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Zillow, Trulia, Redfin And Your Website. Are Search Ads Coming to Every Real Estate Website Near You?

The Wall Street Journal printed an interesting article related to Real Estate Search Marketing: 8/21/07, pg B1, "Investors to Web Start-Ups; Where's the Advertising?"

Rebecca Buckman reported on the trials, tribulations and over all hassles of Glenn Kelman, CEO of Online Discount Broker, Redfin, as he tried (successfully, though frustratingly) to obtain second round funding from Silicon Valley VC's (Venture Capitalists). Redfin had already obtained $8 million from Seattle-area venture firms. (Paul Allen must still be more interested in Sports Teams, than Real Estate and Bill Gates never started selling anything at discount)

It seems Redfin still wants to make money the old fashioned way, "Earning It By Selling Services". Redfin wants to be "The E*Trade of Real Estate", or "The Virtual RE/MAX", not "The Google of Real Estate", like Zillow, Trulia, Yahoo Real Estate, etc.

After a string of VC's kept asking,"Where's the Google-Like Ad Beef?", Glenn could only throw his arms up in despair. Redfin did finally get its second round funding from Draper Fisher Jurvetson among others after meeting with more than 10 VC Firms. (No second round funding amount was quoted.)

VC's are not the only ones not getting the business models of the new online businesses like Zillow, Trulia and Redfin. Just as some Brokers still fear Zillow and Trulia, (who only sell online advertising) will become Brokers, VC's want all start-ups to be JLG: "Just Like Google".

All Zillow and Trulia just want a bigger chunk of our ad budgets. Redfin's the one who wants the whole commission enchilada.

Overture (sold to Yahoo for $1.6 Billion) was the first Internet company to monetize the online traffic/click stream, using only keyword-relevant ads, with no organic results. Courts found Google's keyword-relevant ads surrounding free-search findings was sufficiently different from Overture's business method and didn't violate Overture's patents. Wah-Lah, a whole "new" way to mint online advertising dollars.

In my conversations with VC and Angel investors, they're always looking for a successful example or proof of concept. But it's dangerous to make generalizations with Google as your model. The further you get away from Google's free search results with keyword relevant ads, the further you get away from Google's proven business/revenue model.

Will searchers for Real Estate info, value estimates and/or maps, click on ads at the same rate as those who click on ads around their Google search results? Or will Real Estate content Websites yield the same poor click-through-rates (CTR's) of the Social Networking sites? Zillow isn't giving out all its numbers (Traffic: 3-4 million visitors/month - Yes. CTR - No).

Social Networking Websites get many times the traffic Real Estate sites get. I know of no evidence home buyers will click on ads more frequently than visitors to MySpace, YouTube, Friendster or FaceBook? Will Real Estate sites be Google-Like or Social-Network-Like?

Of course there's always PPV (Pay Per View) or PPM (Pay Per Thousand) Ads, but they aren't as sexy as Google-Like, keyword-relevant Search Ads and they take a sales force or a sales agency, with their salaries and commissions.

If you wanna be the next "Google of Anything", you've gotta have the Ads-Driven Model.

Do you have ads on your Real Estate Website or Blog yet?

Adapt Or Die!  Happy Searching.

WebHomeUSAblog; The Blog of Real Estate Search Marketing

Street Advisor, The Yelp of Real Estate? Zillow, The Google of Real Estate?

On 8/1/07 StreetAdvisor.com launched many new features in their attempt to become "The Yelp of Real Estate". StreetAdvisor.com is the first major social networking venture into Real Estate, offering  user generated realty content down to the street level. StreetAdvisor, based in Melbourne, Austrailia (not Florida), is backed by an undisclosed amount of seed funding.

A somewhat similar idea for presenting neighborhood reviews is offered by Outside.in, which aggregates geo-targeted blog content. Outside.in has funding from 3 Venture Capital firms, including Union Square Ventures, Milestone Venture Partners and Village Ventures.

All the commotion revolves around the potential solutions to the problem of Local Search:

• Local Product Search
• Local Service Search
• Local Ad Need for Local Advertisers to most effectively target their advertising.

If Google could deliver Local Search Ads like they deliver national and global search ads, there's another Holy Grail out there.

It's interesting to look at the business/revenue models for these start-ups. There are a number of ways a Website can generate income:

• Sell Keyword-Relevant Ads, like Google Ads, through an intermediate like a Google AdSense Account.
• Sell Banner Ads and Sponsorships yourself or through an agency.
• Affiliate Programs,ie: Amazon.com
• Subscriptions: Angie's List, Realtor.com

Google proved the Keyword Relevant Ad Strategy can be very profitable for general search, but the jury is still out for profitability with the Real Estate search engines, like Zillow, Trulia and the other Real Estate verticals. Will one of them ever become "The Google of Real Estate"?

Yelp's strategy is to offer free local service/business evaluations. These evaluations drive traffic, but unlike Google which monetizes the click stream with keyword relevant auction ads, Yelp tries to sell monthly ad and sponsorship packages to the businesses mentioned in the reviews. (Yelp has $16 million in funding from Bessemer Ventures and Benchmark Capital.)

If Street Advisor models itself on Yelp, they'll need a big expensive sales force too. Google can't yet supply the most appropriate local ads to make local sites effective with the Google Model.

Two ways to advertise on StreetAdvisor are: "Premium" Billboards, or banner-like sponsorships, which appear on all street pages in a city. There will also be "Base" sponsorships, 2 available per city, which are compared to Google AdSense.

• Will StreetAdvisor become "The Yelp of Real Estate"?
• Will Yahoo or Zillow become "The Google of Real Estate"?
• Or will they all become "The YouTube of Google"?

The problems of Local Search still remain. But the solutions to Local Search may well lie in the right combination of:

• General Search
• Vertical Search/Real Estate Search and
• Social Networking.

It remains to be seen whether even Google, can become "The Google of Real Estate" or "The Google of Local Search"?

Adapt Or Die!  Happy Searching.

WebHomeUSAblog; The Blog of Real Estate Search Marketing