Regarding his statement to GeekWire, he notes that “Obviously that statement accounts for the fact that we had considered ad campaigns, but reflected my view then that advertising wasn’t part of our strategy. I have been opposed for a long time to spending money on advertising rather than customer service. Because of the refund and the cost of our service, our margins are modest, which leaves us very little money to spend on marketing. I may be wrong, but I think this will always be true. I was sincerely sincere when I made the statement.”
Kelman said, “Now when I was talking more recently to ActiveRain, I was mindful of our AdWords experiment, which obviously can’t and shouldn’t be conducted in secret. An advertisement is the opposite of a secret, so there is no intent to deceive. The goal of the experiment isn’t, incidentally, to buy general-purpose traffic but to bring customers directly to a section of the website that immediately introduces them to a Redfin agent. Maybe it will work, maybe it won’t. Right now, it still isn’t cost-effective, but I hope in the future we find a way to make it so.”
If we have to pay for introductions to all or most of our customers, our industry will suffer. Spencer disagrees with that, but that is how I feel. When I spoke to agents on ActiveRain extemporaneously, I tried to emphasize that most or virtually all of our customers would come to us via unpaid channels, but I may have made more extreme statements than I should have – I am actually trying to find a transcript or video — and at some point I’ll write a blog post if that helps to clarify our position. You can call that stupid, but it’s not unethical.”
Kelman said, “if Zillow or Trulia perform better than Google, we will try advertising on those sites too. I don’t harbor a grudge against them; we just don’t have much money to give them. Maybe ads will work this time ‘round, maybe not. I hope they do, or we wouldn’t even try. But that doesn’t change the point we were making on the ActiveRain call, which is this:
Redfin and other brokerages have to generate the overwhelming majority of our business via our own website or our current business models won’t work. It is a threat to all of our businesses that in some cases MLS rules are more restrictive than the data-sharing agreements brokers have with media sites, because it limits brokers’ ability to communicate directly with the customers we want to meet. We as brokers have to think about the future, and we have to own the future.
All brokers, not just Redfin, have to compete aggressively on the web, not by blogging about one another, but by giving consumers the information they want, in a more reliable and responsible way than anyone else can. We can ask for access to the same information that media sites have, and say that we want to prosper as much as we can without paying those sites, and still have no malice toward these sites.
We haven’t flip-flopped on this position.”
