Notorious R.O.B.

Just caught Coldwell Banker’s new campaign on TV while watching some animated movie with the kids.  Here it is:

Wow, what an improvement over the misguided Talking Heads campaign:

I do think CB should have stressed the 103-years of experience thing just a bit more.  Talked about how they’ve seen ups and downs, and helped clients through good times and bad, etc.  Something kinda like this ad:

Since Coldwell Banker is probably the only real estate brand that could do a “heritage” ad like this, I rather think it ought to play up that advantage.  Especially now.

But that minor kibitzing aside, the new ad is effective all around.  It’s emotional in just the right way, strikes the right tone of positivity and reassurance, and reminds people that a house is not a bond fund but a place to live.

Back that campaign up with a social media blitz on all channels reminding people about how special their home is, how CB’s heritage helps in this time of uncertainty, and the like, and I think CB has a winner on its hands.

Anyhow, kudos to the marketing team at CB.  They got this one right, in my view.

-rsh

Eric Blackwell of Bloodhound picks up on this story that Zillow has entered into a relationship with a number of newspapers and asks a series of pointed questions. The comments section has some hot and heavy action going on therein, and it makes for an entertaining read.

I saw this deal cross the news earlier as well, and thought it was interesting on many fronts. For one thing, unless I’m very mistaken about the nature of the deal, it simply means a co-marketing arrangement where the partners simply add ammunition to their sales teams:

The agreement expands the network to include display non-real estate related advertising. Greg Schwartz, vice president of advertising sales at Zillow, said the Web site will focus on “moving-specific” advertisers like home improvement and furniture companies in search of national coverage. Meanwhile, newspapers, such as the San Francisco Chronicle, for example, can offer a furniture retailer additional coverage through Zillow’s San Francisco channel.

So a ad sales guy sitting in the LA Times office can sell a million impressions on Zillow.com, and a Zillow sales person can sell Home Depot on a package deal of Zillow ads plus say 150 newspaper ads.

It isn’t clear whether this covers only online, or print also, but either way, all we’re talking about here is a “Hey, you can sell my stuff, and I can sell yours” deal. Makes a lot of sense to me without a tremendous amount of downside.

Now, David G. from Zillow goes on to say in the comments of the Bloodhound post above that:

Today’s announcement relates to a large advertising network advertising for reaching real estate consumers but there are also technology and content aspects to these partnerships. Later this year, Zillow will begin to power the online real estate sections of our newspaper partners’ websites. And listing content is already pushed to Zillow via newspapers that are selling featured listings on the site.

This tidbit is interesting as well. Because as it happens, there is an almost exact parallel on this play that might prove illuminating (or not).

Cityfeet.com did this exact play in commercial real estate a few years ago. They went out and signed up newspaper partners, powering the online real estate sections of these newspapers for commercial real estate search. I’m guessing that Cityfeet couldn’t get the online residential real estate sections, because those were too closely connected to major revenue centers for the newspapers. That Zillow was able to wrest those away from the newspapers is extraordinary. And extraordinarily interesting as commentary about the newspaper business.

It appears that newspapers are headed for some sort of a cliff.

That's a double black-diamond slope, son!

The news industry is panicking, to say the least:

The new bad news is the decline in online revenues.

In the best of times, online never contributed more than 10% of most publishers’ total revenues, but with double-digit growth, it was the sole bright spot in the middle years of the decade, holding the promise that interactive revenues might some day make up the losses on the print side.

Unfortunately, most of the growth in the online revenues was due to “up-sells” from print classified listings. As the volume of print listings declines at an ever-faster pace, that means there are fewer opportunities for online “up-sells.”

Considering that real estate advertising in newspapers fell by a whopping 36% in Q2, if online advertising also fell for newspapers, it isn’t clear that there is a sustainable business here for the dead-tree media companies.

So… Cityfeet couldn’t wrest away residential real estate sections from newspapers. Zillow did. In large part, this is because Zillow is many times larger and better funded than Cityfeet ever was.

However, let’s pause a moment and consider this.

• Newspapers lose 36% of real estate ad sales.

• Newspapers lose online ad sales for first time in years.

• Newspapers do a deal with Zillow that is essentially “We take 50% commission for selling your ad space, Zillow.”

• Zillow stands ready to “power newspaper real estate sections” — meaning all of that traffic probably goes to Zillow.

This looks like a total abdication of the real estate space by the newspaper industry, at least to me.

While that’s a big win for Zillow, I have to sound a cautionary note.

Cityfeet, you see, sputtered along for a couple of years before getting bought by Loopnet for $15m. (Since Cityfeet at the time boasted 100 newspaper relationships, including the big names like New York Times, Boston Globe, and the like, that means each relationship was worth about $150,000. Maybe. It isn’t yet clear that Loopnet has made back its $15m investment in Cityfeet.) The reason, quite simply, was that the brokers and agents who listed on Cityfeet were not seeing a lot of traction. Newspaper readers and newspaper website visitors tend not to be serious consumers for commercial real estate.

Now, given the differences between commercial and residential real estate, this may not be a problem for Zillow. 80% of commercial buyers/lessees do not start their search on the Web, for one example. But this should sound some warning gongs:

“This partnership allows advertisers with our papers to reach not only local real estate consumers who live in particular markets, but also consumers who may be moving to particular markets, via their searches on Zillow.com,” Lincoln Millstein, senior vice president of Hearst Newspapers, said in statement. “This is a significant opportunity for advertisers to target a very large number of consumers on the verge of major home-related commerce.”

Um, Lincoln… I don’t know how to break this to ya but… I doubt that visitors to Zillow.com can be described as being “on the verge of major home-related commerce.” Maybe Zillow has statistics that prove me wrong, which I would welcome, but going to a Zillow or Trulia or any of the major consumer real estate websites strikes me as merely the first step in a fairly long journey that may or may not end in “major home-related commerce”. If by “being on the verge”, Lincoln Millstein meant “within three to six months” then his expectations are properly set. If he means more like, “a matter of weeks”, I think he might be disappointed.

And his advertisers might be disappointed. Will consumers remember seeing some ad for a mortgage product on Zillow.com three months later as they’re finally sitting down with their realtor and going over mortgage paperwork? I really, really doubt that one.

As with all prognostications, I might be dead wrong on this one. But all in all, I’m not sure I see this major win here that the newspapers and Zillow would like us to see. Time will tell, but the trends are not encouraging for either party.

-rsh

This is from a conversation I had at Inman SF ’2008. Perhaps conversation is too dignified a term for what was actually going on at the time, since all of the participants were three sheets into the wind by that point in the night. Let’s call it more like… inspired spouting of words between people who were far too happy for that time of night. I believe the participants were Jeff Corbett, Daniel Martin, Joseph Ferrara, Dr. Salvatore Giammarresi (who just might be the smartest guy in real estate), and Jessie Beaudoin from Retrove. I say “I believe” because well, see aforementioned number of sails and the wind and the effects thereunto. For all I know, Santa Claus was at the discussion and I may not remember.

Nevertheless… we somehow got onto the topic of business models because I had recently written a post criticizing Zipvo’s business model. Let’s just say that some of the folks agreed with me, while others thought I was hitting the ye olde pipe pretty hard. When you’re in San Francisco, with a bunch of young real estate tech people, discussing startup concepts, business models, and such is inevitable. I just couldn’t help but think that many of the ideas I was hearing were weak, and fundamentally weak, because of a simple definition problem: Who is the customer? Read the rest of this entry »

During one of the sessions here at RE Bar Camp, an interesting point came up.

There was a company here presenting named Zipvo — they do real estate video for agents.  Their technology seems good; they seem like bright guys.  The issue was, as I saw it, their incredibly flawed business model.

They want advertisers to fund the site — they don’t want the agents to pay anything to upload videos, to market listings, etc.  They’ll get advertisers to pay for all that.  BUT, they’re only allowing banner ads at the bottom of the page.

I pointed out that as an advertiser (something I have a bit of experience with), that was just about the least compelling value proposition possible.  It’s a video site — but no interstitials?  No sponsorship opportunities?  How about in-video product placement?

The obvious advertisers are giant real estate companies, like Realogy or one of its brands.  But the agents who actually generate all the content will absolutely not countenance something like that.  Imagine you’re a Keller-Williams agent who spent all this time making a video, but before it runs, there’s a 30-second Coldwell Banker ad.

The non-real estate advertisers are consumer-oriented companies who have spent $10m creating their last TV ad.  But they can’t place that in the video ads?

Anyhow, in the discussion, one of the participants raised the point that what’s important is to start something, then iterate.  It’s better to have something “out there” than nothing.

That’s true to a degree.  A bad plan executed swiftly is preferable to a good plan executed with lethargy.

Having said that… there are some things you really don’t want to iterate as you go.  The basic business model — how you actually make money — is one of those things.  That kind of thing pisses off your customer (i.e., the advertiser) and your content producers (i.e., the agents) when you were doing things one way, then completely change the fundamental assumptions.

I wish the Zipvo guys a lot of luck — they seemed like great fellas.  But it’s in the spirit of helping them that I have to tell them… don’t iterate your fundamental business model.  Get that figured out first, then iterate the other stuff as you go.

-rsh