In the course of research for something I’m working on, I ran across an absolute gem: the white paper published by Cendant (the former parent company of what is today Realogy) in 2004 entitled, The Need for More Effective Online Marketing by Real Estate Professionals. The unnamed author(s) wrote the white paper for the real estate brands then owned by Cendant: Century 21, Coldwell Banker, ERA, and Sotheby’s.
Keep in mind that 2004 was before Trulia and Zillow saw the light of day. (Trulia launched in beta in September 2005, and Zillow opened its doors in early 2006.) Those were the days before the DOJ-NAR lawsuit. In March, when the white paper was published, Google had not yet gone public. Facebook was just a college student website limited to Ivy League students.
In other words, in Internet terms, this paper is ancient history. It’s like the Peloponnesian Wars.
Reading through the white paper, I realized that the author was prescient in some respects, and amazingly, his comments and questions remain as relevant in 2013 as they were in 2004. Let’s check out some of those thoughts.
Right up front, the author (whom I shall name Cendant hereafter) writes the following:
The Internet has had – and will continue to have – a profound effect on the business of real estate. Our industry, however, is not nearly as effective as it needs to be in the all- important online marketing of our work product – home listings. Nearly three-quarters of today’s real estate buyers begin their home search on the Internet1, yet the industry is plagued with online listings that often appear as static as they were in the late 1990s. Too many home listings on the Internet are grossly inadequate by today’s standards of online marketing.
This poses two critical issues for real estate professionals today. First, it is evident that consumers want more and richer information online – photos, detailed property information and virtual tours – than the industry norm today. Secondly, there are others in the marketplace who are prepared to do a far better job of marketing home listings on the Internet than what is currently happening on our real estate Web sites. [Emphasis mine]
Amazing. Cendant pretty much nailed what would happen, no?
A lament often heard amongst certain precincts of the World of REALTORS is that “we gave away the farm”. It goes something like, “If only we brokers hadn’t given away free data to all these interloping aggregators, everything would be better today.” There are quite a few folks, many extremely influential, who believe that It’s Not Too Late to battle the evildoers by withholding data from these aggregators who just use the realtor’s data to sell leads back to them.
But look in Section V, where Cendant points out that the Internet is both an opportunity and a threat:
Nearly 90 percent of Internet home searchers used a real estate agent, compared to only 79 percent of non-Internet users. This statistic demonstrates both opportunity and peril for today’s real estate practitioner. First, it is not too late for agents to capture online consumers as “customers for life.”
On the flip side, time is running out for complacent real estate professionals. Those agents who do not move aggressively to attract and retain this next generation of real estate consumers may be watching from the sidelines in the future. Motivated home buyers and sellers will simply look elsewhere for service if their Internet needs are consistently not met.
The new competitive threat that Cendant was worried about in 2004 — remember, no Trulia or Zillow back then — was photographers and virtual tour providers:
What exactly is this new competitive threat? For example, it is conceivable that consumer demand could create a new service model that would come between the consumer and the sales associate. It is not far-fetched to imagine digital photography and virtual tour service providers who would market their online-listing enhancement services directly to consumers. They may start by targeting FSBOs (for sale by owners), but they could expand their efforts to include home sellers who do not feel that their real estate agent is properly marketing their homes online. Any consumers who would feel a need to buy digital photos and virtual tours for their home listing on their own certainly would not believe that they are receiving “full service” from their real estate agent. To carry this example further, would anyone be surprised if this same consumer then challenged his agent to reduce his or her commission?
With the benefit of hindsight, we see that indeed, the Internet has proven to be the best friend of some agents and some brokers. Those professionals who got it in 2004 can tell story after story of using the power of the Internet, email, database marketing, blogging, social networks, etc. to create “customers for life”, just as Cendant suggested.
On the other hand, the photographers and virtual tour providers never did pose any sort of threat. Disintermediation and reduction in commissions have not happened. Yet.
Even the feared aggregators have turned out to be friends to some agents and some brokers. Sure, they have their detractors, but they also have customers who swear by them, who generate ROI by the bushel, and would gladly keep paying thousands of dollars to Trulia, Zillow, and Realtor.com as long as those thousands multiply into tens of thousands of dollars. It’s all about the money, y’all.
Part of the reason is that many of the major companies and top producers in the real estate industry adapted. Even by the time this white paper was published, there were numerous agents and brokers who had really embraced the online game and had been building expertise on it for years. As I mentioned on a recent client call, there is no such thing anymore as an “online brokerage” (see, e.g., DOJ lawsuit vs. NAR) since every single brokerage is an “online brokerage” in a sense.
At the same time, there have been those who did not adapt.
The Gap Between What Consumers Want, and What Real Estate Professionals Deliver
It is also a useful comparison to look at a Web site like eBay, where companies and individuals put their products and services up for sale in an online auction format. The level of detail that individual sellers contribute about their products is impressive. For example, a “cat condominium” – yes, a house for cats – was listed for sale on eBay in February 2004, and it had eight different photos and a detailed written summary. The initial bid requirement for this item was $79, yet the seller displayed more photos and offered a more detailed written description about this pet playground than many real estate professionals provide with a typical online home listing.
With that in mind, there is a dramatic disconnect between what consumers want and need, and what real estate professionals are delivering in terms of online marketing presentations for home listings. (Emphasis mine)
Surely, after nine years and the undoubted importance of online marketing, we have mastered online marketing, right?
Yes, that does actually say “Meow Meow”. You have to read the whole blogpost for a belly laugh. Or a belly ache, depending on how you respond to the pain of others. And you can’t miss this classic from Jay Thompson, formerly of Phoenix Real Estate Guy, now of Zillow.
Let’s take a look at Cendant’s recommendations from the Where Do We Go From Here section:
The Internet offers an unprecedented opportunity for agents to “sell” the best attributes of a house before the buyer ever sets foot in it. No other medium can make the same claim. Yet the majority of real estate professionals do not even approach online marketing with the same sense of urgency or attention to detail in which they would prepare for an open house. A traditional open house generates only a fraction of the traffic as compared to the number of eyeballs viewing online. Every day is an “open house” on the Internet, but we must give buyers and sellers more images and information online, or they will take their business elsewhere. To keep pace with consumers’ needs and demands, our real estate practitioners need to take action now.
Regardless of where our agents’ listings appear – a local company Web site, a national brand site or Realtor.com – we must strive for all of our respective listings to appear with photos, and lots of them. Anything less than 100 percent of listings with a photo is a disservice to home sellers and a turnoff to potential home buyers. And we must not stop with just one photo. Imagine how happy consumers would be if they knew they could always count on our online listings to provide multiple photos and/or virtual tours showcasing every room in the house. We must also provide consumers with additional online resources such as information on neighborhoods, schools and communities.
Photos are just one piece of the equation. Again, the issue is information. Gone are the days when agents would protect listing information in MLS books from consumers. Now is the time for us to deliver more information to consumers, not less. [Emphasis mine]
Please raise your hand if you think that the time for agents to deliver more information to consumers, not less, was in 2004. How about now, in 2013?
It is simply staggering to think that Cendant — CENDANT, not some piddly-dink ma-n-pa broker or some Silicon Valley techno-brokerage, but the parent company of C21, CB, ERA, and Sotheby’s — wrote that in 2004. And that in 2013, we all know that many a real estate “professional” still do not approach online marketing with anything close to approaching “attention to detail.” We know that we’re still arguing about how much, or how little, of what kind of information to deliver to consumers.
Cendant’s white paper suggested that real estate agents ask themselves some of these questions when thinking about online marketing:
- Do my listings distinguish me from the competition online, and do they positively reflect on the attention to detail and level of service I seek to provide my clients?
- Is this online presentation compelling to me as a home buyer?
- Does the listing description tell me anything special about the home or is it simply a laundry list of details that looks like any other MLS listing?
- Are the elements of this listing so complete that it would motivate me to contact the agent to schedule an appointment to visit the home in person?
Do these questions seem dated and quaint to you? Yeah, me neither.
Since I’m currently in the market to buy a house, I have seen firsthand some of the work product of agents nine years after this white paper. To be sure, there are some who are real pros. Their photos are obviously professional, the staging is meticulous, the descriptions are eye-catching, and 30+ large photos are not uncommon.
Then there are those others. Dark photos of dark rooms, blurry, fuzzy, taken-from-a-cellphone works of art, descriptions that are worse than useless and yet ARE IN ALL CAPS AS IF THAT WOULD MAKE IT SEEM SOMEHOW ATTRACTIVE. That agent is going to get paid tens of thousands of dollars… for that?
That wouldn’t have gotten it done in 2004. It sure as hell ain’t gonna get it done in 2013. Yet, nine years later, here we are.
Whoever wrote that Cendant white paper should be commended for his/her foresight. (I can say for sure that I didn’t write it, though I wish I had.) And if we in the industry are going to lament anything, we probably ought to lament the fact that many of the “professionals” still haven’t learned, still haven’t taken the advice from the ye olde days when the Internet was not the province of giant technology companies.
How then, do we move forward?
Suggestions are welcome.