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Zillow Idea Proposal (Z, ZG)

Zillow Idea Proposal (Z, ZG)
 

Will Premier Agent spending continue to drive growth for Zillow in 2017?

Report Available: March 29, 2017

 

Blueshift’s initial research shows Z winning the battle for consumer visits to their websites and continuing to attract real estate agents to their Premier Agent program, where they are willing to consistently increase their advertising spending. Headwinds that could challenge Z’s success include the company’s advertising policies and pricing, and a possible boycott by New York City Realtors who are upset with StreetEasy’s Premier Agent feature.

 

Observations

  1. Z and its Trulia brand continue to dominate the real estate online search landscape and are recognized as the home and apartment search website of choice.
  2. Z posted a strong financial and operational performance in Q4 with record revenues up 34% year to year, beating Wall Street expectations. Full year revenue climbed 31% year to year. A key accomplishment in the quarter was the rollout of a self-serve auction-based pricing platform for Premier Agent advertisers. The company also stated its goal of exceeding $1 billion in revenue in 2017, while growing its audience, customer engagement, and Premier Agent advertising.
  3. New York City Realtors are considering a boycott of StreetEasy’s Premier Agent pricing strategy, which was introduced March 1. This connects homebuyers with agents who buy advertising on Z’s listing pages, and has been met with resistance from brokers who are concerned that those holding the exclusive listing will be forced to split the commission with the Premier Agent. This is also leading to the push for a new listing service to combat StreetEasy.
  4. Blueshift’s Sept. 22, 2016, report found that Z would maintain its market leading position, but be challenged to maintain its average revenue per account growth rate. Sources consider Z the dominant real estate online platform. This supports Blueshift’s May 6, 2016, report in which sources said competitors would not slow Z’s growth and that the company was enhancing its relationships with its top agents. Many sources said a Z presence is a must-have for established agents to ensure continued success and is considered an industry tool that cannot be ignored. However, they said Z is too expensive for new agents, and that many of its policies and practices should be improved.

 

What is the trend with Premier Agent spending on Z? What are the trends with Z’s average revenue per account? How is Z’s new dynamic auction advertising pricing being received? How will the new pricing model perform? What effect will any agent pushback against Z have? Can Z achieve $1 billion in sales in 2017? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Zillow premier agents and brokers, and Real estate agency executives.

 

Companies: Zillow (Z/ZG), Facebook (FB), Google (GOOG/GOOGL), News Corp. (NWS/NWSA), Twitter (TWTR)

 

Research Begins: March 13, 2017