In the US, as in most countries, there is a rocky relationship between property portals such as Zillow and Trulia and their customer base, the brokers and agents. The portals have done a great job at building substantial audiences, often at enormous cost, and are now looking at ways to further monetize their businesses (and thus recoup much of their investment) while the brokers and agents often have a view that they own the listings and that the portals are profiteering on the realtor’s hard work.
In reality it is a symbiotic relationship where agents and brokers get access to massive distribution channels at a fraction of the cost if they were developing these channels themselves. And of course, the portals wouldn’t even have a shot at a business model without access to the listings.
The article is reprinted below with permission.
So a lot has happened over the past couple weeks.
Below I lay out a few things I believe to be true. They are all debatable, of course, and may, in the end, prove to be completely wrong. Be that as it may, my overall approach inclines toward practicality.
There’s a problem between brokers and online publishers, and both parties stand to get hurt if it’s not solved.
So, for your consideration…
1. The manner in which Trulia and Zillow currently handle buyer agents on listing detail pages is unreasonable.
Realtor.com allows brokers to kill the “4-headed monster” on their listings without paying. This is better, but there’s got to be a way to monetize a listing that respects those who provide them while still allowing online publishers to generate revenue.
2. Perhaps a consumer shouldn’t be urged to contact the listing agent. And an airline shouldn’t charge me to check a bag, either. But that’s the way it is. It’s business.
Sure, there are discussions to be had about the future of the brokerage business model. But in the meantime, we have a more immediate matter to address: content owners don’t like how their content is being used. Let’s work on that.
3. Brokers that cease syndicating without a countervailing digital strategy in place will probably get hurt.
We are at an interesting point now with technology, where what we think of as “online” is shape shifting before our eyes. Soon, more people will view listings on smart phones, tablets, e-readers (and whatever voice, gestural or neural interfaces emerge in the not-to-distant future) than on the web pages we’re all focused on now.
The unprepared brokerage, by ceasing syndication, is not just removing its listings from a website. It is vanishing them from a digital world that’s just dawning.
Brokers may not like their digital partners, but these partners have the capacity to take them to places they’ll need to be in the future.
And, sure: If you’re a big broker with significant share, loads of brand equity, low dependence on out-of-market buyers, solid digital assets and a good internal marketing team you probably will not mortally wound your business by ceasing syndication. But these companies are the exception.
4. The costs of cooperation, long-term, are lower than the costs of retrenchment.
Though there are very important differences between IDX and syndication, there’s an underlying reality those who participate in both confront: buyers will approach listings from many places, through many people.
It was nice when sign calls drove most inquiries to the listing agent. But I don’t think we’re getting that back. I also think the power of the listing as a vehicle for agent marketing and brokerage branding never will be what it was pre-digital. These are realities driven by consumer expectations unlikely to be stifled, for long, by industry maneuvers.
So, yes, when brokers cooperate with online publishers through syndication, or with competitors through IDX, some buyers agents will essentially free-ride by using listing inventory to secure clients, some of the agents shepherding buyers through their listing may not be area experts, and they will lose some control over lead routing and monetization.
But having been inside hundreds of brokerages, looking at the numbers, the metrics and the conversion funnel top and down, the costs of cooperation, while real, are usually (yes, there are exceptions) less than the costs of retrenchment.
5. Love the one you’re with. Your next relationship may be even worse.
If syndication is pulled apart like a piece of string cheese, and if IDX unwinds next, Zillow, Trulia and Realtor.com may go away and big brokers will have achieved something that won’t feel like victory for long. Because what replaces them may be even more odious.
Compelling consumer behavior (in this case, “you will come to my website or app to view listings”) is difficult unless your brand, your product and your user experience are all superior. Apple and Southwest Airlines make such demands of consumers, and we tolerate them, because, well, they are Apple and Southwest Airlines.
Most brokers aren’t in a position to pull this off right now. So what will arise, once the beasts of today are slain and consumers cry foul, are marketing and distribution partners that will likely charge much more for access to consumers whose expectations fly beyond the average broker’s reach.
Remember: the rest of the world is pay-to-list. Negotiation now seems smarter than rolling the dice.
And, on the flip side… online publishers may gripe about unreasonable brokers now, but trying to aggregate 4 million listings from agents will make today look like a walk in the park.
6. What we need, quite urgently, is a new online listings compact.
Such a compact must be more respectful of listing owners, yet still allow the online publishers to invest in innovation from which brokers and agents can benefit.
Invective is easy and sometimes gripping; cooperation, while much harder, is still possible.
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