From time to time, two separate but somewhat related zeitgeist memes cross like the positronic streams in "Ghostbuster" and cause a big to-do of sorts. This week, Marc Davison of 1000watt Consulting wrote about social media snake oil salespeople: "The snake oil of waves of social media gurus in real estate is truly well greased. It’s time to stop being so gullible and clutching at straws."
Marc was referencing a BusinessWeek article warning people about "social media consultants." The subhead of that story is: "Hordes of marketing ‘experts’ are promoting the value of wikis, social networks, and blogs. All the hype may obscure the real potential of these online tools." Interesting.
Later, Jeff Turner, a respected commentator on things technology and real estate, tweeted: "Mobile is the next frontier for brand engagement."
Jeff was pointing to a post by Brian Solis of PR 2.0 on using iPhone Apps for brand engagement. Maybe it was the BusinessWeek article, and maybe it was the discussion that Davison sparked about what is and is not social media snake oil, and maybe it was the discussion I had with Matthew Shadbolt, the Director of Marketing for Corcoran (who had just released an iPhone App) … but I got some questions.
Mobile, social media face the same questions
Since Brian Solis, the author of the post on mobile apps, is also an authority on social media — one might even tar-and-feather him with the dreaded "social media guru" tag — it seemed to me that his thoughts on mobile are subject to the same criticism that BusinesWeek levels at social media consultants: Where’s the beef?
The BusinessWeek article criticizes social media for its emphasis on internal measures that frankly don’t mean anything to businesses: "Over the past five years, an entire industry of consultants has arisen to help companies navigate the world of social networks, blogs, and wikis.
"The self-proclaimed experts range from legions of wannabes, many of them refugees from the real estate bust, to industry superstars … The consultants evangelize the transformative power of social media and often cast themselves as triumphant case studies of successful networking and self-branding."
The article goes on to state, "The problem, according to a growing chorus of critics, is that many would-be guides are leading clients astray … and success is defined more often by numbers of Twitter followers, blog mentions, or YouTube hits than by traditional measures, such as return on investment."
Well, Brian Solis writes in his post on mobile (regarding Volkswagen’s iPhone App): "Most recently, Volkswagen opted out of a traditional marketing and advertising campaign when planning the debut of its 2010 GTI and instead funneled talent, resources, and dollars toward the development and distribution of a slick, interactive and stylish iPhone app with the new car at the center of the experience.
"Many industry experts considered the move either visionary or foolhardy. The point is that it realized that its target customers were most likely among the millions of iPhone customers actively seeking cool apps."
He cited an AdAge article, published in October 2009, which noted that Volkswagen of America was announcing the launch of its latest GTI via an iPhone app: a "Real Racing GTI" game for the iPhone and iPod Touch that includes a virtual showroom. …CONTINUED
AdAge reported, "When the company introduced the GTI in 2006, it spent $60 million on a big-budget blitz with lots of network TV ads. By comparison, an executive familiar with the matter estimates the annual budget for mobile (advertising) services is $500,000.
AdAge also reported that there are more than 50 million iPhone and iPod Touch customers worldwide. Meanwhile, CBS’ "NCIS" fetches about $130,000 for a 30-second ad, and that show has about 21 million viewers.
For me, the problem is the same. Social media too often defines success by "buzz metrics." The iPhone app too often defines success by "buzz metrics" and justifies the investment, comparing the cost of app development to traditional advertising. In both cases, the methods are measuring "inputs" rather than "outputs."
If I’m Volkswagen, I’d much rather spend $1.3 million on 10 30-second spots on "NCIS" and get a $50 million bump in sales results than spend $500,000 on an iPhone app and see no bump in actual car sales.
It ain’t the inputs that matter, but the results. And the only results a business really cares about are either the top-line results (more revenues) or the bottom-line (cost savings equal more profits).
As far as I can tell, there are numerous companies making millions selling apps for the iPhone, but they tend to be folks selling games for $4.99 or some such. One would think that online retailers like Amazon are probably making money on their apps, but I haven’t seen any numbers.
What is the result in real estate?
As we head into 2010, there have been a number of mobile initiatives and even iPhone apps developed by and for the real estate industry. The most famous is perhaps the Zillow app, but Trulia has an app, and now individual brokerages such as Corcoran are creating iPhone apps.
The Zillow app has been available since April 2009, and over 15,000 people downloaded it in the first day of release. Zillow reports that the app has been downloaded over 800,000 times.
If anyone should have real metrics for the impact of an iPhone app on real estate, one would think it would be Zillow. I understand that Zillow can track click-throughs that originate from the app, and can also track ad views on the App, so there’s definitely some sort of return on investment that can be measured.
Hopefully, Zillow will reveal some tidbits to show us how impactful an iPhone app really is in the business of buying and selling real estate.
Trulia made a splash with its implementation of Layar, the augmented reality iPhone/Android app. And as the announcement headline says, "Wow, that is so cool!" But that was August — by the end of 2009, I rather think we should see, "Wow, we’re making mad dollars on Layar!" …CONTINUED
Skepticism rears its head
In any event, I am skeptical about the impact of mobile on real estate, at least as far as a consumer application goes, because mobile has been the "next big thing" for about as long as I can remember.
From my first day in real estate sometime in 2003, I was hearing about how the browser is so 20th century, and how the mobile phone and SMS and so on was the future. Dozens of companies promising to leverage the mobile platform for marketing properties directly to consumers have come and gone.
Trulia and Zillow came out and rocked the real estate world, and one tech personality in real estate told me, basically, that those guys were dealing with yesterday’s platform and that mobile was the future.
Mobile is the eternal "next big thing" in real estate — a tantalizing mirage promising untold riches that appear to be right over the next sand dune — until you get there and … oh, it’s right over that hill.
IPhone appears to me to be just the latest in a series of mirages for how consumers will use their mobile handheld computing devices to look for real estate. The next one may be the Droid, or the Apple Tablet, or the Kindle, or … whatever is next.
One big reason for the skepticism is that I believe the mobile fanatics ignore a fundamental reality about American consumers. There is a huge difference between the "walking lifestyle" and the "driving lifestyle," and the latter does not lend itself easily to any mobile device strategy.
Put another way, mobile real estate is urban real estate, because only in relatively dense urban areas do you find consumers walking around neighborhoods with any degree of frequency. Layar, as cool as it might be, is simply a waste of time in a place like Millburn, N.J., where I live. The downtown is one street corner, and the houses are tucked away in suburban streets far from where anyone might go walking around.
A company like Corcoran, a Manhattan-based brokerage, might see enormous success with mobile apps — their consumers are urbanites who walk around everywhere and carry their iPhones with them. But even Corcoran might find its iPhone app less than useful for its Florida branch, or its Hamptons branch.
While more and more Americans are moving to cities, with 85 million of 281 million Americans in the 2000 Census reported as living in a "central city," the number of cities that have truly embraced a walking lifestyle are rather few.
Yes, Houston is a metropolis, as is Dallas and Los Angeles — but those residents are drivers rather than walkers. Charlotte is a big city, but I can’t imagine living there without a car. When you get right down to it, there simply aren’t that many cities in the United States where the residents are walkers: New York, San Francisco, Chicago, Austin … maybe Portland and Seattle to some extent?
As long as the divide between the walking lifestyle and the driving lifestyle exists, mobile will forever be the next big thing … just around the corner.
And, like social media, mobile will need to start showing something more than buzz metrics. Don’t tell me how great social media or mobile tech is, and how successful my real estate business will be with social media or mobile tech: show me the money.
Be the "ambassador of Quan" (to borrow a line from "Jerry Maguire").
Robert Hahn is managing partner of 7DS Associates, a marketing, technology and strategy consultancy focusing on the real estate industry. He is also founder of The Notorious R.O.B. blog. You can reach him on Twitter at @robhahn.
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