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Brief Thoughts on Google's Retreat from Real Estate

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Yes, brave Sir Google turned about / And gallantly he chickened out

As I’m sure you all have heard by now, Google has decided to beat a hasty retreat from real estate:

In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API (used by listing providers to submit listings), we’ve decided to discontinue the real estate feature within Google Maps on February 10, 2011.

That ain’t a lot of time to announce a pullback, so… either this decision has been brewing for a long time, or a new executive team somewhere in the Google hierarchy has decided to prune and trim all over the place.

Given that I’m one of those who thought Google’s Real Estate Place Pages was a big story, I suppose this retrenchment requires rethinking things. But I don’t know how much it changes things, really.

Speculation Back Then

I’ve never bought into the fear that Google would somehow one day replace the MLS and become the national source for property data. I did think that Google could bypass all consumer-facing websites, and wrote about three possible scenarios:

One, this real estate search as well as the listing details page is limited to the maps.google.com search, and consumers tend to be lazy and just do the search on the main Google site.  Google does not do to real estate listings what it already does to photos and videos by pushing them near the top of the search results on the main search page.  Existing real estate sites survive and thrive, as they have until now, as not much has changed.

Two, Google starts to push listings right onto the main page when a user searches for “homes for sale new jersey”, thereby bringing users right to the maps.google.com Real Estate Search module.  Consumers are trained over time to do real estate searches on maps.google.com, as we have been trained to do searches for driving directions or restaurants or whatever on Google Maps.  This raises the value of Google Maps immensely, but pretty much kills the existing real estate vertical search engines.

Three, Google keeps the real estate search only on maps.google.com, but consumers come to realize over time that they can find listings for homes right on that wonderful page and start to migrate over.  This will also kill existing real estate vertical search engines, but over a longer period of time, which may be enough for the Trulias and Zillows of the world to reformulate their strategy or add far more features and functionality to add value to the real estate search experience.

Well, apparently, Google chose Option One. And found out that yes, consumers are indeed lazy and were not trained to go over to maps.google.com to look for homes.

I had a feeling that Google wasn’t really putting in a lot of energy into the real estate space. Were it important for Google to become a real player, I think we would have seen more energy out of them at various conferences, or participating in some of the conversations online, or doing something to suggest that they took the vertical seriously.

I have no idea what actually happened, but I suspect some combination of consumer apathy, broker opposition (would you be paying for Google AdWords if you thought your listing data was going to create a competitor you could never take down?), and changed priorities (Google appears to be all about mobile and Groupon these days) likely led to this decision.

Implications

The clearest implication is that Google is more than willing to let the real estate web companies fight it out amongst themselves for dominance, especially since such fights put money in Google’s pockets via advertising. Now that franchises can index IDX listings, and Coldwell Banker was specifically mentioned by Google in its post, I expect that we’ll see some truly fierce competition between the so-called national real estate portals and the national franchises for top dog in the real estate web game in 2011.

(As a related aside, there was much speculation in 2010 that Google would acquire Trulia to make a real push into the real estate vertical. That is probably not going to happen after this retreat. As a result, I would put Trulia on the RE Deadpool Watchlist as it falls to #5 on the Hitwise Top 20 Real Estate Websites.)

I do think it’s worth pointing out that you could draw the wrong conclusion from Google’s move here. My good friend Todd Carpenter, usually so insightful in all things web and real estate, gets this one wrong when he writes:

I think the low usage part is telling in that it suggests that SEO is not the total solution for winning the real estate game. After all, they control those results. Most people aren’t thinking to go to Google to look for listings.

Based on both secondary research, and primary research (I conducted focus groups with real estate consumers and watched how they look for properties), I think most people are in fact thinking to go to Google to look for listings. Just because Google implemented its program in a strange, bass-ackward way, and put no effort into actually making something happen in real estate does not mean that consumers skip over Google. Far from it. As of today, anyhow, SEO still remains the single most important factor for success in the buyer lead generation game, period. Maybe one day, social search, or Twitter, or something else will take its place, but not right now. Lose the SEO game, and you’re pretty much toast.

I think all that the low usage part suggests, actually, is that consumers don’t like map-based searches. I wish I had access to some internal stats of websites that offer the standard search vs. map-based search to see how the metrics break down, but I really don’t think consumers like map-based search all that much. I think they just want to find listings quickly, start clicking through pictures, and then call someone to help them. If you got some of those metrics, please feel free to share them in comments. 🙂

So at the end of the day, not much has changed because of this decision by Google. It appears as if they’re not going to come back into these shark infested waters anytime soon either, so Google will likely be an important passive player rather than an active participant in the real estate web game. Which is just fine by most of us in the industry.

Oh yeah, by the way, can we now stop the wishful thinking on the part of some people that Google will create a national MLS to replace the dysfunctional state of the real estate nation? We must save ourselves, lads, since Brave Sir Google will not be riding to our rescue.

-rsh

5 COMMENTS

  1. Rob,

    I agree that the decision by google hasn’t changed much. Agents and brokers were not getting much traffic or leads from Google Base or RE listings on the map. Adwords and organic placement are another story, but I side with Todd in that SEO is not the total solution.

    I respectfully disagree with you on map-based search. I believe consumers do enjoy searching by map; perhaps not so much google’s real estate search; it lacked a lot of the features IDX searches contain, not to mention much less accurate data. (http://blog.roost.com/2008/08/26/accuracy-online-property-searches-examination/ ) Our metrics indicate consumers are much more likely to engage the agent/broker on web sites with map search; about 20% more complete inquiry/registration forms than on form-based searches alone.Map Search sites also get more page views.

    I think maybe where we can separate different manifestations of map searches is to look at the functions of maps, themselves. They are lousy primary data sources. Unless you are looking for information on topography, political boundaries, or directions, maps are better used as a reference or to add perspective than to actually display or impart data. So they are great to locate listings, or to give a listing perspective with respect to community and urban geography. But when you want real detailed data about the listing itself, you typically leave the map behind.

    I think google is much the same thing. A great reference to primary data sources , but not traditionally much of a data source itself. This came up in the webinar today; google’s role aggregating unstructured versus structured data.

    I would love to see the results of your focus groups and how you carried out the studies. I’m not sure a focus group will tell the whole story, since a property search experience is usually carried out over months, not minutes. And while I will certainly concede many consumers may start their search at google, I see the practical use as more of a cursory glance that will eventually take them to other sites, rather than a primary source for listing data. Map-based IDX searches usually work like this;the map serves as a cursory glance at matching results leading to the next step of viewing details away from the map.

    A good post on a very thought-provoking topic. Thanks for sharing.

    Rich

    • Thoughtful comment, Rich, as always. 🙂 Let me clarify further.

      I was taking issue with Todd’s conclusion that consumers don’t think of Google when they think of listings. That is simply not true. Like everything else, consumers go to Google first to find what they’re looking for. As you point out, they then go to the destination/publisher site, but the search always starts with Google. Which means that any real estate website that wants to be found when someone is entering the real estate market needs to have SEO as its top priority.

      All of the other stuff, enhancing listing data, providing cool tools, and video and whatever else do not matter if the consumer never finds it because the site is buried in search results.

      On the map-based search… I wonder if the engagement metrics are a result not of the map-based search itself, but because a consumer who is actually at the stage of looking at where the house is located is much further along the inquiry cycle. In other words, we’re mixing up the chain of causation – map search does not create consumers more willing to inquire; rather, consumers more willing to inquire use map search more. More page views also do not mean much, as map search itself could be implemented in such a way as to require more page views — and the causation may, once again, be reversed.

      The specific stat I’d like to see is % breakdown of traffic on a website between traditional search usage vs. map-search usage. It may be that we have to view map-search as a conversion tool rather than a search tool.

      • Rob,

        An excellent point on causation of traffic and inquiries; one I considered noting in my original reply, and left out. And it’s a very valid point about the stage of the consumer in the process. I am not certain our metrics really break it down into that level of detail where I can give you a definitive answer.And regarding the breakdown of form-vs-map in terms of actual searches run, then we would have to consider other variables, such as default vs.secondary search type, traffic volume, and any potential restrictions or forced registration settings imposed by the site owner.

        Maybe another way to look at this is also why listings on Google maps didn’t gain much traction. And that is that you are partially right; consumers don’t like to search by map in the sense that they are searching exclusively by map. The map locates the properties, but the consumer still needs to add normal criteria: bedrooms/baths, price range, property type, etc. I would wholeheartedly agree that a search where location and map scale are the only criteria would really lack value to the consumer. Google’s map search was extremely limited on criteria that would work in tandem with the map, which I think is critical.

        Future iterations of map search will combine other form-based location searches with the map, such as school districts, bodies of water, subdivisions or cities. This is one thing Google did right that IDX companies are still behind on. In other words, I don’t need to know where Arlington, TX is to search Arlington by map. I can type it into a field or select from a form, and the map takes me there automatically. Then I can add criteria to narrow the results.

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