Above, a screenshot from one of Homes.com’s new ads featuring Dan Levy of “Schitt’s Creek” fame and SNL’s Heidi Gardner.
During one of America’s most enduring traditions, Super Bowl Sunday, Homes.com plans to make history, regardless of who takes home the championship trophy.
Through four commercials reaching some 113 million viewers, the rapidly ascending real estate portal is launching what Costar Founder & CEO Andy Florance is calling “the biggest marketing campaign in the history of real estate.” With a $1B budget, celebrity spokespeople that level-up Jeff Goldblum’s role with Apartments.com, and a colossal distribution strategy across network, streaming, cable, radio and more, Homes.com is charging forward on its mission to become the No. 1 real estate search site. And in the process, the CoStar-owned portal intends to increase transparency, and elevate the reputation of real estate brands and agents, at a time when the industry may need it most. From Las Vegas on Thursday, still deep into preparations for the Super Bowl campaign kick off, but excited and jovial, Florance spoke with RISMedia and shared insights into the campaign, the competition and the next steps in Homes.com’s playbook.
Maria Patterson: I know the momentum for this campaign has been building for months, so you must be so proud and excited at this moment to see it come to fruition. Andy Florance: Well, it’s been a lot of work. The Super Bowl, for the last 18 months, has been our big planned release date. It’s basically the first major launch of the actual product Homes.com. It’s version one, and there’ll be a version two, three and four every year.
But we’ve completed building the neighborhood content out for the United States of America, which was a heck of a project that involved over a thousand people. We drove 2.8 million miles. We visited 21,000 neighborhoods. We did about 400,000 drone flights across America. We’ve built up an amazing amount of content, and we also have the best content now on schools in America through partnerships with a couple of folks and having visited a lot of schools.
A homebuyer is buying a house in a community, not just a house in a vacuum. People are looking to find a house with great shopping or schools or safety or restaurants. You can search for both the neighborhood and the homes on the same site. We think that’s pretty compelling. That’s unique, and no one’s ever done that. The project was audacious and challenging.
Maria Patterson: The tagline in the new campaign, “We’ve done your home work” speaks directly to this effort, correct? Andy Florance: Correct. And when you look at the first four commercials we’re running, they’re all around this subject. They’re highlighting the fact that we’ve done this in-depth research in all the communities of America. All the sites have the same MLS data. We’re going above and beyond that because that’s sort of what CoStar Group does. Without actually beginning any marketing, we climbed over 100 million unique visitors in a month. So once we start the marketing, we think we’ll continue to climb even higher and hope to distance ourselves from the competition.
Maria Patterson: Explain how the “your listing, your lead” model sets Homes.com apart from the competition. Andy Florance: We’re the first real estate portal in the United States to actually be transparent with who the agents are. All the other portals sort of obscure who the agents are, and the consumers are no longer seeing the brands, like Keller Williams or Compass or RE/MAX. What they see are the words “contact agent.” Then when you hit “contact agent” on these other sites, you’re connected with a random agent, not based upon their experience or skills or neighborhoods that they know, but just the Zillow brand. So real estate has begun to become branded as Zillow or realtor.com®. We’re going the other way. We’re putting the names of the agents and the brokerage, the buyer brokers, the selling brokers, front and center, and giving the consumers choice in brands and agents.
We’re convinced we have the best site and we have great traffic, and now we’re beginning the marketing, and we’re going to sustain the marketing for many years to come. You’re probably familiar with Jeff Goldblum playing Brad Bellflower (on Apartments.com), “Change your apartment, change your world.” This campaign is four times that investment.
Maria Patterson: I’ve seen the teaser ads. What a lineup! Andy Florance: Yeah, it is the biggest real estate marketing campaign in history by far. We’ll be reaching 90% of U.S. households this year, and we’re projecting 80 billion impressions—that’s roughly 600 per household this year. So that’s like Geico. The first (ad) in the first quarter is a 30-second Apartments.com spot with Jeff Goldblum. We’re doing that to refresh the audience’s memory of Apartments.com, that logo and the brand. And then in the second quarter is the main Homes.com launch, and that features Dan Levy from “Schitt’s Creek” and Heidi Gardner from “SNL.” Those two were the cast members that did the Zillow skit on SNL. So that was part of the reason I selected them. Dan Levy was involved in writing that skit, mocking the Zillow robocall. (Levy and Gardner) are the lead actors and actresses, and then Jeff Goldblum does a cameo—that connects Apartments.com with Homes.com. Then, we used Lil Wayne in a Super Bowl ad eight years ago, and we bring him back in as a teacher. And then you might see a cameo with me…
Maria Patterson:I thought that was you! I’ve got to say, you really have some acting chops, Andy… Andy Florance: Well, I don’t have any acting chops. The role was to be a stern old executive. And I could do that.
So we’re running a spot in each quarter of the Super Bowl, which is pretty damn big. And that’s just the beginning. We’re going to be in the Olympics, we’re going to be in the NBA, we’re going to be in the NHL playoffs, we’re going to be in the Oscars, we’re going to be in the Emmys, March Madness, doing all the networks, all the syndicated stuff, a bunch of cable TV stuff, “Yellowstone” and “Top Chef,” and then early morning shows, late night shows.
Maria Patterson: Your strategy is not only extremely broad, you’re really tapping into where people are right now. Andy Florance: I think we have over 400 different channels we’re running through. I think that a lot of our competitors are hoping we’re doing a little splash and then going away. But if you look back at what we do with apartments.com, we sustain it. We believe it’s worth it. It’s something you have to do to really get to where you want to be, to be No. 1.
Maria Patterson:Going back to Dan Levy—that’s a great connection regarding the Zillow SNL skit. But what else made you choose him as the Homes.com spokesperson? What is it about his vibe that you think is really going to connect with consumers? Andy Florance: Dan resonates really, really well with the demographic aged 25 to 40, and that’s an important demographic for us to reach. Consumer research shows that there is a high degree of mistrust of real estate portals. They feel that they’re a little scammy, that you get connected to a call center, the robo-calling stuff. And you don’t want to hit the button because you get hammered with calls. So we’re going for someone who has a high trust factor; we tested for that. But the combination of his appeal to the right demographics and then his skills—he actually is actively participating in writing the commercials. The main commercial is his idea.
Heidi and Dan have extraordinary chemistry. The two of them together are super effective. And then Lil Wayne just because you’ve got to shake it up—and he shakes it up.
Maria Patterson: So going back to the amount that you’re spending and the vastness of the distribution, is it even feasible that Zillow or realtor.com® can compete on this level? What do you think their reaction will be strategy wise, marketing wise? Andy Florance: I think realtor.com® is relying on the (News Corp.-owned) New York Post as their primary marketing vehicle—in-house inventory—and then leveraging the fact that they license an NAR brand. They’re not part of NAR, but they license the REALTOR® brand. They just put out their earnings, and their traffic is down, their leads are down, they’re losing money. So I don’t see them investing a lot, certainly not at this scale. Obviously the Murdochs are very wealthy, but they just laid off a ton of people at the Wall Street Journal. I think they’re going to just work the REALTOR® brand. And then I think Zillow is highly confident that they are unassailable, which I hope they continue to think.
I think the real issue is not just the marketing budget. I think the real issue is the business model. This is the first “your listing, your lead” portal in the United States. Agents now have a choice to invest their marketing dollars into a platform that costs a fifth as much and is not taking a commission split and never takes your name off of listings, doesn’t take your brand off of listings and is really agent friendly. I think that the biggest challenge realtor.com® and Zillow have is that their business model may not be competitive.
For instance, there’s a product that Zillow put out called Listing Showcase. So they say, yeah, we too have a “your listing, your lead” model just like Homes.com. But as I understand it, they are looking for you to pay $500 per listing to return your name to your own listing that they took off.
Maria Patterson: That’s unsustainable for most agents. Andy Florance: The majority of agents won’t choose that. They’re going to be like, “well, I want to support a site where they never took my name off in the first place and don’t charge me for my name to be on the listing.”
And think about the consumers out there. The brands matter. Various brokerage brands mean different things. The brands can convey information about the kinds of listings they have and the kind of people they have. The brands and the agents are really important. Over the last five years, realtor.com and Zillow stripped the agents and the brands out of the websites, and most Americans are going to look for real estate on these websites. So what we’re doing with “your listing, your lead” is restoring the brands of the agents and the brokers. We’re putting the agents back out in front of America.
And I’m positive we can make money at that because the most successful portals in the world operate on “your listing, your lead.” Zillow has lost more money than any other real estate portal has ever lost. It lost nearly $2 billion over the last 10 years. And folks like REA Group or Rightmove or Apartments.com, we all operate on “your listing, your lead,” and we’re profitable.
People really value that buyer agent or that seller agent. These people are their go-to trust people. So they should be able to choose them based on their bios, their backgrounds, what neighborhoods they specialize in. They shouldn’t be assigned by a dot-com.
Maria Patterson: You said it early on in this conversation—that this is all about transparency. That’s a word that’s being used a lot lately. For this industry that’s under siege at the moment, transparency is critical. Do you thereby see the Homes.com model helping to improve the overall perception of real estate professionals and the industry in general? Andy Florance: I do indeed. And I think it’s a really important point. If you think about that Saturday Night Live skit that Heidi Gardner and Dan Levy were in, that captured what Americans think of real estate agents, and it basically said that real estate agents are unpleasant and nasty. What we find in our research is that people love their individual agent—they like them, they trust them, they’re friends and they value them. But the industry writ large, is not popular. It’s like Congress; people like their congressmen, but they rate Congress poorly.
So the face of real estate to consumers over the last 10 years, the front door to real estate is realtor.com® and Zillow, which our focus groups say are kind of scammy. You don’t see who the agents are, you can’t see what’s going on, you don’t know who you’ve just hired or how it works. So we’re restoring transparency to the front door, and we’re restoring choice so that people can choose who they want to work with and they can choose their buyer agent based on their buyer agent’s skills. It’s transparent, it’s open, and we’re switching the revenue model. Unlike the other guys, we’re not taking a split of commissions. We’re going to stay a million miles away from an annual commission. We’re just charging a marketing fee.
Maria Patterson: And speaking of that, what’s next in your playbook? Is the subscription model ready to go? Andy Florance: Monday, we start selling that. We’ve been running a small trial group, a couple thousand agents that we made members. Everyone’s name brand shows up on our site, but people can choose to pay more to become a member—a couple hundred dollars a month, which is really cheap compared to what the other portals are charging. It covers all your listings and you sort higher in the order, and agent’s names and listings show up in neighborhoods where they’ve done deals. We won’t put anyone in a neighborhood where they haven’t actually done a deal. But if you’ve done a deal in Gramercy Park, we will feature you as an agent with experience in Gramercy Park, and we’ll feature all of the agents who are active in Gramercy Park, but the members show up first.
What we’re seeing is (that members) get sorted to the top of the list. They get 10 times as many leads off our site. And we’re going beyond Homes.com. We’re using Homes.com to discover who’s looking for a home or who’s looking to sell a home. When they look at a given agent in Gramercy Park and they read their bio, we then follow that buyer for several months across the internet—CNN, the Wall Street Journal, the New York Times—and we’ll send that agent to that person who expressed interest in them. What we’re seeing right now is a member’s name and face are seen, and the listing is seen, about a million times a month. And it’s really low cost. We’re not taking half the commission; we’re charging a couple hundred dollars a month to get a marketing fee and you get more leads.
But the thing I love to say is that this whole Super Bowl campaign we’re doing is for everybody in the industry. Every single agent in America, every single brand in America is going to benefit and get leads off these Super Bowl ads. Everyone’s name and brand is on these listings when we run these ads. So everybody’s going to win and nobody loses. Buyer agents, seller agents…everybody wins and the members will win a little bit more.
If you compare what’s happened in the past in our industry, a portal that was not “your listing, your lead” was taking business away from 90% of the agents and sending it to 5% to 10% of the agents. So most agents would lose in the old marketing campaigns and a small number would win—but they had to give up half their commission, so I’m not sure they won. I think some people lost and then some people lost a little bit more. With Homes.com, everybody, every single agent can smile when they see these ads. We’re driving business to everybody.
Maria Patterson: So, with that in mind, when do you think you’ll take the No. 1 spot in the portal landscape? Andy Florance: Well, we have some experience with this. We competed with and beat Zillow in the past. In the apartment space, it took us about four or five years to go from No. 5 to No. 1. So it’ll take a couple of years, but we absolutely plan on being number one, and we are excited about it. We think we can do it inside of three years.
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