Zillow CEO: “We sell ads not houses”

Rascoff says Trulia brand is not disappearing

Despite how it may look to a consumer, the Zillow Group (Z) family of websites, which include Zillow, Trulia, HotPads and StreetEasy, help to sell houses but that’s not really their primary goal.

Reiterating the company’s plan to collect as much agent advertising spend as possible, Zillow CEO Spencer Rascoff said Tuesday that Zillow fashions itself as a media company.

“We sell ads, not houses,” Rascoff said in the Tuesday call discussing Zillow Group’s first quarter earnings. “We’re all about providing consumers with access to information and then connecting them with local professionals. And we do a great job of giving those local professional high-quality lead, they’ll covert those leads to at a high rate and then want more media impressions from us. So we’re not actually in the transaction, we’re in the media business.”

Rascoff listed increasing the Zillow Group’s agent advertising business as one of the company’s four main goals in 2015.

Rascoff said that Zillow’s “Premier Agent” advertising program is seeing “significant growth” in 2015, stating that for agent advertisers that have worked with Zillow for over a year, the average revenue per advertiser has grown 50% year-over-year.

According to Zillow's first quarter earnings statement, Zillow Group had a total of 103,415 agent advertisers at the end of the first quarter. This number includes organic additions throughout the quarter as well as the addition of Trulia's agent advertisers, de-duplicated across Zillow and Trulia, but excluding Market Leader-only subscribers. Agent advertisers spent a record amount with Zillow Group in the first quarter of 2015, the company said. The combination of increased impression inventory and advertiser count resulted in average monthly revenue per advertiser of $354 during the quarter.

Rascoff said that once the newly combined sales force of Zillow and Trulia are able to sell ads to agents across both sites, he envisions ad revenue growing ever more.

Additionally, despite some speculation to the contrary in the wake of Zillow’s acquisition of Trulia, Rascoff said that Trulia isn’t going anywhere.

After Zillow acquired Trulia in February for $2.5 billion, some observers wondered how long the Trulia brand would survive as a separate entity. But Rascoff said that the company believes in operating multiple brands.

“We are big believers in having multiple brands,” Rascoff said. “We believe there are significant benefits to having different brands. We’re going to continue to invest heavily in the Trulia brand.”

Rascoff said that the combined audience of the Zillow Group websites is much larger than any competitor in the space.

“Our audience really dwarfs any other competitor in the category,” Rascoff said, taking direct aim at Move, which operates for the National Association of Realtors.

Rascoff said that Zillow Group intends to invest $100 million in advertising its brand in 2015.

Move, for its part, announced a massive advertising campaign on Tuesday. Move CEO Ryan O’Hara told HousingWire on Tuesday that “aspires to be the home for all things real estate” and to achieve that goal it is undertaking its biggest and boldest marketing initiative in 20 years.

“Serving buyers, sellers and renters of properties with the best information and tools anytime, anywhere and communicating the value brokers and agents provide as trusted guides through the process is our utmost priority,” O’Hara said. “This is what we mean by what’s real in real estate – and what sets us apart.”

For the last several months, Move and Zillow engaged in a rancorous battle over listing data provided to Zillow by Move-owned ListHub.

The relationship between the two companies ended recently, and Rascoff said in April that the company anticipated the transition away from receiving listing data from ListHub to be “very rocky.”

But Rascoff said the company is very pleased by the progress it’s made in signing direct listing agreements with multiple listing servicers and brokerages.

“Zillow and Trulia now have more active listings than we would have if the ListHub agreement continued,” Rascoff said last month. “In short, we did it.”

In fact, Zillow also announced Tuesday that it has reached listing agreements with 105 new multiple listing services in the last six weeks. That number brings the total number of new MLSs that signed up to provide direct listing data to Zillow in 2015 to 235.   

"We have put a tremendous amount of resources into building these direct relationships with MLSs and creating technology to ensure we can show listings in real time to the millions of home shoppers visiting Zillow Group sites every month," said Errol Samuelson, Zillow Group chief industry development officer.

"It is crucial for home shoppers to be able to see listings as soon as they come on the market, especially in areas where inventory is constrained,” Samuelson continued. “Our direct feed agreements mean MLSs and their members have the opportunity to get their listings in front of the largest possible audience of home shoppers, in the fastest way possible."

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