Comments on: What the Subprime Mess Means for Real Estate 2.0 http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/ Just another WordPress weblog Tue, 20 Dec 2011 02:38:39 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Cease and desist | 1000Watt Consulting http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3913 Cease and desist | 1000Watt Consulting Tue, 24 Mar 2009 20:16:16 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3913 [...] business plans that rely exclusively on ad revenue. If you are banking on this puppy read this, "what the subprime mess means for real estate 2.0" then this "how mortgage collapse could wallop [...] [...] business plans that rely exclusively on ad revenue. If you are banking on this puppy read this, "what the subprime mess means for real estate 2.0" then this "how mortgage collapse could wallop [...]

]]> By: Jonathan Cardella http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3912 Jonathan Cardella Thu, 20 Dec 2007 15:04:29 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3912 First off, online advertising is dynamic and many decisions to purchase (more inventory) or cut back on spend, can be made in near real time. Meaning, as a veteran online advertiser, if I am not seeing conversion rates that provide ROI and justify my spend, if I am doing my job, I will cut my spend and reallocate it to more productive buys or just hold off and save my budget for a more friendly environment. If (sales) conversion is dropping, I am not increasing my spend like Rich suggested. Furthermore, while the online advertising industry as a whole may very well see an increase proportionate to offline advertising during a market slump, as current, the reallocated online ad spend is normally dedicated to performance based advertising such as pay per click, search engine optimization (a medium to long term investment that should produce ongoing returns), email marketing, etc. What is normally cut first is impressioned based marketing since it requires an upfront commitment of capital on a fixed cost basis such as CPM based advertising. This is exactly Zillow's model, to charge $10 per CPM or $100 per 10,000 impressions, as stated on their website, regardless of the result. The actual CPM rate is normally derived as a function of the quality of traffic, how targeted the ad is, how likely it is to convert, etc. In the case of Zillow, you can target customers in certain zip codes. In my book, that doesn't mean the ad is targeted to my listings which often only appeal to a very finite cross section of the users searching for that given zip code. Targeted to me means being able to target a certain demographic, people searching for a certain price range, users searching with certain keywords, or home search profiles, etc. I have not seen any type of advanced targeting at Zillow or other 2.0 startups, nor have I seen anything that even resembles performance based marketing. Relatively untargeted (Zip Code) CPM based advertising better resembles ROI for traditional offline media buys than it does search based advertising. In a downturn such as this, IMO the main web based advertisers that are positioned to gain are the big players such as Google Ad Words and Yahoo! Search (PPC), once the agent figures out how to use them. As do "free" mediums such as Blogging and SEO. Finally, people who show up at Zillow are curious about their home's value more so than they are looking to find a home to purchase or an agent to represent them. You have to evaluate the quality of the user base carefully when making untargeted CPM based buys and Zillow has not demonstrated that quality yet. In short, don't expect Zillow or Trulia to thrive in this environment. First off, online advertising is dynamic and many decisions to purchase (more inventory) or cut back on spend, can be made in near real time. Meaning, as a veteran online advertiser, if I am not seeing conversion rates that provide ROI and justify my spend, if I am doing my job, I will cut my spend and reallocate it to more productive buys or just hold off and save my budget for a more friendly environment. If (sales) conversion is dropping, I am not increasing my spend like Rich suggested.

Furthermore, while the online advertising industry as a whole may very well see an increase proportionate to offline advertising during a market slump, as current, the reallocated online ad spend is normally dedicated to performance based advertising such as pay per click, search engine optimization (a medium to long term investment that should produce ongoing returns), email marketing, etc.

What is normally cut first is impressioned based marketing since it requires an upfront commitment of capital on a fixed cost basis such as CPM based advertising. This is exactly Zillow’s model, to charge $10 per CPM or $100 per 10,000 impressions, as stated on their website, regardless of the result.

The actual CPM rate is normally derived as a function of the quality of traffic, how targeted the ad is, how likely it is to convert, etc. In the case of Zillow, you can target customers in certain zip codes. In my book, that doesn’t mean the ad is targeted to my listings which often only appeal to a very finite cross section of the users searching for that given zip code.

Targeted to me means being able to target a certain demographic, people searching for a certain price range, users searching with certain keywords, or home search profiles, etc.

I have not seen any type of advanced targeting at Zillow or other 2.0 startups, nor have I seen anything that even resembles performance based marketing. Relatively untargeted (Zip Code) CPM based advertising better resembles ROI for traditional offline media buys than it does search based advertising.

In a downturn such as this, IMO the main web based advertisers that are positioned to gain are the big players such as Google Ad Words and Yahoo! Search (PPC), once the agent figures out how to use them. As do “free” mediums such as Blogging and SEO.

Finally, people who show up at Zillow are curious about their home’s value more so than they are looking to find a home to purchase or an agent to represent them. You have to evaluate the quality of the user base carefully when making untargeted CPM based buys and Zillow has not demonstrated that quality yet. In short, don’t expect Zillow or Trulia to thrive in this environment.

]]> By: Storms Ahead for Real Estate Sites | Future of Real Estate Marketing http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3911 Storms Ahead for Real Estate Sites | Future of Real Estate Marketing Thu, 13 Sep 2007 19:52:55 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3911 [...] to have an impact on advertising spending. I’ve been saying the same thing for a while (see What the Subprime Mess Means for Real Estate 2.0) [...] [...] to have an impact on advertising spending. I’ve been saying the same thing for a while (see What the Subprime Mess Means for Real Estate 2.0) [...]

]]> By: Inman News Blog: Subprime mess beyond the borrowers http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3910 Inman News Blog: Subprime mess beyond the borrowers Tue, 04 Sep 2007 23:45:19 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3910 <!--%kramer-ref-pre%-->[...] The Hype on Mortgage Meltdown's Online Ad Impact (MediaPost)--What the Subprime Mess Means for Real Estate 2.0 (Future of Real Estate Marketing)--LowerMyBills Lowers Its Ad Bill (NY [...]<!--%kramer-ref-post%--> [...] The Hype on Mortgage Meltdown’s Online Ad Impact (MediaPost)–What the Subprime Mess Means for Real Estate 2.0 (Future of Real Estate Marketing)–LowerMyBills Lowers Its Ad Bill (NY [...]

]]> By: Kansas City Real Estate Agent http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3909 Kansas City Real Estate Agent Tue, 04 Sep 2007 13:21:47 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3909 I wouldn't spend any more or less than you had planned to spend when you set your business plan. Now that's not to say you shouldn't spend more or less if your next business plan calls for it. But making knee jerk reactions is never a good idea. Have a solid business plan and follow it. I wouldn’t spend any more or less than you had planned to spend when you set your business plan. Now that’s not to say you shouldn’t spend more or less if your next business plan calls for it. But making knee jerk reactions is never a good idea. Have a solid business plan and follow it.

]]> By: John Schroeder http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3908 John Schroeder Tue, 04 Sep 2007 12:39:06 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3908 I agree with the theory of increasing spending when business is slower. Most of your competition will decrease their spending. True more dollars will continue to shift online. Where online is the key. Re-evaluating our ROI from different advertising sources is going to be key. It's easy...just be where the buyers and sellers are. I agree with the theory of increasing spending when business is slower. Most of your competition will decrease their spending. True more dollars will continue to shift online. Where online is the key. Re-evaluating our ROI from different advertising sources is going to be key. It’s easy…just be where the buyers and sellers are.

]]> By: Ryan http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3906 Ryan Mon, 03 Sep 2007 03:37:18 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3906 Much of this may be true in the residential marketplace. However, in the land for sale marketplace we (www.landflip.com) are seeing a surge in new customers looking for a more effective and lower cost to advertising. In fact, we are boosting our ad spending. http://www.prweb.com/releases/real-estate/land-for-sale/prweb549396.htm Much of this may be true in the residential marketplace. However, in the land for sale marketplace we (www.landflip.com) are seeing a surge in new customers looking for a more effective and lower cost to advertising. In fact, we are boosting our ad spending. http://www.prweb.com/releases/real-estate/land-for-sale/prweb549396.htm

]]> By: Louis Cammarosano http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3905 Louis Cammarosano Sat, 01 Sep 2007 02:26:23 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3905 Nice to see that reality is setting in. Drawing a million or three visitors that just want to look up the inaccurate estimated price of a home generated by an algorithm that more than a half a dozen companies also offer (Zillow) or showing an incomplete set of listings supplemented by heat maps (Trulia) and trying to make money selling a few ads is not a sustainable business model. Web 2.0 is hype along the lines of the dot com bust. Interesting that the VC's which are supposed to be smart money don't catch on earlier..... Nice to see that reality is setting in. Drawing a million or three visitors that just want to look up the inaccurate estimated price of a home generated by an algorithm that more than a half a dozen companies also offer (Zillow) or showing an incomplete set of listings supplemented by heat maps (Trulia) and trying to make money selling a few ads is not a sustainable business model.

Web 2.0 is hype along the lines of the dot com bust. Interesting that the VC’s which are supposed to be smart money don’t catch on earlier…..

]]> By: Friday File – The Bright Spots of the Week in Real Estate Blogging | Future of Real Estate and Loans http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3904 Friday File – The Bright Spots of the Week in Real Estate Blogging | Future of Real Estate and Loans Fri, 31 Aug 2007 16:46:28 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3904 [...] Will Real Estate 2.0 Suffer From Subprime Woes? [...] [...] Will Real Estate 2.0 Suffer From Subprime Woes? [...]

]]> By: Rebecca Levinson http://www.futureofrealestatemarketing.com/2007/08/28/what-the-subprime-mess-means-for-real-estate-20/comment-page-1/#comment-3903 Rebecca Levinson Thu, 30 Aug 2007 04:12:07 +0000 http://www.futureofrealestatemarketing.com/what-the-subprime-mess-means-for-real-estate-20#comment-3903 Those companies in the real estate "2.0" space who jumped in to make a quick buck, or didn't have a more long term strategy might be in a bit of trouble. Just as many agents flooded the industry when times were good, so did these companies. The current tide will weed out those who are in it to win it from those who got in it to shortcut the race. And you speak of Real Estate 2.0, but I don't see all that much happening yet, when you consider that not even all real estate agents have their own real estate website (I am dismissing a template off their company website), let alone a blog or any form of social media, there is enough room for growth and profit for those willing to do it right. Rebecca D. Levinson- http://www.connect2agent.com Those companies in the real estate “2.0″ space who jumped in to make a quick buck, or didn’t have a more long term strategy might be in a bit of trouble. Just as many agents flooded the industry when times were good, so did these companies. The current tide will weed out those who are in it to win it from those who got in it to shortcut the race. And you speak of Real Estate 2.0, but I don’t see all that much happening yet, when you consider that not even all real estate agents have their own real estate website (I am dismissing a template off their company website), let alone a blog or any form of social media, there is enough room for growth and profit for those willing to do it right.

Rebecca D. Levinson- http://www.connect2agent.com

]]>