Spending Over $60K Per Month on Zillow

by Victor Lund on December 23, 2014

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It is not very hard to find out who Zillow’s top customers are. Just visit the website and look at theAgent Reviews section. One of those top customers is Samer Kuraishi Group from the Washington, D.C. area.

Samer is a second generation real estate agent. The brokerage, A-K Real Estate, Inc. (“A-K”) is a boutique 40 agent firm, located about two blocks from the White House, that was founded by his father. Together, they have grown the company significantly, supporting consumers in Maryland, DC, and Virginia.

Much of the company’s growth has happened over the past few years and was driven by advertising on Zillow. Samer indicated that the company did about $49M in 2012 when they first started buying advertising on Zillow. This year, Samer is expecting to do $27M+ personally and he expects to hit $150 million total in 2014 which is up about 50% from 2013 $101M in sales.

Samer is purchasing Zip Code marketing on Zillow at a rate of about $60k+ per month. That is more than most brokerage firms. For that, Samer is guaranteed around 700,000 consumer impressions per month on Zillow. In truth, Zillow typically over-delivers on the contracted minimum impressions, so his actual impressions are over 1.2 million per month. That is a lot of online advertising. Most of his leads come from his group profile page.

When Zillow markets its advertising impressions, it does so by creating a market value of those impressions by zip code. Some zip codes may be as low as $25 per thousand impressions. On the high side, the cost per 1000 impressions (CPM) can be over $100. Many markets seem to average about $50 CPM, and lots of markets around the nation are sold-out and have a waiting list. Samer even owns zip codes where he does not typically provide services, just to build his portfolio. Today, Samer owns 110 to 115 zip codes on the Zillow site, but he refers some of the generated business to local agents, whom he trusts.

For $60k+ per month, Samer receives a little more than 700 leads per month. Additionally, Samer invests in other portals and has a technology partnership with Virtual Results for his website. He has a full suite of technology solutions that he admittedly built through trial and error. But Samer says that he has everything wired the way he likes it today.

“I have a great relationship with Zillow,” says Samer. “It drives 82% of my business today.” He has a healthy recognition that sometimes a partnership that drives so much of his business comes with some risk. “I know that if I let some of my zip codes go, I will not ever be able to get them back. Zip codes are like Boardwalk and Park Place on my business map,” acknowledged Samer.

If Zillow does not deliver, he will be challenged to find a replacement. He is always testing new things, including programs running on Trulia and Realtor.com. “Those are smaller programs that deliver lead volume, but they are not delivering the same lead quality I get from Zillow,” said Samer.

WAV Group research has shown that lead quality varies by lead source, but also that lead quality varies by geography. Realtor.com, Homes.com, or Trulia.com may have higher lead quality in your area, but be sure to do your own test.

After speaking to Samer, I had an epiphany that helped me understand why Zillow’s stock price is soaring. The product works! Brokers, teams and agents who know how to convert online leads are literally in line to buy zip codes. They are on waiting lists. The price per zip code will continue to rise as long as there is demand. Agents like Samer have figured out how to leverage advertising on Zillow to drive a steady business and buying zip codes is the key to his future expansion.

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