One only has to understand the way Google works to understand why real estate will play a major role in the future of this company.
Google has made it clear that of a consumer or company wants to access information – they want to have the products and services that you use to get this information. Google traditionally do not charge the companies for providing this information as they make their considerable revenues by charging companies who want to advertise alongside this information.
Google Base started out as a tool more or less because of the popularity of craigslist.com, which today is remarkably popular more so because so many people are just so accustomed to the way it works in America.
Google has now realised just how popular ‘real estate’ has become in classified advertising and a decision has always been imminent in relation to how they will handle this data and make it available to consumers.
Today in America when you search Google for real estate we are seeing some initiatives which will surely be rolled out country by country in the coming months/years.
The idea is that instead of building a new website for real estate searching (which I am betting they do in the future) they are bringing property data results into the actual search results and allowing the consumer to refine their searches by listing type and suburbs and then retrieve those results within the main search engine.
This is an official press release from Google
Uploading Options
This site gives you/developers all the information you need to get ready for this in Australia. It will nearly be exactly the same as the US version, so it is a great primer.
Listing Removal Tools.
If there is one thing that many of the new entrants into the market have had to understand it is the idea of agents having to email/call you to remove listings gets a new entrant offside with agents more quicker than a ‘fake dawn service’. Google have already thought of this and have provided the tools needed to do this.
Google’s Stance
“We believe that buyers just want to see the home that fits them best and that providers shouldn’t have to pay to show it to them. We don’t sell houses, deal with agents’ compensation, or charge for leads. Our business is helping people find the information they’re looking for—when you have it, we send them directly to you.”
Another quote that I like and have been saying for years is “We don’t charge for photos or offer “featured listings.” We believe that buyers just want to see the home that fits them best and that providers shouldn’t have to pay to show it to them. We don’t sell houses, deal with agents’ compensation, or charge for leads. Our business is helping people find the information they’re looking for-when you have it, we send them directly to you.”
I wonder who these comments are directed at?
The Old Way
Traditionally real estate portals have charged both ways. In the first instance they have charged real estate agents to advertise their properties on their real estate portals. In the two major cases with REA and Domain prices have risen by up to 400% in the past 7 years for agents to provide this data.
Once they became popular they started adding different types of listings such as featured properties and premium/platinum listings. This may mean a property gets more visits but does it mean it sells more listings? I doubt it. If a person wants to buy in Bronte they just do not look at the first page.
In the second instance once these portals have the agents property data and they have built a large consumer following they have then charged companies such as banks, insurance companies, property monitors to have their ads appear alongside agents listings.
Google’s entrance into this market will change all of this, prices will drop, but only when portals are forced to do this and this will have a direct correlation to how many agents have their sites or systems set up to take advantage of this. The incumbent portals now own or have relationships with the systems that feed this data and it will be interesting to see how quickly they implement these agents feeds.
More Importantly
The most important things for agents to do today is to make sure they have their websites and systems set up to have all of their property data indexed when this service launches in Australia and New Zealand. I have been a strong advocate of agents controlling their own destiny by making sure that their own websites are ready for this so that when this launches their own websites will directly benefit.
If the same property is listed on yoursite/portals then Google will give the user a choice between which link they would like to follow to view the full property details.
Partnerships
I would be surprised if Google played any favourites and I doubt even the muscle of News Ltd could stop or partner with Google Base. However, if Google enter this space you can be sure that Yahoo and MSN also do the same and you could argue that MyHome is well positioned if this was to occur as it is part owned by Microsoft.
This will place further pressure on REA and Domain, not so much in the short term but I do not think it is a long way off that we will start to see price hike freezes and possibly price drops.
If Google announced a separate search engine for real estate in Australia then this would be a huge blow to the incumbents and they would need to prove their relevance going forward and that means a complete re-think of the their online strategies.
3rd party advertisers such as bank would jump straight into the Google Real Estate search engine and this would also hit the incumbents pockets and I dare say share price.
Finally
Soon I will not need to spray muesli at my screen when Google announced that they are indeed the ‘Google of Real Estate’. This is by no means the end of real estate portals but they will have to evolve to stay relevant. REA and Domain have proven that they can do it by building great online businesses, the next 5 years will truly test them to see whether or not they can stand the test of time and continue to be relevant
The wonderful thing about the Internet is that it is an open platform and unlike traditional media where consumers have little choices in many areas of Australia, the Internet yet again shows that you cannot own a medium you have no control over. Consumers are the judges and they can be a fickle crowd as many have found out recently.
Here are some very interesting links in relation to this article
Intuition Fuel
Future of Real Estate
Marketing
Online Journal and here.
Google
Tools for Real Estate Professionals
38 Comments
Glenn
[from previous post and moved here]
Google has expanded on their Real Estate offering in the states quite dramatically over the past few days. Whilst it still resides inside Google Base for the moment, it is getting its own special treatment.
I have discussed the details with Peter and I know he is waiting for a response from Google before posting an article for everyone on it so expect more details very soon.
The killer feature that will make it all work is that the Real Estate Google Base will be integrated into the normal web search. What this means is that if you search for
Glenn
Great Post… !!!
Adam
I just put a sell order on my REA shares.
Glenn
If they announce a release in Australia, I think many many people will join you.
Jason Wier
Thanks again Peter,
It is so refreshing to read real estate technology articles that have no bias.
I wish more house sellers understood just how significant the wastage of advertising in the print media has become.
I think Googles entry will also go a long way to cleaning up the presence of far too many “dodgy” DIY home sale sites.
There will also be some very interesting times ahead for the current dominant real estate portals – I cant wait to read your updates.
Take Care,
Robert Simeon
Great post Peter – those a4 batteries work wonders.
I guess the only thing left is to work out which format they will use and will it be a portal or a search engine ? Are we to assume that it will roll out using beta ?
As Glenn said ” The killer feature that will make it all work is that the Real Estate Google Base will be integrated into the normal web search. What this means is that if you search for
Glenn
Robert,
Unfortunately, we cannot bring up a result and see it for ourselves because it detects us as being in Australia, but you can check out some of the links that Peter provided and they have screen shots.
It basically inserts a little property control panel above the normal search results. For those people that do not want to see actual property but were looking for agents sites it is pretty unobtrusive however if you were looking for property in a click or two you can be viewing actual property for sale (or rent). Once they use this panel is whey they are provided the
There are other triggers for this not just using the word real estate, such as New York Homes For Sale etc etc..
This will be the killer feature because millions upon millions of people will be exposed to these listings doing exactly what they have done on the web before without every going anywhere near Google Base. They are leveraging their search engines success into this new product perfectly in my opinion.
I agree with you on Beta Software generally however Google’s approach to Beta software has been pretty good. They do one important thing that most software developers around the world dont, and that is create a solid application with a very basic feature set. Adding new features that are requested by their users and only as they iron out all the bugs out of the existing features. This ensures that get it as right as possible from the start. Even though much of their software is released as beta first (and some famously stay in beta for quite awhile) they have yet to have a real failure as they follow the recipe.
Nothing in life is a sure thing, Google included, however I would not have a problem laying a bet on this horse in our race. I think it is easy to call now, but unlike death and taxes it is not guaranteed.
I reckon most agents will get their listings onto Google by their third party multi-loaders (sometimes this is the franchise groups, sometimes web hosts like portplus and mydesktop), exactly how it is sent to realestate.com.au and domain.com.au already. The google spec will be different than what they use now to the other portals but I am sure all of them will set the transfer in place. I know portplus already has the transfer sorted and it is in place in the control panel and Peter has told me that Agentpoint already has it developed right into his system. Only Independents and individual agents that run standalone websites should have to resort to the indexing option.
I think most providors that have developed a link already have relied on an xml link. Google has released an API that I believe provides better functionality so it will be interesting to see who uses this API to provide a point of difference.
Peter Ricci
Glenn and Robert
I think you are both right, in relation to beta releases, I think myself included all of the providers are really in beta modes and have been for years. None of us are perfect.
Beta for Google is just a term. They have products in beta mode for years and in most cases they work perfectly.
With independent agents it is important to start the planning now. It is good to see Portplus integrating this already and I am sure Mydesktop will also.
It will be a testing time for portals, but it will take a while to have an effect. It is up to the consumers as to the success of it. Google will not get a free ride in the press with this one as it effects too many of the major players. But Google have an amazing way of getting publicity for anything they do because so many technology writers and so many people now use their products.
I as a company are looking forward to it.
Sam
Off topic but havce a look at the results for the search term REAL ESTATE in Yahoo Australia these days http://au.search.yahoo.com/search?p=real estate&fr=yfp&ei=UTF-8&meta=vc=countryAU
It’s been like that for a while, and it’s the first time in years or ever that REA and Domain haven’t been at the top, wonder if Google will follow suit ?
This will effect the traffic to the portals quite significantly if it carries through to Google.
Glenn
Nice spotting Sam.
Technically Domain is still at the top with that shortcut “Visit Yahoo!7 Real Estate for properties to buy or rent” but neither Domain or Realestate.com.au are not at the top of the organic results.
Google has a reputation of not fiddling too much with the organic results (competitors ranking very poorly or not at all) but they certainly do provide shortcuts to their own stuff at the top just like Yahoo. Of course their ranking algorithm probably has something that gives any google based site a few bonus points…
As an example.
http://www.google.com.au/search?hl=en&q=spreadsheet&btnG=Search&meta=
Sam
The paid/featured results get less clickthroughs than the organic results.
People bypass the ads in favour of the real thing mostly.
The REIA must be flush with enquiry at present.
Robert Simeon
Just curious in that has anyone here ever subscribed to Google Adwords and what was the success ? Personally, I find my eyes are trained to the left of screen and only very rarely do I look at Adwords ?
Elizabeth
Good evening,
Sam not too sure that the REIA nor any REI would be flush with enquiry. They are all too busy building their own portals.
The REI’s would all be seeing google as a bigger obstacle than domain and realestate to their plans to run portals and see us data reports.
Maybe Google will provide us with power over the REI’s as well? This is a very exciting move.
E
Sam
That was tongue in cheek Elizabeth. The REI’s aren’t capable of building a portal that works. I’ll believe it when I see it.
snoop
Some good points Pete
So
How are the major players…that is REA and Domain going to protect their revenue streams in the face of this?.
REA have 50m at risk? Domain??
As for the institutes.
I cant believe the people that pay their bills ie: the agents who pay dues let them get away with throwing good money after bad.
Robert Simeon
Snoop,
You are not the only one scratching respective heads on that question as I see it there are two case scenarios. That being worst and best. Best = Google just go away ….. yeah right !!
Fairfax Media can package Fairfax Digital into their newspapers with the one stop shop. I think they would be fast tracking launches in Hobart, Adelaide, Perth and Darwin with their recent launch of http://www.brisbanetimes.com.au They also have the Rural Press acquisition to play with so they have a national brand building which would be aimed at creating new dynamic markets. They also have their other online brands mycareer, drive, business day, RSVP and stayz to add further values.
REA – well they are in the hands of their shareholders so anything could happen there. A strong possibility of adverse publicity with media scare campaigns. I think should this happen News would be a happy buyer as again they can package this portal into their newspapers. This would also offer News an opportunity to then copy Fairfax by rolling out their versions of Saturday Domain in The Weekend Australian. Also their own versions of Domain East, Domain East and Domain Inner West weekly in The Australian. One must also remember that News Limited own the Cumberland Newspaper Group and they are soon to complete the FPC acquisition so, they have plenty of newspaper artillery. News Limited have always wanted their own property portal and more recently REA have been mast heading the real estate sections in their weekly newspapers. A very strong possibility that News will own REA completely.
Whilst this discussion still remains highly hypothetical should Google become a reality it is highly probable that REA and Domain revenues will face an up-hill battle. Most likely to me is that they both will half monthly subscriptions so that agent costs remain the same which is imperative. This would then allow both businesses to keep oxygen in their businesses whilst they develop new strategies.
No doubt News and Fairfax will be keeping a close eye on each other. Fairfax have another distinct advantage in that they print their junior domain’s in newsprint. Where News Ltd newspapers are in a much more expensive high gloss so Fairfax have better margins.
If News roll out a weekly midweek and Saturday real estate edition that would probably be also in newsprint which would see agents / vendors question the high cost of gloss in their suburban newspapers.
It will be riveting to see what happens both in print and online. I would put Fairfax ahead of News as they will be pairing off against each other with Google left unchallenged with online as it will be free to agents.
What ever happens Advantage Agent / Vendor !!
Peter Ricci
We also have to remember Microsoft and their Live Expo which is a competitor to Google Base. Then Yahoo will not want to be left behind. then there is Amazon and then we will find other specialised engines.
I believe in 5 years it will come down to the best user experience and none of the major portals at this stage would do well in this type of environment.
I think REA will roll out a clean site sooner rather than later and maybe go into other associated products and services in the property area.
Within 5 – 7 years I think all sites will be free for agents.
Robert Simeon
Peter said,
“I think REA will roll out a clean site sooner rather than later.” Brings a smile to my face as REA have milked the agents for all their worth for their own personal gains. They refused to change this mentality as they placed themselves ahead of their clients the agents and their vendors.
Whether it is too late remains to be seen – they are wounded on an agency based relationship given their decision to pursue third party advertising.
If we see a change where they clean the homepage will simply identify that they are running scared. Why ? Because before when this very point was raised they ignored it.
Glenn
Guys,
REA still has some stars on the team that wont see them lose their current position without a fight, that I am sure of. I had the pleasure of sitting in on a presentation by Shaun last year which I found very interesting and I took alot away from. He was discussing the online real estate market around the world and the challenges it was facing and what the industry should be doing to tackle the problem. The presentation was not focussed on realestate.com.au which I was dreading was going to be the case.
His focus was about handling the enquiries we get a whole lot better. When we are unsuccessful with that enquiry we should be concentrating on turning that initial contact into a relationship, and then into a future sale. We are always so focussed on the next enquiry, where are we getting it from and how much will it cost us that we are wasting what we are already getting.
Shaun gave an example of a group in the states that employed a floor of people that had the responsibilty of handling all enquiries. If they were “mature” enough to deal with a salesperson straight away (they were ready to inspect or list their hosue) they were sent to the sale team. Otherwise this department would keep in regular contact, providing further information and resouces to slowly build a relationship till such time as they did want to actually buy or sell a property.
Quite often agents invest in CRM systems to deal with buyers and sellers, but very few deal with online enquiries in a CRM system. At best they get added to the monthly email newsletter and thats it.
How many enquiries do we get that are not handled correctly by staff and not followed up correctly by staff? Good money gets spent to generate those leads and unless they provide that instant satisfaction of a commission they are tossed in the bin or filed away, never to see the light again.
My point in all of this is Google and plenty of others will try and muscle in on their core business of delivering property views and enquiries. The current portals might be able to evolve their business so that ontop of generating enquiries they value add by assisting the agent with processing of those enquiries and how they turn that enquiry into an ongoing relationship ready for the time that they are ready to buy and sell realestate.
Maybe thats the solution for them. To move their business sideways so when Google, the charging rhino, or somebody else invades they will only cop a glancing blow. The only problem with that is that with REA’s current thinking they will be charging for you just to login to their system soon.
What do you think?
snoop
Rea are certainly followers
They spend hundreds of thousands sending their staff to conferences in the US every year,but you see nothing in terms of industry leading or creative stuff.
REA also make over 6m a year on paid advertising from non listing based ads,so you wont see the site decluttering.
I think they are at a turning point and it will be very interesting to see how they deliver increased value to justify their price increases every year which they tend to base on the increased circulation/traffic model.
Sam
Customer service ? I haven’t seen any, one word replies to email enquiries or in one case no text at all just a brochure emailed to me, no replies at all is common, rudeness, indifference, arrogance. It certainly ain’t what it used to be.
Glenn
Thats the problem alright… we pay a fortune for these enquiries and so many are not answered.
Our realestate.com.au rep told me they personally sent out 10 enquiries here on the Gold Coast when they were looking for a new home. Only one agent followed up on time and another agent followed up several days later.. That was an 80% non response rate.. Unfortunatley you cant put a big flashing sign on your ads on realestate.com.au saying that you “We will respond, I promise”
Sam, if you want to get a result, tell them you want to make an offer on the property. They will call you then 😉 … maybe!
Sam
Makes no difference, I was enquiring on a property worth $5M and they couldn’t give a toss. Imagine what it would be like for home renters ?
Replies remarkable by their rudeness, no please or thank you, or can we help you with some thing else. I was always taught the customer comes first, they say jump you say how high, always worked for me.
It’s been too easy for them of late, when the market turns they will need to value to enquiry.
snoop
I think its an industry problem.
Change the remuneration model to nz where agents get no retainer and i gaurantee you will see a higher level of customer service.
Hams Pluit
Talking of industry problems and better internal systems I have been told a Real Estate Trade publication is due to launch later in the year. My understanding is that it will focus on the mechanics of a Real Estate business and it is independent.
Let’s hope, wasn’t something like this tried a number of years ago?
Hams
Mark Tull
This question could easily turn into a thesis. As one of the very few Google Adwords Qualified Companies in Australia, we manage more than 2 million ads on search each week. Google local in the USA is huge and becoming more like a yellow pages online for your area. The thought of an online directory of property for sale fits in with googles thirst for knowledge of all things for relevant search. The interesting point put forward above about adwords is that adwords is still the vast majority of income for Google, and they are very proactive in its protection and expansion, just look at their movement in China recently. Our clients currently advertise on the paid search listings for both agencies and for individual properties, charges which can go back to the individual vendor, just like a sign out the front. Our lead enquiry rates are very high and it is definately productive given pay per lead. So far as Robert states above re not looking to the sponsored links on the right, we now see Google with 3 to 4 listings at the top of the algorythmic (free if you can call them that – given the work you have to do to get and stay there) which look like free listings. Yahoo also have this top section and even have 1 or 2 at the bottom of the page.
Robert Simeon
Hi Mark – welcome aboard,
I find your comments most interesting and refreshing on this topic (and others too). I have been investigating sponsored links however unfortunately I am not receiving any compelling arguments that suggest that this is a strategic and successful way for agent advertising (until now).
My research told me that to use Google Adwords say for Mosman Houses I would be charged $0.67 per enquiry for Mosman, $0.56 for Cremorne, Real Estate Agents $3.70, Real Estate Australia $1.44 so obviously the key words are important.
My way of thinking is that some property portals have sold out their precious space to third party advertisers to drive their revenue streams. My way of thinking would be to trial Adwords for twelve months and compare results although I think we all know that eventually Google will remain supreme as Australia’s number one search engine for real estate.
Can you please elaborate further on this ? Thanks.
Mark Tull
Good research Robert. Google has made it very easy to set up an account and put ads up. Like any other industry, it then falls back on knowledge, comparitives and at the end of the day, cost per lead or cost per sale. A mate told me recently that real estate gets some 2 million searches per month, domain 1.5 mil and google and yahoo are the other 50%. He is in a position to know, so I cant rebut him. Adwords is a 7 billion USD industry, and last year aussis spent 1 billion online in advertising (real estate industry included). Funny thing is, these days, people still spend thousands on a brochure, or a mail drop and are happy with 2% conversion. Last week we averaged 8.43% conversion on all ads on google for all clients in all industries, and thats just on form fills, you know, fill in the form on the site to ask a question, or inquire or register. No phone calls, no emails, and no sales from shopping carts. I am looking forward to providing some real info on this blog, just the facts, just the facts.
Robert Simeon
Thanks Mark, so lay those facts out as I am of the opinion that property portals have reached a fork in their roads. With our agency Domain deliver a 3:1 domination over REA.
I am of the opinion that if an agency delivers a successful online website that delivers big traffic as we do, then the next move will be to a one portal subscription and a strong positioning with the number one search engine. Simply testing the online currents.
Currently, we are also experimenting with this very same testing in print media. I am 100 per cent sure at this juncture that agents need to define their brand much better with Google, which takes me to Adwords. From my investigations I see that in the real estate industry this remains in embryo mode although it is potentially a tsunami of attention from agents to get better results.
Mark Tull
As with anything, there is no certainty in one course of action. These days, we look to margin, and of course supporting multiple avenues THAT WORK. Those that generate leads, which real estate sales rely on, as you cannot to this point sell a house or land on line, are many and varied. Those that embrace technology, in a controlled environment that is able to customise their needs and budget, will win over those that do not. I would never suggest that all industries on line should shut out all other forms of advertising, but when you compare the reporting, tracking and final figures, none, and I am happy to say, NONE, are more accountable than on line searc (apart from your staff of course) Take the plunge, try it yourself, set it up and let the public test your site and its CONVERSIONABILITY – that is how many people trade off their personal data to you on a visit (divided by 100) At the end of the day, the public decides if they trust you, like you and are interested in the product you display. Not the advertising agencies, sites or search engines, it’s your site and its offerings.
Robert Simeon
Thanks Mark,
Please allow me to better qualify my questioning as you said “As one of the very few Google Adwords Qualified Companies in Australia, we manage more than 2 million ads on search each week.”
Are the results overwhelming for your clients ? Are they experiencing a much more rewarding experience over property portal advertising results for your clients ?
In your opinion is Adwords a much smarter option for real estate agents to consider, whereby monies should be directed at this online medium ?
Thanks
Mark Tull
Good Question mate. Like anything, each medium should be tried, tested, tracked and measured against its competitors. Putting it back to you, could you advise your best and average leads per dollar scenarios on your portal experiences. By this, you should have a good idea how many inquiries you get each month for your dollars, thereby determining a cost per lead. Then you should have a good idea of a cost per sale, ie how much it takes you to spend each month to get the required leads to actually sell a listing. This will be a very interesting question to answer and could start a whole new thread. PS My agents tell me they average about $2000 a sale in advertising (total) to achieve a sale.
Glenn
I found myself looking at Google’s Balance Sheet for the of Mar 2007. Amazing what you find when aimlessly surfing. We can only imagine what it would be like to have a liquidity ratio of over 11:1 with more than $14 billion in current assets which includes a smidgen under $1.5 billion in accounts receivable. In fact their outstanding accounts just about covers their whole liabilities.
I would be nervous if a behemoth like that was eyeing off my industry!
Mark Tull
Little news release from Google re Analytics that may interest some.
http://hotgoanna.com/blog/category/google/
Craig
The new Google Analytics is really cool. Much easier to use with new intuitive interface.
Glenn
My account was switched over this morning… VERY NICE.. !!!
Mark Tull
A little bit of intelligence that you can all benefit from. We have just certified our first PERFECT CAMPAIGN. This client has achieved 100% conversion rate over the past 10 days. Every single person that has visited the site from Google PPC has turned into a lead. Every single one and full details provided by them to an online database. We have awarded this client a very special status. Read more at http://hotgoanna.com/blog/category/google/ and please verify the result with the client if you have to.