Trulia makes substantial acquisition
Zillow announced its record-breaking first quarter results yesterday, and at 5 a.m. this morning, Trulia’s announcement, the planned acquisition of Market Leader (which owns ActiveRain) relegated Zillow’s news to “What, did they say something?” in agent circles. Before most of the Left Coast was even awake, real estate agents east of the Mississippi were commenting on Facebook groups and Active Rain’s blog platform about what this could mean for them — agents — and their future relationship with T and AR.
Online comments from the real estate community ranged from “who cares?” to “the sky is falling” to “they’ve sold us out.” Let’s break this news down into digestible pieces and I’ll give you my own (always opinionated, biased towards me-the-Broker) take on what this means to the real estate community.
First, let’s address the ActiveRainers
To those who are tearing at their clothes and opining the “sell out” of a beloved agent blogging platform to the “corporate raiders” — here’s a reality check: ActiveRain is a business. Sure it was started by a handful of computer geeks who developed an idea (hey, let’s get agents blogging online, talking to each other and members of their community, then we’ll leverage that into business for them), sold the idea to the masses, then sat back and watched it take off into a community of its own. As it got bigger and more successful, original founders dropped off to go on to bigger and better things.
Entrepreneurship is about thinking up an idea, selling it to users, and then many entrepreneurs sell the entire company and move on to the next idea. That’s how business works. So the argument that AR is selling users out isn’t valid from a purely business standpoint.
Where the “sell out” argument comes from is the fact that many AR users have been blogging on the platform since 2006-2009. The early adopters built a close knit community of agents (and other real estate professionals) who got to know each other and helped each other, especially through the latest downturn. Back in 2007 when I joined (the same year I opened my own brokerage), it was more an agent-to-agent platform. I found a group of like-minded professionals around the country to bounce ideas off, celebrate successes with, and drink a virtual glass of wine with at the end of a long day.
Thousands of agents built their blogging careers with ActiveRain. We learned about SEO, how to get our posts/blogs to rise up through the search engines, and dominate our local area. Hyperlocalism blogging was taught for years at AR and many agents became top producers thanks to learning how to make their blogs rank — and be read — by consumers. The theory is that by being a curator of local knowledge (not just real estate) consumers will be drawn to our sites, and by extension, we will be the go-to name when a local reader needs our services. I have sold millions of dollars worth of real esate by blogging using this technique and it works. What will happen to the great SEO that agents have built with their AR blogs? When Trulia takes over will that someone hurt our SEO and all the Google juice we’ve built up in our hyperlocal blogging efforts? Of course it will.
Now, let’s talk about Market Leader
When Market Leader entered the picture the same “sell out” cries rallied, and in the past 18 months not a heck of a lot has changed there. With the exception of a few more sales calls (which we always got from vendors) I haven’t noticed too many changes. But here’s the difference: ML was more of a software company (selling back end CRM services and trying to generate/sell leads to agents) than a consumer-facing portal. Despite their best efforts at making a consumer facing site work (RealEstate.com, acquired by Market Leader), I don’t see that’s been a huge success.
That’s where Trulia can be a game changer. As much as AR and ML are agent-focused, Trulia (and Zillow and Realtor.com) are consumer-facing sites. The bulk of their effort over the past few years has been to lure the consumer in to use their site to search for properties/find an agent. The sites are packed with “how to buy” and “how to sell” advice, listings for sale and (recently added) rent.
Here’s where I see the backlash.
These companies take the listings that agents work their tails off to get and re-sell us the very leads that our own listings generate. The sites make money by selling premium advertising to brokers/agents. While they’re courting the consumer on one hand (hey come look at all the houses for sale) they’re courting the agents/brokers out of the other side of their mouths (hey give us your money and we’ll deliver the buyers/sellers to you). They take the fruits of our labor (our listings), display them on their sites, and then charge us to find out who is interested in our inventory. See the irony? It makes me feel dirty just to admit I pay for this whorish advertising.
Not only do they make us pay for leads our inventory generates but these same sites generate “leads” with false data. How many calls do you get for “listings” that were sold six months ago or are not even on the market yet (pre-foreclosures flagged by RealtyTrac)? And my newest gripe is Trulia’s brilliant “recently sold” lead. In this one, I get an email from a consumer who wants information on a recently sold house. The theory is that maybe this lead is a neighbor thinking of selling. So if I email back the sold data maybe I’ll get a new listing.
Except in the trenches it’s not working that way. Buyers are emailing on the house, not understanding it’s sold, and they want an appointment, or wonder why it’s online if it’s not really for sale (since if it’s on the internet it must be true). Telling them it’s not for sale (such as a pre-foreclosure or a recently sold) just annoys the consumer. That’s not a “lead” — it’s a consumer who thinks I am wrong and the internet must be right. It takes up my time to convince Joe Buyer that the house really really is sold and no I cannot show it to him.
But I digress.
Agents know how bad the data can be on the aggregator sites (which is what T and Z are). T/Z argue back: garbage in/garbage out. Meaning, agents get your act together and update that data so it’s correct! Mark those houses sold, enter your status updates promptly and make sure the feed coming in is correct.
As of May 8th, my firm of 6 agents has 85 listings. Perhaps I should hire someone to check the various aggregator sites every day. Or I could cut the feed out completely. That’s the battle cry of some brave brokers who have gone that route. No feed to T/Z, then the consumer must come to our site to find the data! If you are a huge brokerage in control of the bulk of the market, that could work.
But we won’t stop the consumers from seeking out and using T/Z and their nifty little apps (and Realtor.com which in my area seems to be barely used). I ask every buyer who calls into the office who I get to speak to, every buyer I see at a closing table or in person, “Where did you find this property?” The majority are using T/Z and so if the consumer is there, we need to make sure our listings are in front of that consumer. Removing our sellers from the feed reduces their exposure and may harm their chance of sale.
What major platforms have been lacking
But what the major platforms have been lacking is agent-to-agent interaction. That is where Market Leader and ActiveRain come into play.
With ML’s back-office CRM software (already used by some firms such as Keller Williams) and the agent-centric blogging, Trulia made a brilliant play to rope the agents into their platform. I don’t question their business acumen. So why did I want to throw up this morning when I read the news release? Because instead of seeing it as a “yeah we have the whole enchilada now, in one cool place” my gut reaction was “Great, I’ll be held hostage here.” Keep reading for why I feel trapped.
Why agents feel trapped
I pay for TruliaPro status (and Zillow Premier agent as well). Up to three months ago I also paid for a half dozen zip codes in my area for my firm to dominate Trulia in my little world. I spent thousands of dollars in 2012 on Trulia upgrades. In doing the taxes I calculated the ROI on those zip codes and decided to adjust the ads. I wanted to test a few new ones and dial back a few old ones. Easy enough. For years I’ve been doing this all by myself with no “advisor” needed. Add a few cities, subtract a few. Analyze results in three months. Adjust. Except in February I realized my sliders (that control ad percentage of market purchased) were gone. I could not dial back any of my zip codes or adjust.
Trulia took away the sliders/ability to control my own ads, and didn’t even tell their tech support apparently. I had to send a screen shot of what I was seeing to my rep for him to even understand what was going on. Then he promised to call me back when he figured it out. When he did (several days later) he explained that the Powers That Be at T decided only sales reps could change/adjust our ads now as we might “screw it up” and make bad changes. Oh. That explains it. But it was too late. I had already called in, gotten a different rep, and tried to talk through the changes I wanted. The new quote was jaw dropping. The rep explained it would be much easier (and cheaper) to just stick with my old ad plan rather than play with percentages and buy/change zip codes. In reply I cancelled all my advertising.
This control-freak approach also extends to the leads they send me (the ones I pay for). The email I get anonymizes the lead’s email and replaces it with a Trulia-centered email. To get the real email I must log into T’s portal, hit reply to the lead, and then I can see the true email. It’s an extra step, which matters to me because I use a third party portal to consolodate all my leads. So when the portal gets this junky email, I still have to waste time by logging into the T website, copy/paste real email, log into my CRM portal, and replace bad email with real one. Time suck. T say it is to protect the consumer’s data. Really? I think it’s so you control one more aspect of the lead-to-agent flow and it messes with my system.
As a broker and an agent, I don’t like it
I have no problem with the T/ML/AR partnership from a business standpoint. I get it. But as an agent, I don’t like it. It’s just one more blow in the fight to the top of the search engines for these two companies. And while T and Z are duking it out for Top Dog status, it’s the agents who are in the middle getting squeezed.