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Zillow Idea Proposal

Zillow Idea Proposal
 

Are competitive forces and social media advertising slowing Zillow’s growth?

Report Available: May 5, 2016

 

Blueshift’s ongoing research shows Zillow as a requirement for real estate professionals since buyers and sellers view it as the essential, dominant real estate website. However, real estate professionals are not as enamored with Zillow, often citing the lack of control they have over listing data posted on Z and questioning the accuracy of the information.  Competition has increased, led by Realtor.com and numerous social media options capturing more and more realtor ad dollars.

 

Observations

  1. Z’s 2015 revenue was 18% higher than the previous year, in-line with expectations, with a 7% increase in the fourth quarter. Traffic in its Q4 averaged almost 124 million monthly unique visitors, which comScore rates at nearly 60% of the category, twice that of the nearest competitor. 69% of new advertising sales in Q4 came from existing agents buying more impressions. Average monthly revenue per advertiser grew 29% in Q4, which was 9% higher sequentially. The number of premier agents, realtors spending more than $5,000 per month on Z, grew by 62% in Q4, up 5% sequentially.
  2. Z continues to expand its relationship with multiple listing services (MLSs) through the Zillow Partnership Platform and Retsly, a software company owned by Z that collects and standardizes real estate data from multiple listing services (MLSs). Z now has direct relationships with over 400 MLSs.
  3. The National Association of REALTORS 2016 Home Buyers and Sellers Generational Trends Report published in March 2016 revealed that among nearly all generations of home buyers, the first step taken is to look online for properties. 38% of buyers 35 and younger, 43% aged 36 to 50, 47% aged 51 to 60, and 53% of buyers aged 61 to 69 initially looked online for properties.
  4. This continued growth of online searches for home buying has competitors evolving and expanding. NWS’ com reported 40% year-to-year growth in 2015, topping out at 48 million unique users in the month of July, the industry’s peak month. (By comparison, Z peaked at 150 million in July). In January 2016, Realtor.com grew to 50 million unique users. Facebook’s leading provider of real estate apps recently launched a new home search app, changed its corporate name, and is rebranding as HomeASAP LLC. The company’s flagship product is the 447,000+ member Real Estate Agent Directory, however it also offers real estate related social medial solutions under the following brand names: Homeasap, Search Alliance, PageEngage, DreamSweeps, and TurnKeySuite.
  5. Blueshift’s 5 report update found that the high ROI provided to real estate agents using social media platforms for branding and marketing of homes was causing them to take their eyes off of Z. Despite this, buyers and sellers still view Z as the go-to website and they expect to find their property listed and/or to shop for their new home on the site. Our July 23, 2015, report found Z attracting more real estate brokers’ advertising dollars due to its appeal to consumers and near-term lack of alternatives aside from  Realtor.com. Industry perception of Realtor.com had improved and realtors were becoming savvier about using targeted marketing, including on FB. In our Oct. 30. 2015 report update, real estate broker sources continued to advertise and post listings with Z due to consumer-driven demand despite their mixed view of Z. Brokers still voiced opposition to the lack of control they have over listing data posted on Z. Two of our MLS sources believed Realtor.com gained market share of realtor advertising dollars throughout the year.

 

Is Z losing support and advertising dollars from real estate professionals? Will Z continue to grow its premier agent base? Is Realtor.com putting any more competitive pressure on Z? Are social media sites/apps pulling any meaningful business from Z? Does Z still dominate with buyers/sellers or is the growth of alternatives cutting into Z’s stranglehold on the market? To answer these and other questions, Blueshift will gather data and issue a market research report from Real estate professionals and MLS executives.

 

Companies: Zillow (Z), Facebook (FB), News Corp. (NWS)

 

Research Begins: April 18, 2016