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Zillow Ad Network- Good, Bad or Ugly?

zillow ad network


Ten Points of View:

Good, Bad, or Ugly?

None of those. It’s predictable. We’ve always known Zillow to be a media company and there is no surprise in this at all- they have great traffic and space to sell like most the other major blogs and websites. Also, they tipped everyone off last fall when they announced they were partnering with newspapers. This has never been a secret- anyone who thought using penny ads to recoup Barton’s millions wasn’t looking at the big picture. They’re a media company that is using real estate listings as a means to generate revenue.

Yes, ads can be distracting for people coming to the site for home valuations, but is it really any different than Realtor.com’s sidebar (featuring ads), Homes.com (featuring Verizon and Vonage) or Trulia (currently displaying FHA.gov and ZIP Realty in ad spaces) OR the trillions of  widgets on Realtors’ blog sidebars? Zillow’s business plan to make money isn’t new or news, it’s expected.

There are far worse things these media companies (Zillow, Trulia, et al.) have, are and will do in the future… any guesses as to what those things are?

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Benn Rosales is the Founder and CEO of The American Genius (AG), national news network. Before AG, he founded one of the first digital media strategy firms in the nation has received the Statesman Texas Social Media Award and is an Inman Innovator Award winner. He has consulted for numerous startups (both early- and late-stage), and is well known for organizing the digital community through popular offline events. He does not venture into the spotlight often, rather he believes his biggest accomplishments are the talent he recruits and develops, so he gives all credit to those he's empowered.

28 Comments

28 Comments

  1. Joseph Ferrara.sellsius

    September 8, 2008 at 9:32 pm

    Trulia will sell to the highest bidder and the folks with the stock options will throw a party. Pete will start another online company (after a long vacation) and Sami will take his millions and run. (he’s a marathoner). Maybe Yahoo will buy them.

    Actually, in my crystal ball I see them giving agents the option to allow ads on their listing pages for a rev share a la Google Adsense or TextLink ads. You heard it here.

  2. louis cammarosano

    September 8, 2008 at 10:15 pm

    Benn
    Nothing shocking about using realtor content to sell ads
    I think homegain is the only company that does not do it
    We feature the real estate professional in an ad free environment In all our products
    For us the model is to connect our visitors with our real estate customers not third party advertisers

  3. David G from Zillow.com

    September 8, 2008 at 10:22 pm

    Hey, let’s guess about the better things! 😉

  4. louis cammarosano

    September 8, 2008 at 10:26 pm

    joe
    The amount of moneyba realtor can make selling ads is minimal
    We’ve looked at dpomg that and our agents tell us the ads would clearly be a distraction
    Homegain agents are interested in selling homes not ads
    Indeed in the past couple of years we have helped them sell more than ten thousand homes
    As such, we will cede the ad market to our competitors

  5. Mark Eckenrode | HomeStomper

    September 9, 2008 at 1:07 am

    not to steer the discussion too far off course but there are plenty of folks who make a killing through adsense and other affiliate ad placements. if a company offered revenue sharing for listing homes, you’d better believe folks other than agents will be displaying those ads.

  6. Louis Cammarosano

    September 9, 2008 at 8:00 am

    Mark
    Selling ads of course can be a viable business model.

    What I find interesting is that the monetization of a listing should, however, be primarily to gain the attention of buyers. If there are ads around the listings it has to detract the focus.

    An Agent’s choice of selling a home and collection a commission or collecting a few cents for a display ad is not a hard one to make. One could view it as not an either/or proposition and look upon ads as another revenue stream.

    I take the view that the ads cut in to the agent’s ability to sell homes and provide a little monetary relief.

    For Zillow however, the ADS are indeed the show. They need the agents content to attract visitors so they can sell ads.

    HomeGain tried selling ads around our instant homevaluation tool back when we first launched it in 1999.

    We received millions of visitors but in 2000 we took down our original instant homevaluation tool because (among other reasons) it was not making money.

    Granted Zillow has stuck with the concept longer and has added listings, dueling digs,mortgage market place, real estate information and q/a.

  7. Pete Flint from Trulia.com

    September 9, 2008 at 9:00 am

    Hey Joe,
    No plans to sell Trulia, we’re in this for the long haul…and having a blast.
    But I’m sure we’ll throw many a party along the way!

    Benn,
    If you didn’t know, Trulia launched the first real estate ad network earlier this year. The press release is here: https://info.trulia.com/index.php?s=43&item=39 and we’ve expanded this initiative considerably since then.

  8. Joseph Ferrara.sellsius

    September 9, 2008 at 11:36 am

    Hey Pete

    Sure. I didn’t plan to sell my Corvette until someone offered me a big check 🙂

    The long haul on the web comes out to be a few years. And you guys are VC funded. Ah, call me naive but don’t those VC dudes expect a big return on their investment?

  9. Pete Flint from Trulia.com

    September 9, 2008 at 11:42 am

    Joe,
    Yep, you’re right, we have a very big vision and lucky to have investors who are in this for the long term.

    Pete

  10. Joseph Ferrara.sellsius

    September 9, 2008 at 11:55 am

    Good luck, Pete. BTW, any plans to disclose your local MLS coverage to consumers, now that the cat is out of the bag? It would be a benefit to the public to know how good (or bad) your local coverage is, no?

    https://www.techcrunch.com/2008/08/22/how-accurate-are-listings-on-real-estate-sites/

    So, there’s another prediction, Benn: national sites like Zillow and trulia will have to disclose their local MLS coverage.

  11. Pete Flint from Trulia.com

    September 9, 2008 at 12:19 pm

    I’m not completely opposed to it, but we have many more things that are higher priority for us (like filling in the listing gaps) and I’m not sure that it would be that useful.

    At least Jay seems to think not.
    https://www.techcrunch.com/2008/08/22/how-accurate-are-listings-on-real-estate-sites/comment-page-2/#comment-2444886

    Now back to building more tools.

  12. Bob

    September 9, 2008 at 12:34 pm

    Pete cant go there Joe because they know full well how incomplete, inaccurate and mis-leading their data is, at least in San Diego. Mixing in Reatly Trac pre-foreclosure data for properties that are NOT listed or offered for sale so that it looks like they have more listing inventory than they really do goes way past disingenuous.

  13. Joseph Ferrara.sellsius

    September 9, 2008 at 1:00 pm

    I didn’t expect Pete to answer (heck, he may not know trulia’s local mls coverage) but how about the ever forthcoming, and transparent, David G?

    David, do you think the consumer would be served to know the extent of local MLS coverage by the national sites?

    Another prediction: Roost, if it plays its MLS cards right, will join the ranks of TruZilla. But Roost has to get their PR and marketing ducks in a row. Try buying some remnant cable ads Alex & get a gecko (or a rooster– I hear Foghorn Leghorn needs some work).

  14. Louis Cammarosano

    September 9, 2008 at 1:00 pm

    Bob

    I am not sure it is a correct characterization to say that Trulia’s data is misleading.

    It may be not “complete” depending on the definition of complete.

    Consumers want to see listings. I believe most of Trulia’s listings are broker feeds which may not contain all the MLS data and they may not have broker feeds in all the areas that they serve.

    However, they do provide a fair amount of listings presented in an attractive fashion.

    The MLS itself is also not complete as it does not contain FSBO, new homes, foreclosures etc.
    Trulia doesn’t say “we have all the listings”. They display what they have. If the consumer finds their site lacking they can visit other sites to round out their searches.

  15. Louis Cammarosano

    September 9, 2008 at 1:04 pm

    Joe
    Here is how homegain does listings.

    Through our buyerlink program we send visitors to our site directly to agents who have the right to display the MLS in their areas through IDX.

    In this manner the HomeGain visitor gets the “complete” MLS from our agent customers.

    We have thousands of agents on this program and they cover a good portion of the country.

  16. Bob

    September 9, 2008 at 1:33 pm

    One example of the commingled Realtytrac data has this comment on a property in San Diego:

    This property is a Notice of Default. This is the initial document filed by an attorney or trustee on behalf of the foreclosing lender that starts the foreclosure process.

    This specific property is Not listed for sale and the seller is not interested in selling. It’s sole purpose is to sell a RealtyTrac subscription.

    Louis, how is including properties that are Not for sale in a list of properties offered for sale, not mis-leading?

  17. Benn Rosales

    September 9, 2008 at 1:33 pm

    Hi Pete, great to see you…

    This post says two things – ad revenue is to be expected and agents should not really fear this play. You’re here to make money, just like everyone else.

    The other thing I’m addressing is exactly that long term vision- it’s what’s most feared by the agent.

    Why would an agent worry? Here’s an example:
    Last week a post was pulled from the forum at trulia asking the question “do agents deserve 3%” and placed in a blog post on Trulia blog. In the forum being asked by a consumer was not an issue, what made it an issue is that it was republished in a corporate forum right beside the agents you’re promoting and where agents promote themselves. How it is playing in the underlying conversation online is that a major wedge company has turned against the very agents that make up its company (yes, this conversation is really happening whether it’s actually true or not).

    A fact many may not know is that the question was also broadcast to our linkedin, Twitter, and probably by default posted to all of our facebooks- our personal market spaces, in front of many of our clients, not a bad conversation to have, but it does have implications.

    We can say all day to let wedge companies make money, they never hid this fact, but a problem is now presented that calls into question whether the wedge company is a friend or foe to average Joe or how about average Benn?

    The number one pile a wedge company can step in is one where it appears that said wedge company has a problem with how everyone else makes money.

  18. Pete Flint from Trulia.com

    September 9, 2008 at 1:48 pm

    Bob,
    Good points, we’re working on improving the user experience here.

    Hi Benn,
    Great to hear your perspective!
    We posted that question as it was one of the most popular at the time and an interesting discussion. We promote the most popular discussions that people read and contribute on to our corporate blog, it’s that simple. If there were a digg for real estate, that topic would be on the home page all the time.
    I think you know us well enough by now that Trulia is about as agent and industry friendly as they come. There are so many other companies out there that actively work to undermine the role of a agents and lower their commissions, you wont find that here at Trulia. It’s just not in our DNA, never has been. Hope that clarifies things.
    Cheerio
    Pete

  19. Louis Cammarosano

    September 9, 2008 at 1:51 pm

    @Bob
    I would think that it may be a poor consumer experience to display Realty Trac data. However, most of Trulia’s data is not Realty Trac data.

    If all Trulia did was aggregate realty trac listings they would not be drawing large numbers of visitors to their site.

    @Benn “ad revenue is to be expected and agents should not really fear this play. You’re here to make money, just like everyone else.”

    I am not sure that it is as simple as that. While ad revenue is to be expected, real estate agents have to determine whether they get a fair exchange for providing their listintgs to listings sites.

    If the ads take on greater prominence to the point of distraction (or worse competition) of the listings, agents may find its not worth sending their listings to certain sites.

    Often I see on listing sites ads by homebuilders, mortgage companies and real estate brokerages. In this example, the agent, may send listings that attract visitors to the listing site and then the listing site diverts its visitors to a competing agent or broker who has purchased a large banner ad on the site.

  20. Benn Rosales

    September 9, 2008 at 2:07 pm

    hi Louis,

    Bottom line: I will work with the company that drives the most traffic to my home listing, and if that company somehow devalues their space and lacks in this department, then I as the market will adjust my levels of cooperation until something improves.

    If a consumer clicks off of a listing because of a shinny ad, then that consumer probably wasn’t really there to see that home, nor buy a home. Seperation of the buyer from the bored guy at work is totally fine with me.

    I get what you’re saying, I always have, but just as you dumped your avm, I am positive you’ll see the same of something that disrupts balance.

    As for placing a competitor ad on my listing? So be it, we’ve got a percentage factored for them too 🙂 Its all a wash, and if it doesn’t wash (crazy notion here) the market will sort them out.

  21. Bob

    September 9, 2008 at 2:14 pm

    Pete & Louis – I wasn’t questioning the user experience on Trulia as much as I was questioning the integrity of the presentation and the intent behind doing this.

    I don’t see this as any different than when search engines were called out for commingled paid results with organic results in order to increase click thru rates on the paid listings.

    Goolge makes a boatload of cash by piggybacking an advertising model on search – basically the same thing Trulia and Zillow are trying to do. I am just disappointed that Trulia feels the need to trick people.

    Round 1 goes to Zillow.

  22. Louis Cammarosano

    September 9, 2008 at 2:39 pm

    Hi Benn

    Thanks for the response. I guess you can take the view, you get what you pay for when you have your listings posted for free 🙂

    I agree that if the consumer doesn’t find your listing attractive then they probably are not interested in buying a home. I made a similar point on Mariana’s Blog your Listings post.

    I would guess that an agent wouldn’t have a problem if the consumer clicked off to a WeightWatchers ad that surrounded their listings. That MIGHT be an indication that they were more concernded about their waistline than buying a home.

    However would an agent be happy if the consumer clicked off to a competing brokerage ad
    next to their listing. That consumer probably is interested in buying a house and the agents listings were used as bait.

    Perhaps in the listing agreement, larger brokers can negotiate a prohibition of the types of
    ads that can’t be displayed with and around their listings.

    The individual agent doesn’t have the bargaining power to do so, and as such the only thing they can do is not send their listings to a site that promotes their competitors around their listings.

    This may be a case of biting off your nose to spite your face.

  23. Louis Cammarosano

    September 9, 2008 at 2:43 pm

    Bob
    I don’t need to be overly charatible to one of our competitors, but I still contend that Trulia is not misleading any one, but rather at worst providing a less than optimal consumer experience by displaying non mls data when they don’t have any MLS data to display.

    I am Flynt and co are well aware of the consumer experience and are working hard to get more listings to fill the gaps.

  24. Bob

    September 9, 2008 at 3:25 pm

    I can’t believe you think it doesnt matter whether or not the the property is actually for sale.

  25. Jay Thompson

    September 9, 2008 at 6:03 pm

    Wow, a comment I left on Techcrunch gets cited by the CEO of Trulia.

    I dunno why, but I think that’s kinda cool. 😉

    And I stick by what I said there. The MLS is **loaded** with crap. Just today one of our agents found a $125M listing. In Chandler, AZ. That may not mean much to a lot of people, but Chandler, or the entire Phoenix metro area for that matter, simply doesn’t have anything close to $125M homes. It was a stupid data entry error. The MLS is full of them (as well as out-and-out deceit).

    Advertisements on Zillow? Like you said, no shock there. Do I care? Not really. Should I? I don’t know. Heck, I have ads on my blog. An inch below this comment window I’m typing in are two Google ads (interestingly, one says “Zillo House Prices” — and no, it has nothing to do with the real Zillow).

    Personally, I still think the best home search is on a local agent/broker’s IDX feed, national sites be damned, and flawed as the data may be at times. Apparently enough people think that too that I stay busy. Could that change? Of course. Will it change? I don’t know. There are plans formulating just in case….

  26. Benn Rosales

    September 9, 2008 at 6:36 pm

    Pete,

    I’ve followed Trulia since the site went live, I know Rudy personally and have spent many hours on the phone with Heather. You’re right- it is your DNA to promote agents which is why this particular instance stood out. This is how the events were perceived by myself and others, but I trust your word when you clairifed the situation, and so should our readers.

    I think going forward what must happen by all of the media companies is their creation of more opportunities for agents to shine and demonstrate exactly why they are valuable to home buyers and sellers (with the amount of work and energy that goes into getting a home to market and the work after it’s there). I think Trulia and others are in a position to further the value of the agent and I anticipate that Trulia will continue to do tons in that regard and THOSE are the kinds of things we want to write about here.

    As time marches on, agents will learn to maximize the opportunities these platforms present to reach a broader audience, and we hope to help.

  27. joseph ferrara.sellsius

    September 11, 2008 at 10:01 am

    Jay makes a good point on MLS GIGO (“crap”).

    To me, that makes it even more important for buyers to know the local MLS coverage of a site like Zillow or trulia. So, if their local coverage is 100 of the 200 MLS listed homes (say on Roost) and 25% of the MLS is crap, then truZilla has a net 75 good MLS listings to Roost’s 150. Big difference. And that’s no crap.

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