In Australia and the US, Google has added properties for sale to its mapping site – maps.google.com. Users of Google Maps are now able to see a selection of homes for sale and rent plotted on the maps. These homes for sale seem to be sourced from Google Base – Google’s classifieds engine. It is free for anyone to upload a listing and this can be done through an online interface or through an XML data feed.
The inclusion of property listings from Google Base onto Google Maps has some parts of the Australia real estate world abuzz with thoughts of the end of market leaders’ realestate.com.au and domain.com.au.
However, while this launch is new and innovative in the Australian market, a lot has to fall in place before realestate.com.au and domain.com.au are truly affected by the “entry” of Google into the Australian real estate advertising scene.
For the market leaders realestate.com.au and domain.com.au to be truly affected, the following probably needs to happen.
The Challenge of Building a Comprehensive Database of Listings
People visit realestate.com.au, and to a lesser extent domain.com.au, because there is a comprehensive range of listings available for them to search. realestate.com.au probably has around 95% of all Australian listings on their site. People continue to visit because these sites have built, over a long period of time, a reputation of being comprehensive in almost all areas of the country.
Therefore the first hurdle that Google has to jump over is building a comprehensive set of listings in any area that someone is going to search. If they have this, then they may be able to swing a visitor from realestate.com.au or domain.com.au to the new site. Without this, they are dead in the water. To build this, they will have to source the listings.
While secondary sites such as myhome.com.au, reiwa.com.au, and homehound.com.au will eagerly send their listings to Google for inclusion in Google Base, it is doubtful that realestate.com.au or domain.com.au will do so, thereby forcing Google to source listings directly from agents and franchise groups. (Note: ~40% of agents in Australia are part of a franchise group)
The challenge for Google is how to get to the 9,000 real estate offices (brokers) around the country with a simple to use method for them to upload their listings to Google Base. At the moment this approach does not exist and both realestate.com.au and domain.com.au have existing feeds in place to source almost all properties within Australia. Yes, an agent can use the Google Base interface to upload individual listings, however agents are notoriously reluctant to manually upload listings more than once.
Therefore it will be reliant on the raft of intermediaries to put links in place to Google Base. Interestingly, two of the largest, My Desk Top and HubOnline, are owned by Domain and realestate.com.au respectively.
It will take time for Google to create comprehensive (and equal to realestate.com.au and domain.com.au) list of properties available for sale.
The Challenge of Getting Visitors En Masse to Property Listings on Google
The second challenge is actually getting people to look at the listings on Google. While Google has massive traffic, that traffic visits Google for a number of reasons – only one of which is to find property listings.
At the moment finding the new map based real estate listings is not exactly easy. If you do the normal Google search, you will continue to get the same results as you did before with realestate.com.au and domain.com.au at the top of the search and thus getting the clicks to their sites.
To find the new listings search, you actually have to click on “map” at the top of the page, enter a search term like “properties for sale in Bondi” and then you have to click on “Real Estate on Google Maps” to see the results of your search. This is not exactly user friendly and until they incorporate the map based results into the general search results, it is unlikely that this new approach will impact realestate.com.au or domain.com.au to any significant level.
We expect to see the listings search results incorporated into the general search results at some point in time. The interesting question will be what impact that may have on Google’s PPC revenues – both people wanting to advertise and the click through rates on AdWords.
The Challenge of Getting Users to Permanently Switch from realestate.com.au and domain.com.au
So assuming that they get Australian real estate searchers en masse to the Google property listings, the next challenge is switching them from realestate.com.au and domain.com.au and keeping them on the Google real estate site.
Both realestate.com.au and domain.com.au drive traffic to their sites from a number of sources including the strength of their brand, their large email alert databases (realestate.com.au’s is believed to have over 1 million entries), their ongoing online and offline marketing (with media owners) and their presence on Google (which is unlikely to change). These will be a hard segment for Google to switch.
The second part of switching is providing people with an experience that is better than the alternative. Now assuming that Google can source the same number of listings, the next question is do people prefer mapping over the traditional list approach to search results.
It is often assumed that people like mapping more than any other approach however I suspect that more people look at the listings based results on realestate.com.au and domain.com.au than the map based results. Remember that these two sites have done more to frame the Australian real estate search psyche than any other sites.
If people do like mapping, both realestate.com.au and domain.com.au already offer mapped search results. It is interesting to note that the Google Maps representation of listings is similar to realestate.com.au’s long forgotten beta site, property.com.au.
The most likely impact from this is that realestate.com.au and domain.com.au will analyse the usage of Google Maps for real estate search and incorporate these changes into their sites. Thus making the reason to switch to Google Maps less compelling.
Google will also have to learn from realestate.com.au and domain.com.au about what users want from a real estate search. This includes the ability to set up an email alert.
Will Agents Dump realestate.com.au and domain.com.au for Google (or Other Free Sites)?
The real question is will realestate.com.au and domain.com.au actually lose any advertisers on their sites? The short answer is highly unlikely.
If you are a real estate agent in Australia, you would have to be sure of two things before turning off realestate.com.au or domain – that you are not going to lose any leads and that your competitors are not going to gain more leads by you not being on these sites.
Now if you look at this rationally, a converted lead in Australia is worth somewhere between $8,000 and $12,000 in commission – definitely more in places like Mosman. Now, the standard subscription from realestate.com.au or domain.com.au is likely to set an agent back $4,000 to $6,000 per annum.
Therefore, even if an agent maintains a standard subscription with these sites and achieves just one sale, then they have more than covered the cost of the subscription. Therefore, an agent would have to be slightly crazy to forego a subscription with either of these sites and rely solely on Google (or free sites) for its leads.
Assuming agents are not crazy and they maintain their subscriptions, these sites (realestate.com.au and domain.com.au) maintain the volume of listings and therefore the customer experience that people have become used to.
So What is the Likely Outcome?
The likely outcome is that Google will co-exist with market leaders realestate.com.au and domain.com.au. Some real estate searchers will like the approach Google has taken and will use the site however we don’t believe that this will be to the significant detriment of realestate.com.au’s or domain.com.au’s traffic.
Google will probably struggle to get 100% coverage of the listings in Australia as realestate.com.au and domain.com.au will hold out sending them their listings fearing that they will create a competitor.
Agents are likely to continue to advertise on realestate.com.au and domain.com.au as these will continue to be significant drivers of leads and they will fear missing out on leads that could go to their competitors.
Agents may reduce their spend on premium advertising options however this will most likely be at the margin and will not significantly impact the revenues of realestate.com.au or domain.
And if it does have impact, then realestate.com.au and domain.com.au can always embrace Google and send their listings to Google Base in the hope of swamping the listings on the site. It will be interesting to see how Google handles the same listings from realestate.com.au, domain.com.au, homehound.com.au, myhome.com.au, the agent and the franchise group. Somehow I suspect that there may be some favouritism towards those companies that spend big on pay per click. Now I wonder who they may be.
The last thought is what impact this will have on the tier two sites such as myhome, homehound, and realestateview. They have no choice but to embrace Google as Google is probably their main source of traffic. The problem will be that they may be feeding the beast the will devour them over time as visitors no longer need to go to the site that the listings are sourced from.
As Mark Twain is reported to have said “the reports of my death are greatly exaggerated”.