Redfin flip flopping in public
Redfin recently received a round of funding that brought their total amount raised to $46 million, raised because of Redfin CEO Glenn Kelman’s ties to the tech and investing world in addition to their reputation as being “revolutionary” in the real estate industry and “transparent.” It seems the company is back to shake things up after several years of shaping itself into less of a revolution and more of an edgy real estate brokerage operating on the standard real estate team model.
Before their most recent round of funding, Kelman told GeekWire.com “If Redfin has to pay a media site for traffic, we will not be able to make real estate better,” and blogged, “The only ads we’ll pay for are the ones we show to millions of people on our own site, for free.”
In a move that the company likely hoped would not go noticed by the industry, Seattle real estate broker Marlow Harris alleges that not only has Redfin begun buying advertising but have snatched up keywords through Google Adwords to compete with brokers, at least in the Seattle market. Harris discovered that not only did the company that proclaimed they wouldn’t spend money on ads buy “Seattle Dream Homes” (the name of her company) but “Findwell” and other competitive terms.
While nothing is illegal about this and corporations do this all the time (Coke buys “Pepsi” as a keyword and Pepsi buys “Coke” as a keyword), corporations are not members of the National Association of Realtors that ascribe to a Code of Ethics for which violations can lead to revoked membership or other punishments.
Buying competitive terms
Harris told AGBeat, “While it’s not possible to tell definitively if they’ve purchased the keywords “Seattle Dream Homes”, Redfin is the only result that is consistently returned for that particular search phrase. More importantly, since they pride themselves on being so “transparent” and letting us and the press know about every little success, study, report, talking point, data change, abstraction and survey, you’d think a big new Google Adwords campaign would at least deserve a press release and a blog post by Kelman. Every other wisp of news does. Why the sudden silence, especially after making a big point in saying that they wouldn’t pay for advertising? What else has changed, what else goes hidden or unspoken?”
Realtor William Stroud of Coldwell Banker in New Mexico commented, “While using someone else’s business name in keywords or meta tags is not against Google’s terms of service, it does violate the Realtor Code of Ethics and they are members. Standard of Practice 12-10 in the Realtor Code of Ethics:
REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from: “deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers.” (Adopted 1/07)”
The bottom line
Although there is more gray areas to the concept of buying keywords of a competitor in the real estate industry than typical corporations, it does raise questions. Moreover, the story here is that the company that has repeatedly told the world that they will not buy advertisement, rather stand on their own merit as they forge ahead as the real estate “revolutionaries,” their quiet change in position has people curious about the company’s stance on transparency that they are so well known for.
The Google AdWords campaign could quietly disappear overnight, but it is surprising to see this from Redfin. Redfin has not responded to our request for comment but we will add it here if they do.
“We haven’t flip-flopped”
Redfin quickly responded to our request for comment, and strongly denies buying any trademarked terms including Findwell but notes they do invest in the phrase “homes for sale in Seattle,” further noting that the metatags on Redfin’s site does not include any competitors’ names, so there is really no Realtor Code of Ethics violations that we can see, given the complexity of Google’s algorithm that is often unknown or veiled to the public.
Kelman notes that his statement on advertising wasn’t as carefully crafted as it could have been but that it involved much more context than a simple attitude against paying to advertise.
Regarding his interview with ActiveRain alluded to above, Glenn Kelman, Redfin CEO told AGBeat that “we began spending a few thousand dollars on Google keywords. This was approximately .2% of our total spending for October, and it is a much smaller fraction of our traffic. We have tried AdWords before incidentally, and couldn’t make it work. To put this spending in context, we have spent more money giving our Boston agents iPads for field use, an initiative it hadn’t occurred to us to discuss publicly either.”