Brad Bloomberg of Smarter Agent is a fighter, and I like that. He takes a position and battles from his corner of the ring. Today, he released a blog post on their company website goes nose to nose with Zillow, Trulia and REALTOR.com. Given that his company is suing them all for patent infringement (another story) – they will never be friends anyway. But this new war is one about his view of listing syndication.
Post Title :
The money quote:
……(syndication) “devalues the business of.. a broker-owner.”
I started to write an absurdly long response to the post – and thought it better to put them all here. These are my thoughts on syndication strategy today. They change all the time based upon the broker client we are advising – but this is the gut check response.
Syndication is a topic I think about every day, and the more I think about it, the more conflicted I become. Here are a couple of syndication strategies that I believe will emerge in 2012.
Trend: The Mega Brokers will try to stop syndication – some will succeed, others will fold to the pressure.
If a broker blows away everyone online like Edina or Shorewest – and others like many of the other Home Services firms, some of the big Real Living brokerages, independents like Howard Hanna, – syndication only puts gas in a competitors’ car. A narrow group of companies fit this profile, so this is not likely to be a high impact trend in terms of broker numbers, but it will have a major impact on active listing counts.
Pulling from syndication is a strategic opportunity that is only available to the mega brokers. This strategy is very hard. The broker’s customer is the consumer and the agent – and those customers want syndication. Brokers must provide good evidence that business is better without syndication. If the broker site is not bigger than the syndication sites in terms of consumer traffic, this is a hard argument to make. (By the way – before syndication, only Realtor.com and Franchise sites had more traffic than broker websites.)
We have clients that spend $1M+ per site per year for featured listings. It is a big check – but the measured ROI is there. We have not seen a single broker who has not had a positive ROI on enhancing listings if done correctly.
Depending on the broker’s strategy, brokers that enhance listings with Trulia, Zillow, Homes.com, Homefinder, and REALTOR.com are all doing very well. If you do not enhance – it is ridiculous to bother with syndication – giving your data away is not worth the anemic response rates of “free listings.”
Trend – Brokers will PICK A HORSE or TWO.
At the cost of $1 per listing per month, the broker cannot buy all the horses on the track. They may be able to pick 1 or 2, but 3, 4, or 5 is not financially possible. If you pick a horse or two, I think that it is important for the horse to win. A big broker who consolidates their online marketing budget and syndication with one or two partners, they must to pull listings from their partner’s competitor. So if you pick site A, your success will increase if the other sites do not display your listings (By the way, this is not a possible strategy if the Franchisor is syndicating your listings – which frustrates some brokers).
This strategy works well for big brokers with 20% market share who manage their syndication. If you pull down 20% of the listings from a site – consumers figure it out quickly. We have watched third party websites drop significantly in traffic as a result of tests we have done.
Consumers learn quickly when they cannot get information about a listing they know to be active in a neighborhood – and they migrate to the site with the best data. With all due respect to my friend Saul Klein – I do not agree that distribution trumps destination. I believe that brokers should pick a few sites, concentrate their efforts, and hope like hell that they choose the right partner (pay attention – things change fast). LakeHomes.com will not be a big lead generator for brokerages in West Virginia – so why send the data there? (West Virginia does not have any natural lakes). To be clear – both Listhub, Point2, and Real Estate Digital’s reDataVault all do an excellent job of listing syndication and are all great companies. My point here is that the behavior of hitting the “select all” button and sending your listings to every syndication channel is irresponsible. Stop That!
Trend – Small brokers must syndicate and should advertise too.
I am beginning to think that small brokers will die if they do not syndicate. I even wonder if it makes sense for them to have anything more than a template broker website. If a broker with 10 -50 listings stops syndicating – who cares (unless it is a niche like Chase International in Lake Tahoe). For them, lead generation is all about the reputation of the company, their agents, and the yard sign. Their site is unlikely to rank in the top 20 websites in their area for share of voice. Online marketing is all about volume. If you are out of the top 10, you have failed. Your website becomes a client servicing tool – not a lead generation tool.
Trend – Brokers will control more advertising.
Agents will understand that their broker’s buying power is stronger than theirs. The minimum agent program price on one third party site that I looked at was $39 for 10 featured listings. Contrast that with broker pricing of $1 per listing per month ($10 for 10 listings). Agents should be very selective when buying directly (see sidebar below).
Sidebar: If a broker only sends data to a site or two, and enhances listings there – a path is created to solid lead generation for the company; creates a great recruiting tool; and, makes a great listing tool. By not syndicating to more than a couple of sites, the strategy also gives the agent an ability to do some differentiation marketing. For example: If a broker enhances at REALTOR.com and Zillow, and not to Trulia – the agents working for that brokerage can differentiate themselves by buying Trulia Pro for $39 per month without the broker competing with them. That makes sense to me.
Footnote: If you are a broker in Houston where HAR.com has 50% of all consumer traffic – you definitely do not need to syndicate. See the “putting gas in the competitors’ car argument above.
About WAV Group: If your brokerage is re-thinking its online marketing plan and strategy – Give us a call. We would love to help.
disclaimer – nearly every company mentioned in this post is either a current or past WAV Group or RE Technology client.
Other articles on the topic of Listing Syndication – click here for the list.