Bronte Media

I am on a blogging roll today, so why stop.

Former Homestore exec Andrew Coleman has a fantastic article about real estate lead generation up on Inman today. You’ll have to click on the link today (feb 28) if you aren’t a subscriber, otherwise it will disappear behind a paid wall.

Hopefully this graphic, which is the crux of the article, will stay up though:

He also breaks the news that Quinstreet (Online Education lead generation) and Nextag (mortgages) are getting into traditional real estate lead generation, presumably after smelling the blood of housevalues.

Comparison shopping engines like shopping.com and Shopzilla have long been some of the largest buyers of search marketing. Doing so has been incredibly lucrative over the past few years. But now that seems to be changing.

Shopzilla, which had shot to the industry leadership position, and was an incredibly successful acquisition for the Scripps group, now seems to be faltering. There has been a big management reshuffle, and predictably bad news is announced soon after to set the bar lower for incoming management.

The reason is, by and large, they are being priced out of the search marketplace. I wonder if this had to do with Google’s quality score update?

Brian has a great breakdown of the earnings call a few weeks back. They said if keyword prices don’t come down for them then they would invest in ‘brand building’ to acquire traffic to the site (i.e. they are shitting their pants and pray to hell that the economics of search marketing are still there).

Comparison shopping stands at a crossroads and it will be interesting to see innovation over the next few years as the cash cow of buying cheap search traffic and converting it at higher prices disappears.

One site I love is Jellyfish.com, if not for their incredibly addictive (no pun intended) and innovative Smack Shopping event each day.

Last week, we launched a new version of Homethinking, with (hopefully) major UI improvements and also the addition of advice, whereby Homeowners can ask questions around the real estate transaction and get answers from professional real estate agents (instead of 14 year old girls in Korea using their cell phones). The quality of the answers, as determined by the questioner, also contributes to the agents ranking on Homethinking.

One lessen I have learnt in the year and a little we have been going is that I did not know some pretty basic UI principles. I thought I did, could say if a site was well designed or not but that is very different from starting with a blank canvas. Over the past year I have quickly learnt through a crash course how people interact with web apps. I don’t think I would have ever got that unless I decided to do a startup. Any web sites I launch in the future, I am pretty sure I will be able to do an OK job.

Either way, I want to thank Mike for his great advice. Other great resources are Jakob Nielsen’s Alertbox (I had read the columns, but reading the columns as you are redesigning a site is infinitely more valuable) and Yahoo’s UI design patterns.

So take a look at the new site and let me know if we are on the right track and offer a few comments on what’s still confusing or wrong.

Dave Marron, a former VP of Sales for Zip Realty, has a fantastic post over the company’s strategy on the BloodhoundBlog.

ZipRealty announced its first quarter results last week. The new strategy is basically to expand rapidly into new areas. Among the reasons were so that overhead can be spread over a bigger footprint. And that firms that invest in down markets tend to be rewarded over the longer term.

Let me first say that I am a huge fan of the company’s model. Not of giving rebates (although that helps) but basically the strategy of creating a central and efficient web site which can produce high quality buy-side leads for its agents. Basically, taking away the online marketing piece for agents and letting them focus on everything else.

During 03-05, that model looked like it was working, with agent productivity above the average. But as the Californian market has dramatically cooled from a transaction volume perspective, the assumption is looking a little more suspect.

Sure, expanding into new markets will mean that the average productivity will be temporarily low as they gain traction. But as Dave points out, the average agent is making $2,200 per month now and there has been significant churn. That’s not to say that amount is bad (real estate is so unevenly distributed that averages don’t hold a lot of value), but it is hardly above average for a real estate brokerage operating in the markets they do.

Dave rightly asks why they have so much overhead for such little returns. Whilst spreading it over a larger geography may be a solution it is a dangerous one if they don’t have the core model under control. As Dave says, Prudential California looks more efficient than ZipRealty at this point in time and has a similar agent count.

I wonder also if Redfin and Movoto are having any impact. Rather than web 2.0, those sites are more ZipRealty 2.0.

Also, although they have a reasonably good web site and online marketing efficiency, ZipRealty hasn’t attempted to go beyond the Internet to try and make the customer service and transaction support components more efficient, which I am sure would have just as dramatic an impact on agent productivity. Letting the agents focus on the core value of advice and counsel should be the company’s core mission.

Either way, it will be interesting to watch Richard Sommer, who is a very sharp mind, put his mark on ZipRealty in the next 12-18months and watch the agent productivity as those markets come online and the dust settles. I’ll hopefully post his progress as the quarters come around.

Shoemoney has a great tale of how a ringtone affiliate uses nefarious techniques to trick kids into thinking they are getting free ringtones, when in fact they are paying $10/mo.

Believe it or not, that sort of marketing used to be pretty prevalent just a year or so ago. Then it was outlawed and crippled companies like Jambo, which News Corp then soon after bought a majority stake on the cheap. MySpace suing spammers has a lot to do with ringtones as well. And now the state of Florida is taking action against a company called DirtyHippo.com (big late night MTV advertiser as well).

Ahh the wonderful world we live in.

There has been some quality discussion around the pitfalls of outsourcing development over at NextNY in the last few days. Darren Herman has an excellent post about a positive experience he continues to have, and Laurent Katz and Lee Semel both have some lessons learned from less positive experiences.

Rather than re-blog my experience, I posted a fairly lengthy account of how I go about outsourcing on the NextNY listserv that you might find interesting, and if you are reading this post and reside in New York, hopefully motivate you to join NextNY if you aren’t already a member.

While Sendori, which aims to create an advertising marketplace for marketers to bid on domain redirects on a per visitor basis, sounds like a solid enough idea, it has the potential to create all sorts of whacky incentives and may even in fact hail a comeback for many made-for-adsense type webmasters.

Firstly, made-for-adsense (MFA) webmasters are a dark subset of direct navigation that are sometimes called arbitrage web sites. Although they can make a lot of money, I am hesitant to call them arbitrageurs because they take risks (i.e. that a certain percentage of visitors will click on higher paying ads) and arbitrage is by definition riskless.

MFA webmasters buy cheap traffic, say for 5 cents a pop, and then hope that anywhere between 33% and 50% of the time a visitor will click on a 20-30 cent text ad. Google’s quality score update fucked a lot of them up but that’s roughly the economics of the industry at the moment, as far as I can tell.

But Sendori essentially takes away a key component of that risk (i.e. the two in three times, or one in two times, that a consumer doesn’t click on the ad) by automatically re-directing them to the advertiser. MFA webmasters would assumedly replace Google AdSense with Sendori.

Sendori will no doubt position this as direct navigation and that the traffic is organic. But there are so many incentives for the owner of the domain to push junk traffic to the URL that the system wont work.

Techcrunch profile for more.

David, who helped with the launch Homethinking, has just joined Signal Match, a startup that is developing models and algorithms to allow people to connect with others like them based upon their personality and interests. The firm is founded by some of the original team of Amdocs, a successful Israeli tech company that helps telco and yellow pages companies bill their customers.

They are at the very early stages but they would appreciate if you might help them train their technology through a series of tasks (the initial one is around musical tastes and the setting in which music is consumed). The survey can be found here.

If you have any feedback, be sure to leave it in the comments and they will dutifully incorporate it as the product develops.

Yahoo has launched a Digg-like structure for customer support at each part of the Yahoo Universe. It is a fantastic and transparent way for Yahoo to improve their services.
(Note to Mike: time to re-brand issue voting in JIRA).

But perhaps there is too little data to begin with or Zillow employees have nothing better to do with their mornings. This, the top voted feature request, from Yahoo Real Estate feedback:

Hiring sales people for a free product? Perhaps a premium version of Google Analytics (or maybe one with paid support) is on the way.

This from a job posting on Google’s web site:

“The Account Executive’s main responsibility is to drive adoption of Google Analytics with our Fortune 1000 advertisers in North America.

# Execute against targeted lists and close new business.
# Cultivate relationships and increase Google Analytics adoption throughout all levels of the client organization”