Over the years, I have listened to all of the noise related to the fear, hate and resentment of the portals, and I tried to think back to residential real estate before the portals. Those years certainly should have represented much better times considering all the bad the portals reportedly represent today.
And here is what I recall.
The good old days
Sellers hammered me to see their listing in the newspaper — the good old newspaper. A variety of media that was distributed to those in the local market who paid for access to news.
There were no free newspapers. Back then, you could also find a job, a car or a house in the back section of the paper. And there were never any free ads. If you advertised, you had to pay to play.
Anyone interested in capturing the paid audience of the newspaper was required to purchase ads in the paper. And those ads were purchased based upon placement in the paper and space in newsprint.
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And then there was the issue of advertising open houses.
You guessed it; the newspaper was the venue. And once again, the newspapers did what they did best — they took the “r” out of “free.” If you wanted to advertise an open house, you paid for the ad.
From newspapers to magazines
Then came the industry revolt. Newspapers, begone!
So real estate magazines evolved to hedge the usurious cost and limited distribution of the newspapers. But once again, the fee issue evolved with the magazines.
Yes, they were now free to the consumer — and yes, the industry had to pay for the ads. The distribution was terrible. Copies were tucked into “pockets,” and magazine racks placed in shopping malls and stores.
But wait; there’s more.
Brokers decided that they would publish their own magazines, and that would fix the problem. So they partnered with publishers to produce a private magazine for a brokerage firm. Even the MLSs got into this game of publishing magazines for an entire MLS of brokers and agents.
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Then the sellers screamed, loud and clear: “Hey, our property information isn’t current in the magazines or the newspaper.”
Well, of course, the data wasn’t current. The timelines for a deadline to print to distribution were not instant, and in many cases, they involved as much as a week from ad submission to publication distribution.
And as an industry, we funded this lovely print media play with more than $10 billion in ad revenue annually. Ouch.
But wait — there’s more.
Serving the competition
The only thing that we didn’t have back then was an IDX-fed (Internet data exchange-fed) print publication. Think about it.
No broker was allowed to advertise another broker’s listings in their print ads or publications, and that was quite possibly the only real plus for the industry in the era of print advertising.
If you had no listings, you had nothing to advertise. And those brokers that had the most listings had the biggest ads and those ads generated leads only for the listing broker.
Then along came the Internet. Notice I said the Internet came first — not the portals. The portals represented what could be done using the technology to power the media and as a means to improve the consumer’s real estate experience for both sellers and buyers.
What we forget is that it was the onset of the Internet that fundamentally changed the rules in advertising. It was the industry that, in my opinion, foolishly accepted and adopted such things as IDX and VOW (virtual office website) within the MLS environment.
We were the ones who agreed to allow anyone who joined the MLS to sell our product both offline — and now online, too. We did not fully realize the impact of that decision, and that is truly what plagues and neuters the competitive landscape of our industry today.
Leveling the playing field
The Internet reduced the cost to advertise listings to zero and then enabled any broker — with listings of their own or not — to advertise all of the listings in an IDX feed on their website.
Game-changer? Yes, but not the rules that foster and nourish a competitive business environment. These rules established and administered by the National Association of Realtors (NAR) and the MLS served to level the competitive playing field for every broker — long before the portals were even imagined. Don’t forget this important fact.
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With that said, finally, here come the portals.
Remember the newspapers? Local listings displayed in print to local subscribers? That might have been OK for the sellers, but it was not good enough for the buyers.
The buyers couldn’t care less about a local broker’s disintegrated local ads in newspapers and magazines. They wanted to see all the listings everywhere, and they could care less about the industry data issues brought about by an excessive 900-plus MLSs.
Even NAR figured this one out — and that in itself is amazing.
So very smartly, realtor.com moved to aggregate all of the listings from all the MLSs into one place for buyers to shop them — and presto, Homestore was born. And more importantly, the single common marketplace for listings was born for buyers.
You see, it wasn’t the cost of print or even the portals themselves that caused the change; it was the demand from the buyers who did it. Consumers were demanding more, and someone answered that cry for help — intelligent. The rest of the story just happened.
So now fast forward.
Seller evolution
The sellers evolved, too. Or, at least, the majority of them have. The ways the industry advertised were old and limited, while the portals provided a means to shop for a property that was much preferred by the buyers.
Millions and millions of them appeared in one place, on the portals. So, despite the industry’s frustration with the portal advertising strategies the sellers simply said, “put my listing there,” to brokers.
And the industry said?
Oh no — not that! How much will it cost me? The portals — all of them from day one until present day said — for listing brokers the basic display ads that previously cost you tens of thousands of dollars a year as a single regional brokerage, are now free.
It was the real estate portals that put the “r” back in the “fee” that the print media companies had created. Thanks to the portals, real estate advertising changed forever.
To this day, the newspapers and the magazines are still riding the dead horse that demands a fee in return for advertising listings, and the only good use of that print is to protect the floor when puppies are learning what they should and shouldn’t do in the home.
So the industry applauded the portals and warmly welcomed them to the industry value-chain, right? Wrong!
From the day the portals entered the business, the industry has screamed “death to the portals.” Now the industry talks of creating a hedge on the portals with their own public portal.
Really? I don’t know about you, but this sounds an awful lot like what happened with the migration from the newspapers to the magazines. Out of the frying pan and into the fire we go.
Next steps
So, I have a few ideas for the brokerage industry surrounding this topic of the portals. Here they are:
- Consider the ludicrous nature of the existence of the current IDX/VOW feeds. Get rid of the ability you are currently providing for a direct competitor of yours — as in someone right down the street who might have no listings — by giving them the ability to sell your inventory by simply joining the MLS for a 50 percent revenue split. That is crazy.
- Stop biting the portal’s hand that feeds you leads and charges you nothing for the lead generation. If you want to change the portal ad model, then just buy all the agent ads around your listings.
- If you don’t want the portals to offer the consumer an online digital transaction, then do it yourself. Start advertising that capability in your local market now.
- If you find yourself hating something someone else is doing to disintermediate your business, just do it yourself. Consumers will go where they can find what they want and need — period. It might as well be to you.
- Break away from the herd and embrace what your competitors fear or scorn. Trumpet your support for the portals to assure that you keep sellers happy at no cost, and so you can reach potential buyers both nationally and locally.
- Think consumer, not a generation of consumer. My 86-year-old mother lives on her iPad. It’s not about doing things that could attract Generation X. It’s about attracting smart consumers of all ages and all generations.
When all of this is boiled down, it’s not about what is wrong or even what is right with the portals. It’s about the lack of thinking ahead of the competition that we suffer from in this business.
The issues we face today are challenging our business from inside and outside the industry. Both forces look for things to do for the consumer that we will not provide, and they simply do it — on steroids.
Even if you continue to think that the portals are the real problem and they need to go, or it is the MLS or even NAR or whoever — you need to do only one thing to succeed in today’s market. Find out now what is trending with consumers, what they need, and do something that satisfies their needs and wants for tomorrow — right now.
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So my closing question for you as it relates to success is only this one: What’s up with you?
Kenneth Jenny is an expert in the residential real estate brokerage industry and real estate marketing.