Let’s suppose that you’re some graduate student at Beijing University and you want to write a paper on the major issues confronting the American real estate industry. So you start googling and going to blogs (like this one maybe) and open groups on Facebook and whatnot to find out what critical issues are top of mind for brokers and agents in the United States. Given that you hail from a country that doesn’t allow private ownership in land, you figure that the Americans are way ahead of you in terms of dealing with important issues that might come up as China liberalizes its real estate policies. Plus, you’ve read the news, you keep up with what’s going on.
Would the major issues be the precarious state of housing finance? Maybe American real estate professionals are all about Qualified Residential Mortgage rule. Maybe it’s dealing with the advances in Big Data. Maybe it’s trying to figure out how advances in artificial intelligence would impact things.
No, actually, our Chinese graduate student would likely find that the #1 issue on the minds of American brokers and agents is syndication. Quite literally, hundreds of thousands of brokers, agents, consultants, MLS executives, Association leaders, and vendors are talking about, debating, and getting riled up about basic questions such as, “Should I send my listings to Zillow?”
I believe it is well past high time to get over syndication. It simply is not and should not be an issue of import. There are more important things to discuss as an industry.
Therefore, in the spirit of public service, I will draw together the many strands of thinking on syndication and show that the problem has been solved. Most of this appears elsewhere on this blog or in public speeches I’ve given, but let’s see if we can’t put it all in one place for easy consumption.
The Problem With Syndication Is…
The problem with syndication is that it is totally useless. Well, actually the problem is that these big aggregators hold agents hostage; they did the whole “first one is free” thing, and now they’re raising prices all over the place. Plus, the data accuracy blows chunks and creates all kinds of confusion because these big sites have so much traffic. And I’m sorta sure that I saw Spencer Rascoff participate in a voodoo ceremony involving goats and chickens somewhere in the swamps of Louisiana.
Whatever the “problem” is with syndication, none of it actually matters, because the solution is so simple. No matter what your complaint, the following will solve your problem.
The Solution to Syndication
The folks throwing on sackcloth and wailing about syndication ignore two fundamental developments on the syndication arena.
The first is the Howard Hanna deal with Zillow.
I wrote about this in the second half of this post. The money grafs:
Maybe it’s because Hoby Hanna spoke with such calm authority, but the response to the video is… tame to say the least. Granted, we’re missing some important details, like what Howard Hanna is paying Zillow as part of this strategic partnership, but the key point comes across clearly: Howard Hanna got the concessions it wanted. What are those concessions?
It appears there was just one: don’t send leads to anyone but the listing agent. Perhaps there are details that haven’t been made public, but the main thrust of the partnership is that “all leads in all markets go to the listing agent”, as long as that agent is one of Howard Hanna’s. There will be no ads on a Howard Hanna listing, no other agents presented to consumers, etc. The inquiry would go directly to the listing agent.
And now that all of the portals saw what the deal parameters look like, it’s just a matter of time before all of them embrace the HAR.com business model: you pay a subscription fee, feed us clean data, and we send leads only to you. Yay, peace in our time.
Ya want the aggregators to dance to your tune? Do a contract with them and pay them. Problem solved. Yes, you might have to negotiate a deal that both of you are happy with, but… um, that’s just sort of the nature of business. Given that real estate people negotiate for a living to get the buyer and the seller to agree on price and terms, I feel confident that they all understand how to do a deal with the aggregators.
The second development is Edina Realty pulling out of Realtor.com.
This is significant because Edina had already pulled out of Zillow and Trulia. Realtor.com has long been considered a special case because of Move, Inc.’s strategic relationship with NAR. There were some real questions as to whether a brokerage could pull out of Realtor.com at all, while remaining in a MLS owned by an Association of REALTORS.
Well, now that Edina has shown that yes, you can indeed refuse to send listings even to Realtor.com, that barn door is wide open. In fact, the barn itself is probably burned to a crisp.
You don’t want to pay the aggregators and think they harm your business? Well, pull the listings. Can’t come to an agreement with the aggregators through negotiations? Pull the listings. Don’t like the service you’re getting? Pull your listings. Resent the hell out of the fact that Spencer can buy his private island on the backs of your listings? Pull ’em. Just pull ’em.
You have every right to do this, and ListHub — a wholly owned subsidiary of Move, Inc. — even makes it easy for you. I assume Point2 and other syndication services also have such things.
Your MLS forcibly sends your listings to one of these guys? Well, your complaint is with the MLS then, not with those guys.
TANSTAAFL can be thought of as the summary of all of the wisdom of economists throughout all history everywhere. It stands for “There Ain’t No Such Thing As A Free Lunch“.
In syndication, TANSTAAFL represents the third path between the Howard Hanna model (Pay ‘Em) and the Edina model (Pull ‘Em). It is what so many people find objectionable about syndication.
See, the aggregators get the listings for free, and then put all sorts of ads — even that of other agents in my market — around my listing! The nerve! The horror! The dastardly devils!
True. All true. But on the other hand, the listing broker in question here also paid nothing to the aggregators to have their listings advertised to millions of potential buyers. (And as yet, no one has claimed that these sites don’t get the traffic.)
Since TANSTAAFL, somebody has to pay for all this free stuff. That somebody is the advertiser willing to fork money over to these aggregators so that they can get the leads from these listings.
OUTRAGEOUS! you say. Well, simple — go do as Edina did and pull your listings. Do not pass Go. Do not delay. Just go pull your listings from these sites. It’s easy to do and costs you no money.
“Well, I love the exposure and my sellers want it, but I can’t stand that the data sucks and there are random agent ads all over my listings.” Well, simple — go do as Howard Hanna did and enter into an actual business relationship with the aggregators.
If you’re not willing to do either one, then stop complaining. You’re getting free exposure that you haven’t paid for. Complaining that you’re getting crappy service for free strikes me as ridiculous as complaining that you’re having to listen to commercials on radio stations that you’re not paying for. Or complaining that this blog is not updated frequently as you’d like. It’s FREE. What exactly do you expect for paying zero, zilch, nada, bupkis?
“But Rob, I do pay, and I still have to deal with nonsense like X, Y, and Z.” Well, you’re a paying customer — either renegotiate the deal, or stop doing business with those entities and pull your listings. Take a page from the GoodLife Team, who decided to stop doing business with Trulia, and pulled their listings. I’m sure that Trulia would be willing to negotiate with the GoodLife Team — and anyone else who asks — the parameters of a “Howard Hanna Deal” until the exchange of value is satisfactory to both sides. If not satisfactory, then no deal, no business, and no listings.
So simple. So easy.
Recap The Solution
To recap, then, the solution to syndication is very, very simple indeed.
- Pay ’em: Go negotiate a deal with the aggregators that is mutually satisfactory; or,
- Pull ’em: Go pull your listings from sites you don’t like; or,
- Zip ’em: Recognize you’re getting free stuff and #quityerbitchin.
Since the broker has absolute copyright ownership over the listing, he can do any of the three above.
There is one small thing that you have to consider if you choose the Pull ’em strategy. That thing is mobile, and I wrote about it here:
I don’t have any privileged access to the data, but I’d bet dollars to donuts that the internal metrics over at Zillow, Trulia, and Realtor.com show that the traffic from their mobile apps are growing exponentially… at the expense of terrestrial web traffic. If any of their reps would care to confirm or deny, I’d welcome it.
So we could see a situation in the very near future that the brokers (and the MLS) will emerge victorious on the syndication front, pull all the listings from the aggregators, spend millions setting up awesome consumer facing websites, and find themselves well and truly screwed because all the traffic is going to mobile apps.
Since writing that, I have gotten some data from Realtor.com and Zillow. (Trulia has not sent me any data as of this writing, but I may get that at some point as well.)
Realtor.com tells me that year over year from April 2011 to April 2012,
- Active Users are up 113%
- LDP (Listing Detail Page) views are up 200%
- Photo views are up 384%
- Phone & Email Leads are up 133%
- The average Active User looks at 45 Listing Detail Pages and 375 photos on mobile apps.
I don’t know exactly how Realtor.com define “Active User”, but I assume it means someone who is using the app instead of just having it downloaded to the mobile device and forgetting to delete it, you know, like me.
Zillow tells me:
- Mobile is the fastest growing part of Zillow’s business.
- The majority of homes viewed are on Zillow Mobile, which means home shoppers are seeing homes more often on mobile than on the Web. Zillow’s contact data corroborates this as more than 30% of Zillow users make contact from a mobile device.
- In April 2012, 150 million homes were viewed on Zillow Mobile; compared to more than 52 million in May 2011. That’s nearly 290% growth in nearly a year.
- More than 30% of Zillow’s traffic now comes from a mobile device, on weekends it’s more than 40%.
I did ask for more trend data and the like, but… no dice on that one. The big eye-opening numbers are the 290% YOY growth on mobile, and that 30% of Zillow’s traffic now comes from mobile.
Now, Zillow reported that for Q1 of 2012, their average monthly unique visitors was a robust 31.8 million. If 30% of Zillow’s traffic comes from mobile, that means over 9.5 million people are using the Zillow App to access the listings on Zillow. (I did verify that the overwhelming percentage of mobile traffic is app traffic, not visit-zillow.com-on-my-ipad’s-safari-browser traffic.)
Realtor.com claims about 20 million monthly uniques, so if we assume that 30% of its users (like Zillow’s) use mobile apps to access listing information, we’re looking at 6 million there.
There might be some overlap there — people using both the Zillow app and the Realtor.com app — but my gut tells me there isn’t. Mobile apps aren’t really like websites — people tend to find one they like and stick to it. (For example, I don’t use both Yelp and OpenTable apps….) Throw in Trulia’s app, for which I have no info, and you’re comfortably looking at 10+ million people using mobile to get their listings fix.
So… if you’re going to take the Pull ’em approach, which is absolutely your right to do so, then… at least think about what your plan is on mobile. Caveat Non-Emptor means “Non-buyer be warned”. So by all means, pull your listings from the aggregators. It likely won’t hurt you that badly for terrestrial web (meaning, your ye olde 20-year old technology of the website) since Google exists. But mobile?
Whole different story. And 300% year over year growth is something to keep an eye on.
Conclusion: It’s Solved. Can We Move On Now?
In conclusion, then, the syndication problem has been solved. You can pay ’em, or pull ’em. And if unwilling to do either one, then you can zip ’em, since complaining about a free service you can freely stop using immediately makes you the idjit.
But if pulling listings, you are hereby warned about the growth of mobile in real estate, and urged to have some sort of plan in place for dealing with the shift in consumer behavior.
Now that we’ve solved the syndication problem, I hope the industry can move onto the next set of issues it needs to confront. Might I suggest maybe paying some attention to, oh, I don’t know… the whole foundation of American residential real estate?
You’re welcome, by the way. 🙂