"The Wheel of Time turns, and Ages come and pass, leaving memories that become legend. Legend fades to myth, and even myth is long forgotten when the Age that gave it birth comes again."
It’s a hot Saturday morning here in Houston, and the sunlight is so strong you can almost feel the weight of it on your skin. Maybe it’s early onset of sunstroke, but I felt like musing on random things. Feel free to skip this post; it isn’t likely to be useful to anyone.
But I’m thinking about Google+ more, about Internet 2.0, and human beings. I wonder if the future — what we might term Internet 2.0 — will simply be a return of the walled gardens of the early days of the Internet. Things go in cycles. The Wheel of Time turns.
As I’m sure you all have heard by now, Zillow has gone public this morning and at least the first day’s worth of trading has been beyond anyone’s wildest expectations. Zillow priced its offering at $20 per share, way above the original $12-14 range, and in immediate trading, the stock went as high as $60. It is unknown where it will settle, but… that’s now a game for Wall Street traders.
I did have a quick question for y’all, though, because some of you are really smart folks in the real estate industry. This paragraph from GigaOM:
And all this from a company that has yet to turn a profit. Zillow made nearly $30.5 million in revenue in 2010, but ultimately posted a net loss of about $6.8 million for the year, according to regulatory filings. Ostensibly, the $70 million Zillow made in Wednesday morning’s IPO will be put toward initiatives that will boost the business’ bottom line.
So… what initiatives was Zillow unable to do in the past to boost the bottom line that it will now be able to do with an extra $70 million in funding? How do you think Spencer and team will spend that money to improve profitability?
Marketing? Technology? More salespeople? What would Zillow have to do to become more valuable/extract more money from the real estate broker/agent?
Speculate away! I doubt we’ll get authoritative answers from anyone at NASDAQ: Z since those are forward-looking statements. I’m curious what the community thinks these initiatives will be.
The other day, at the as-yet-unnamed Houston Social Media Club dinner, we got to talking about (what else) using social media for marketing purposes. I was reminded of that discussion checking out the new InmanNext post on Engagement by Michael McClure (that’s Mr. ProfessionalOne to you). [By the way, kudos to Chris Smith for getting InmanNext launched with its slate of writers, thinkers, and doers. Great job, Chris. I'll give you all the negativity over cocktails in San Francisco.]
Michael lays out generally solid advice, as he usually does. If you’re looking for guidance on how to use social networks generally, you could do a whole lot worse than his post. Now, Michael gives the following sage advice:
First, because success IRL is predicated heavily on the quality of the relationships you build. I won’t attempt to explain or justify this point, because I think most people know it to be true.
Second, because this same principle – the idea of success hinging on the quality of the relationships you build – is equally true in Social Media. Remember that people are people, whether online or offline.
Third, because there is a direct correlation between the quality of the relationships you have and the degree to which you successfully engage within those relationships.
For those of us who have been in or around this whole social media marketing thing over the past few years, all three points are rock solid. But on this blog, we don’t rest with rock solid conclusions — we push on into the frail forsaken frontier of foolish questions.
The foolish question of the day, then, is: What assumptions must we make in order to accept these three as rock-solid principles?
Put another way, those marketers who strongly advocate social media as the future of marketing must wrestle with, and answer, the challenge of Apple, Inc.
A mere six days ago, NAR’s Chief Economist (and my doppelganger) Lawrence Yun released this cheery video forecast on housing for the remainder of the year:
Lawrence is predicting a slight pickup for 2011 over 2010; he thinks the second half of this year will be better than the second half of last year. New home sales will still be hurting, he thinks, but existing home sales should improve.
He based this forecast on the idea that the employment picture was slowly improving, as seen in this video:
Lawrence says he thinks we’ll see 1.5 million new jobs in 2011, maybe a little less. But “at least we’re not losing jobs, and losing potential for housing demand”. He thinks we’re on the right track, albeit slowly.
So he’s thinking 1.5M new jobs this year, 2M next year.
Well, the latest job report is dismal, even grim. The official government report was that only 18,000 jobs were created in June, way, way below the expectations of economists of around 150,000. Furthermore, the news is even worse than it seems.
Ah, but there is a glimmer of hope, it seems… read on for more.
The Wall Street Journal reports that rents are up and vacancies are down across the United States:
Apartment landlords are enjoying rising rents and falling vacancies.
The average effective rent, the amount paid after discounting, was $997 in the second quarter of the year, up from $974 a year earlier, according to a report scheduled for release Thursday by Reis Inc., which tracks leasing data for 82 markets. Second-quarter rents rose in all but two markets.
Yay for landlords, I suppose. And yay for me, for having predicted the whole Renter Nation thing several months back. But there are some unanswered questions that naturally come to mind. Let’s ask them, shall we?
Even though this video looks like hundreds of other listing videos that real estate agents have been shooting for years now, with the help of companies like Real Estate Shows and WellcomeMat, that video, you see, constitutes journalism. It comes from the Wall Street Journal, from their Developments Blog, as part of a feature they call House of the Day. The entry above says:
The latest video is of Bob and Linda Glassman’s home on the market, fitting for the upcoming Independence Day holiday. It dates to the late 18th century and was built for the nephew of a man who led a battle at Concord in 1775.
The photos are “courtesy of Coldwell Banker Residential Brokerage”. Good for them, I say, to get so much free advertising for one of their listings, one priced north of $4m. Because those photos are exactly what you’d see in a listing.
Listen to the well-spoken narrator recite, “has a game room, an exercise room, and a two bedroom, one bathroom apartment”. She talks about the wonderful granite countertops in the kitchen, crown moldings, custom cabinetry, and the like. Sounds like a decent real listing agent, except she simply doesn’t sound all that excited about the property.
The reason, you see, is that this narrator is a journalist. It says so right at the start of the video: “Reporter: Sushil Cheema”. One assumes that this reporter is the same Sushil Cheema who has a BA in Anthropology and a MS in Journalism, both from Columbia University (our most-brilliant-President-ever’s alma mater) and has joined the WSJ in 2008 as a “multimedia reporter”. She must be narrating these not-so-great real estate ads through gritted teeth, telling herself that this sort of whoring is the price to do real journalism at some point in the future.
I yield to no man in my admiration for the WSJ as a newspaper and as a journalistic organization, but in this case, our friends have badly erred.
We need a rather sharper distinction between real estate journalism and real estate marketing these days, especially as real estate brokers and agents get better and better at producing “content”. WSJ and other outlets that purport to be “real news” organizations ought to stop bothering with these easy eye-candy pieces, and just link to well-produced videos by actual real estate professionals.
Journalists Wanted: Report on Real Estate Matters
I suppose I get why the WSJ Online wants to do these eye-candy pieces: they’re popular with the audience. When you’re in the business of selling eyeballs to advertisers, it doesn’t much matter what you’re producing. Look at the sheer number of celebrity real estate stories all over the Web, from Yahoo Real Estate to Zillow’s Blog to AOL Real Estate. Does the fact that some movie starlet is selling her $8.4 million doghouse in Beverly Hills make any difference to any of our lives? No. But we all care a great deal for some reason, living in the celebrity-obsessed culture of the 21st century America.
At the same time, perhaps now more than ever, given the depth of the crisis in real estate, given that the proximate cause of our Great Recession (now officially worse than the Great Depression!) was real estate, given the importance of real estate to every single family in the nation, and given how much stuff is going on in real estate… we need journalists to do that thing they call “reporting” on real estate.
What’s going on with multifamily financing? What’s happening inside the banks and the loan servicing companies that have been raked so harshly over the coals on Foreclosuregate? What happened to HUD’s gigantic PETRA program to change public housing as we know it?
Maybe it’s selfish of me, as a blogger, to want journalists to report news I can use, comment on, and discuss… but isn’t the job of a journalist ostensibly to report… you know… news? Get information the rest of us can’t, or won’t, and tell us what’s going on? Isn’t that value why they get paid a salary (meager as it may be) while we bloggers opine away for free?
A Suggestion to News Organizations
Lest it be said that all I do is complain, let me suggest a possible solution to the various newspapers, online news organizations, and the like as it comes to reporting on real estate.
Launch a new affiliate program that can help you get the eye-candy content you want to generate the eyeballs so you can pay the bills, while your Columbia-trained journalists get around to digging around for real information. Here’s how it would work.
First, offer “free” content publishing to the real estate industry. That listing video above could very easily have been produced by the listing agent (and for all I know, may have been). Create a program where real estate brokers and agents can send you content, and if it meets your approval, you will publish it. Yes, it’s an ad; yes, those people are just trying to expose a client’s listing to more people. And yes, they’d love it if their listing video got picked up by CNN.com for “House of the Day” or some such. But what of it? Just let your audience know that the video came from Such-and-such Realty, and they won’t mind.
Second, create an open-ended Contributor Program. Many a blogger would give you a permanent license to a post of theirs if a big major news company wanted to republish it. Give them some small percentage (15%? 10%?) of ad revenues generated by their post, in exchange for a permanent license. They get to keep the copyright jointly, so they don’t lose ownership (as they do in so many of the $100/post freelance blogger contracts), but you get content you only pay for upon performance. Many people would do this just to have the opportunity to have one of their posts up on WSJ.com or on Forbes or whatever. As long as you’re not obligated to publish everything someone writes, you have a nearly unlimited source of free content.
And many of those bloggers would go out of their way to blog about LeBron’s new house, or some celebutard’s overpriced beach house in Malibu.
Third, create an advertising affiliate platform. I just don’t know why newspapers and local TV with their professional ad sales teams don’t bother with this. Even at some crazy splits like 60/40, and at microscopic CPM’s, many a blogger would gladly embed a little advertising code for a few extra dollars a year.
With those three programs, perhaps your Real Estate Department can make enough money to keep paying your reporters to go out and write hard news stories. We all surely could use more of those, and less of what passes for journalism in real estate these days.
Or, ignore me and you go on with your bad self “reporting” on a listing video. See where that gets ya.
I’m curious what the community thinks these initiatives will be.
