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Halstead, Brand Suicide, and Media Companies

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Over at the Future of Real Estate Marketing blog, Joel Burslem celebrates Halstead’s incorporation of New York magazine’s neighborhood profiles on their website. But then he goes on to make what I think is an outrageous claim:

It also signals to me that more brokers are waking to the reality that they themselves are media publishers and therefore need to start acting like them. Inking content deals for their sites is part of that, but so is exploring trends like syndication and distribution for their own content (i.e. listings).

Say what now?

I don’t know Joel, but I’m sure he’s a brilliant guy. And like many brilliant guys, he appears to have forgotten some simple truths.

The business model matters.

What I mean, quite simply, is that how a company actually makes money means something. Calling real estate brokers a “media publisher” doesn’t make them one anymore than calling a pile of poop “caviar” does.

The media business is pretty straightforward in how it makes money. It either (a) sells the content via subscriptions or some other pay-by-consumer model, or (b) cons convinces some company to pay to advertise to the consumers of content. As long as money coming in is greater than the money spent on creating and distributing the content, you’re in the media business, baby! Trulia and Zillow are in the media business (until they’re not, of course, but we’re assured, assured, that will never happen by Trulians and Zillowites).

In stark contrast, the real estate brokerage business makes money upon the closing of a transaction in which a piece of real property goes through a change in legal status. Typically, that’s a transfer of title. But it could also be the execution of a lease, creating a leasehold estate. The brokerage makes money by commissions tied to the final sale/lease price. What the heck does that have to do with the media business?

The content is given away for absolutely nothing, because that ‘content’ is nothing more than advertising, promotion, and marketing for the underlying asset. This is tantamount to claiming that J. Crew is actually a media company because it puts out a catalog.

If real estate companies were to actually act like media companies, they would be inking deals wherein publishers would pay them for their content (aka, listings), or they would get some other company to pay them money to put advertising on their content (aka, listings).

Alas and alack, the legal status of listings is very much up in the air, I’m afraid. After all, who owns the listing? Is it the agent? The seller? The MLS? The brokerage company? The mega national franchise networks such as Century 21?

If the national Century 21 organization (a division of Realogy) inked a deal with Google to send it listings for $1/listing, would the lawyers for the various MLS’es and agents and brokers break the sound barrier in getting to the courthouse to file a suit? Or just fall short of Mach 1?

Look, I dig what Halstead has done from a technical standpoint. As a web guy, I like the user interface, the clean but functional design, and the map integration. But let’s not get carried away here.

From a strategic standpoint, what Halstead has done is properly described as “brand suicide”. Halstead has essentially told every single visitor to the Halstead website, “Our agents know jackshit about the neighborhoods in which they are supposedly experts.” If you want to know where to move to in New York City, don’t ask the boys and girls at Halstead — no, go read New York magazine. That, my friends, is brand suicide.

If real estate is local, then presumably the value of real estate agents is local knowledge. Farm that out to some publication, and you’ve essentially made your real estate agent a glorified paperwork clerk. But, oh yeah, pay me 6% please! That makes for a very compelling value proposition.

Why are we celebrating this again?

What Halstead should have done instead is to make sure that every single agent on its roster is in fact a local neighborhood expert. If you sell million dollar condos in SoHo, sister, you’d better know where to go for the best sushi dinner, which dry cleaner will wreck my $4,500 Brioni suit and which one won’t, and where I can take my dogs for grooming. You’d best know which elementary school my kids will be attending if I buy this condo vs. that condo. Then, Halstead should have done everything in its power to brand those agents as local experts, and kicked New York magazine to the curb.

But I guess it’s easier to take the lazy way out and ink a deal with New York. That way, you could be described as a “media publisher” too, while you flush your brand down the toilet.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

15 COMMENTS

  1. Notorious,

    I can’t speak for Joel, but I think your points definitely co-mingle themselves rather than serve as opposition to one another. What you are saying is that brokers and agents should become the source for local information, and I seriously doubt that you and Joel would disagree on this point (I definitely agree). I also see that there is some value, not a small amount of value, in leveraging trusted media outlets and striking deals to drive more value on an existing web presence. On this front, I think Halstead has flat out done a great job. I, for one, absolutely love New York magazine. Just my two cents, which I am sure you a preparing to attempt destruction upon as we speak.

  2. Notorious,

    I can’t speak for Joel, but I think your points definitely co-mingle themselves rather than serve as opposition to one another. What you are saying is that brokers and agents should become the source for local information, and I seriously doubt that you and Joel would disagree on this point (I definitely agree). I also see that there is some value, not a small amount of value, in leveraging trusted media outlets and striking deals to drive more value on an existing web presence. On this front, I think Halstead has flat out done a great job. I, for one, absolutely love New York magazine. Just my two cents, which I am sure you a preparing to attempt destruction upon as we speak.

  3. Hi Christian,

    Please call me Rob. 🙂 The “Notorious” thing is from my way-back dotcom days when we used to have these insane intra-office Unreal tournaments…

    In any case, I won’t disagree that there’s some value in leveraging an existing media outlet. But what Halstead did is to get short-term value by killing its longterm brand value proposition

    Basically, Halstead outsourced local content to New York magazine. One of the key strategic drivers in any business is that you never, ever outsource your core competency — that thing you do which gives you your value proposition vis-a-vis the market.

    Maybe the issue here is that Halstead simply didn’t see local expertise and knowledge as a core competency; it didn’t view them as an important value proposition.

    I would argue that if anything, local knowledge is the most important value proposition. Because otherwise, real estate agents are a commodity good, and it doesn’t matter one bit whether the customer uses a Halstead agent or Joe Dirt agent. And even more threatening, the simple matching of buyer with property is something the Web is awfully good at doing. Why even bother with an agent?

    If more real estate companies spent time thinking about their actual value proposition, their vector of differentiation, I think they’ll realize that the brand value of the enterprise is intimately connected to issues of Knowledge, Expertise, and Advice — all in an intensely local context.

    -rsh

  4. Hi Christian,

    Please call me Rob. 🙂 The “Notorious” thing is from my way-back dotcom days when we used to have these insane intra-office Unreal tournaments…

    In any case, I won’t disagree that there’s some value in leveraging an existing media outlet. But what Halstead did is to get short-term value by killing its longterm brand value proposition

    Basically, Halstead outsourced local content to New York magazine. One of the key strategic drivers in any business is that you never, ever outsource your core competency — that thing you do which gives you your value proposition vis-a-vis the market.

    Maybe the issue here is that Halstead simply didn’t see local expertise and knowledge as a core competency; it didn’t view them as an important value proposition.

    I would argue that if anything, local knowledge is the most important value proposition. Because otherwise, real estate agents are a commodity good, and it doesn’t matter one bit whether the customer uses a Halstead agent or Joe Dirt agent. And even more threatening, the simple matching of buyer with property is something the Web is awfully good at doing. Why even bother with an agent?

    If more real estate companies spent time thinking about their actual value proposition, their vector of differentiation, I think they’ll realize that the brand value of the enterprise is intimately connected to issues of Knowledge, Expertise, and Advice — all in an intensely local context.

    -rsh

  5. The Halstead and NY Mag arrangement is merely web based. If you look at it from a web based business perspective, content is king and time is money. If you provide content to the buyer/seller on the web about the property and n’hood the more adept they are to work with that particular brand name and a real estate company. If you provide neighborhood information NOW then they are more educated then they were before they visited the site and further qualified.
    You are looking at it from a real estate perspective from ten years ago when buyers didn’t go to the web for their information and they directly to the gatekeeper, the broker.
    In today’s day once the buyer gets the information on the web and get informed they reach out to the agent for a personal approach to micromanaging a stressful experience.

  6. The Halstead and NY Mag arrangement is merely web based. If you look at it from a web based business perspective, content is king and time is money. If you provide content to the buyer/seller on the web about the property and n’hood the more adept they are to work with that particular brand name and a real estate company. If you provide neighborhood information NOW then they are more educated then they were before they visited the site and further qualified.
    You are looking at it from a real estate perspective from ten years ago when buyers didn’t go to the web for their information and they directly to the gatekeeper, the broker.
    In today’s day once the buyer gets the information on the web and get informed they reach out to the agent for a personal approach to micromanaging a stressful experience.

  7. Greg H –

    Yes, if you look at it from a web based business perspective, content is king and time is money. Problem is that Halstead — as far as I know — is not a web based business. It’s very much a real-world based business, involving the taking of fees from transactions in real property.

    If I’m looking at it from a ten-year old real estate perspective, then you’re looking at it from a fantasy perspective that simply does not exist, and does not jive with the reality of Halstead’s business model.

    Besides, I’m not looking at anything from a web or non-web perspective. I’m looking at the issue from a branding perspective. For the vast majority of brokerages, a website is a consumer acquisition tactic; a brand is a strategic differentiator. Sacrificing your longterm brand value for the sake of a tactical advantage, in my opinion, is shortsighted at best and extraordinarily destructive at worst.

    Note that I never said Halstead shouldn’t provide local information on their website. In fact, I believe they absolutely should. It’s just that I believed they should have seen the brand value of having their agents provide that information directly on the website, thereby enhancing the branding of their agents as local experts. It would have been worth the extra money for Halstead to pay New York magazine more money to have the reviews appear as if written by Halstead agents. (Assuming that option existed for enough money.)

    To dismiss what Halstead did here as “merely web-based” betrays a real misunderstanding on either your part or on my part on what makes up the value proposition of a real estate agent. What they did was to establish New York as the local expert, and Halstead agents as mere paper-pushers.

    Either that’s a brilliant time-saving device, if an agent’s inherent value to consumers is merely as a paper-pusher, or brand suicide. I happen to think it’s the latter.

    -rsh

  8. Greg H –

    Yes, if you look at it from a web based business perspective, content is king and time is money. Problem is that Halstead — as far as I know — is not a web based business. It’s very much a real-world based business, involving the taking of fees from transactions in real property.

    If I’m looking at it from a ten-year old real estate perspective, then you’re looking at it from a fantasy perspective that simply does not exist, and does not jive with the reality of Halstead’s business model.

    Besides, I’m not looking at anything from a web or non-web perspective. I’m looking at the issue from a branding perspective. For the vast majority of brokerages, a website is a consumer acquisition tactic; a brand is a strategic differentiator. Sacrificing your longterm brand value for the sake of a tactical advantage, in my opinion, is shortsighted at best and extraordinarily destructive at worst.

    Note that I never said Halstead shouldn’t provide local information on their website. In fact, I believe they absolutely should. It’s just that I believed they should have seen the brand value of having their agents provide that information directly on the website, thereby enhancing the branding of their agents as local experts. It would have been worth the extra money for Halstead to pay New York magazine more money to have the reviews appear as if written by Halstead agents. (Assuming that option existed for enough money.)

    To dismiss what Halstead did here as “merely web-based” betrays a real misunderstanding on either your part or on my part on what makes up the value proposition of a real estate agent. What they did was to establish New York as the local expert, and Halstead agents as mere paper-pushers.

    Either that’s a brilliant time-saving device, if an agent’s inherent value to consumers is merely as a paper-pusher, or brand suicide. I happen to think it’s the latter.

    -rsh

  9. If you want a commercial establishment review, it seems like that is a position that a real estate broker is not as qualified as a professional critic which is trained and seasoned to critique for a living. I personally want information, don’t care where it comes from, and if a real estate company is willing to invest money in providing expert critic information on their site, I welcome it. If they are willing to put on google maps or hop stop directions to an open house so I can get there quicker, I am a fan of that because those mapping sites are experts, and I need information now and if an agency can provide access to that expert information and make a stressful process easier than so be it. Real estate agents wear many hats but the boom of the internet changing how 80% of people approach their real estate search lends agencies to step up their level of quality service. Real estate agent’s core competency is that they are brokers, they will find you the best stager, the best moving company, the best photographer, the best floorplan drafter, the best mortgage broker, the best lawyer, the best critics to critique your commerce, they broker…let them broker and operate as full service instead of wasting time imitating a critic and reviewing commercial establishments.

  10. If you want a commercial establishment review, it seems like that is a position that a real estate broker is not as qualified as a professional critic which is trained and seasoned to critique for a living. I personally want information, don’t care where it comes from, and if a real estate company is willing to invest money in providing expert critic information on their site, I welcome it. If they are willing to put on google maps or hop stop directions to an open house so I can get there quicker, I am a fan of that because those mapping sites are experts, and I need information now and if an agency can provide access to that expert information and make a stressful process easier than so be it. Real estate agents wear many hats but the boom of the internet changing how 80% of people approach their real estate search lends agencies to step up their level of quality service. Real estate agent’s core competency is that they are brokers, they will find you the best stager, the best moving company, the best photographer, the best floorplan drafter, the best mortgage broker, the best lawyer, the best critics to critique your commerce, they broker…let them broker and operate as full service instead of wasting time imitating a critic and reviewing commercial establishments.

  11. Greg H –

    Real estate agent’s core competency is that they are brokers, they will find you the best stager, the best moving company, the best photographer, the best floorplan drafter, the best mortgage broker, the best lawyer, the best critics to critique your commerce, they broker…let them broker and operate as full service instead of wasting time imitating a critic and reviewing commercial establishments.

    Here’s the issue. If you define a real estate agent’s core competency is as a “broker” — meaning, someone who matches buyer and seller — then you’ve essentially removed most of the value. Take a look at financial services and what the advent of web-based trading has done to the old-school stockbrokers.

    All of the ancillary services you mention — finding a stager, moving company, etc. — are things that a website does better than just about any human. The key word is “best” — but why would you trust a broker’s word for who is the best moving company and who is not? Why would you trust a real estate agent’s recommendation on the quality of legal services?

    Since your point is that New York magazine has professional restaurant critics and whatnot, and real estate agents are not, I’m failing to see why you’re so eager to trust a real estate agent for advice on attorneys and mortgage companies.

    Nonetheless, you’re still not seeing the real issue here: the value proposition of a real estate agent in the Internet age. If it is, as you say, “brokering” then the industry is doomed. If, on the other hand, the value is advisory services whether that advice covers who the best movers are, who the best lawyers are, and where the best neighborhood Irish pub is, then from a branding perspective, it is imperative that the company establish the bona fides of its people as experts capable of rendering that advice.

    -rsh

  12. Greg H –

    Real estate agent’s core competency is that they are brokers, they will find you the best stager, the best moving company, the best photographer, the best floorplan drafter, the best mortgage broker, the best lawyer, the best critics to critique your commerce, they broker…let them broker and operate as full service instead of wasting time imitating a critic and reviewing commercial establishments.

    Here’s the issue. If you define a real estate agent’s core competency is as a “broker” — meaning, someone who matches buyer and seller — then you’ve essentially removed most of the value. Take a look at financial services and what the advent of web-based trading has done to the old-school stockbrokers.

    All of the ancillary services you mention — finding a stager, moving company, etc. — are things that a website does better than just about any human. The key word is “best” — but why would you trust a broker’s word for who is the best moving company and who is not? Why would you trust a real estate agent’s recommendation on the quality of legal services?

    Since your point is that New York magazine has professional restaurant critics and whatnot, and real estate agents are not, I’m failing to see why you’re so eager to trust a real estate agent for advice on attorneys and mortgage companies.

    Nonetheless, you’re still not seeing the real issue here: the value proposition of a real estate agent in the Internet age. If it is, as you say, “brokering” then the industry is doomed. If, on the other hand, the value is advisory services whether that advice covers who the best movers are, who the best lawyers are, and where the best neighborhood Irish pub is, then from a branding perspective, it is imperative that the company establish the bona fides of its people as experts capable of rendering that advice.

    -rsh

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