RE/MAX (Franchise brand with most traffic) gets 10.8 million page views a week! Lets do some pencil forecasting. One leaderboard at the top of the page $1 CPM, and a leaderboard at the bottom of the page $1 CPM = $2 CPM x 10,800 = $22,600 per week, a little over $1 Million a year. Weichert gets 9 million page views a week. John L Scott get over 3 Million page views.
By many accounts – agent and broker websites would be cash flow positive if they were allowed to have advertising and brokers would be able to monitize their listings as an asset.
By the way – WAV Group published a paper on this topic.
I wanted to make one point on this. Yes, Trulia and Zillow make a lot of money from advertising. But they have dedicated sales people chasing down ad money from Home Depot, Sears, Century 21, Bank of America, Ditech, etc.
Should franchisors get into the ad sales business? I don’t think so. Should they put google adsense on their sites to make a little bit of money? Sure. But is doing so going to revolutionize their business? I’m skeptical.
Are Realtors Stupid?
by Houston real estate broker Tim Ziffle
It’s fascinating to watch how Realtors allow their National (NAR) and local Realtor association’s actions undermine their profession. Amazingly, Realtors pay horrendously high fees to their Associations for access to the MLS (Multiple Listing Service), which the public gets for FREE?
NAR and various local Realtor Associations continue to marginalize their membership by allowing and encouraging data mining parasites (Zillow, Trulia, Homegain, ect.) access to the MLS data that’s created on the backs of Realtors, and have led their membership to believe that somehow someway that there is a benefit to having some sort of relationship with these entities?
Real Estate agents create the data, the data mining parasite’s market it and try to develop leads to sell back to the very people that created the data? Who allowed this business model to happen? It appears realtors are too naive to know when they’re being exploited? And, what do Realtors and their associations do about any of this? Nothing.
No one seems willing to question the relationships between these outside third parties and their Realtor Associations. Why are we feeding these large online data mining corporations our data? American Airlines and Southwest Airlines just told their data mining parasite to take a hike! Anybody listening?
Now these Associations have finally agreed to aggregate all local MLS systems into a National MLS. The Third Party Data Mining companies are salivating. It can’t happen soon enough. The public can now know more about every market in the US than the vast majority of local Realtors could ever know. Like Cramer on Seinfeld says, “they know nothing!” Why are the Realtor Associations out of synch with it’s membership’s best interest? If Realtors are so stupid, why would anyone use one?
WANT PROOF OF REALTOR STUPIDY?
What other industry’s trade Association do you know, that would…
Charge its members thousands of dollars each year to be a member of both the local, state and national Associations and then, require its individual members to spend huge amounts of time, money, gas, effort, collecting /photographing and inputting tons of information into the members collective Association database , then tells its members that it will now give all their information to their competitors for an UNSHARED FEE ,and ultimately, to the public for free?
Does anyone remember what real estate was like when we controlled our MLS data? Why has it been decided that placing these third parties between the Realtors that create the data, and prospective buyers and sellers a good thing? Anyone that remembers when we ran our own MLS systems will grasp the significance of this.
NAR is now advising its members that their Association NOW intends to combine all their individual member’s information into a giant national database, and give that away for free to the public – so there is no need for the public to continue to believe that there are valid reasons why they should hire the Association’s members for their individual knowledge, expertise and counsel. NAR then has the audacity to tell its Association members that their LIFE-LONG CAREER ASSOCIATION EXECUTIVES are looking out for the individual member’s best interest, and to make sure that all the future information they collect and input into the database must be correct and timely , or they will be fined by their association?
The individual association members continue to actually believe whatever their Associations tells them, and continue to send in their thousands of dollars each year to their Associations, in order to ensure the continuation of their MINDLESS REALTOR ASSOCIATION CULT! WHY?(Many members even proudly wear a REALTOR pin to demonstrate their individual stupidity, and official cult membership status!) Are Realtors Stupid? Tim Ziffle is a Real Estate Broker in Texas
For a long time the real estate search portals (REALTOR.com, Trulia, Zillow, etc.) were the only ones capitalizing on the national advertising dollars. Empowered by the brokers and MLS’s who were willingly sending them their listings, the portals sold national advertising around the data provided by the agents and brokers. The portals also sold/sell products to agents and brokers allowing someone to effectively buy advertising around listings they have nothing to do with. Although it’s been condoned, this practice has always been controversial and not necessarily appreciated by the industry.
Franchisors (or other real website operators) don’t have to hire advertising sales organizations to take advantage of the national advertising dollars. Nor is Google Ad Sense their only option as it relates to capitalizing on their traffic for additional revenue. Vertically focused media organizations like the Real Estate and Living Media network (REALM) help agents, brokers, franchisors and MLS sites take advantage of their traffic to target in-market real estate consumers in a way that the Portals can’t. There’s a tremendous opportunity here and YES, it can be quite revolutionary and could put these sites on par with the national portals for advertising sales opportunities.
Limiting the ability of franchisors to leverage their traffic and data to sell advertising is absolutely anti-competitive. In a difficult economic climate franchisors need to take advantage of all the opportunities they are afforded and finding non-transactional revenue sources are critical. If this rule change is allowed to take effect it will eliminate a significant business opportunity for the franchisors (and the rest of the industry) that for too long has been controlled by the portals.
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