Years ago, we all kept paper maps in our cars, then came early (expensive) navigations systems, followed by sites like Mapquest where you could print out specific sets of routing directions. Garmin quickly came out with lower-cost personal navigation systems, and now, we all have Waze on our smartphones and can easily embed Google Maps or Mapbox on any website.
As discussed at the Real Estate Standards Organization (RESO) Fall 2019 conference, real estate has come a long way from the paper catalogs used years ago. Keep reading to see the behind the scenes at the industry conference, and learn how new tools are changing how to search for a home for both consumers and Realtors.
Large real estate portals selling consumer information
Zillow and Trulia earned more than $1,333,600,000 (yes, $1.3 billion) in revenues in 2018 with the majority of that revenue coming from selling consumer contact and budget information to real estate agents and other providers.
According to their 2018 annual report, their IMT segment is defined as "We generate revenue from the sale of advertising services and our suite of marketing software and technology solutions to businesses and professionals primarily associated with the residential real estate, rental and mortgage industries.". Ask the average agent paying for their tools/advertising, and lead information is the primary value they see, and this accounted for $1.28 billion of their TOTAL $1.3 billion revenue. That's how much your clients' info is worth!
Consumers are quickly becoming aware of what happens on Zillow and other large real estate portals with their information. You would never go to a website and enter your contact info, along with the $500k value of your 401k, and let them know that you are planning to move investments in a few months, but that is equivalent of what happens when someone is looking for a $500k house. You're telling an information broker that you're planning to have a major financial transaction in several months.
Realtors are increasingly realizing that sending their clients to these large portals is causing them to lose clients because their clients' info is being provided to "Premier Agents" of those sites, so they're in essence referring clients to their competitors.
Smart real estate agents realize that consumer privacy is a competitive advantage and with a modern IDX engine and consumer tools, they can provide an even better home search experience on their own website.
Real estate data and tools following growth of maps and navigation applications
Remember paper maps in your car? I was at the front lines of the HERE Technologies (NAVTEQ) that provided the map and traffic data behind almost every map and navigation application in the United States and Europe and shaped the experience we all use almost every day today.
Here's a quick 10 minutes of my talk from The Real Estate Standards Organization (RESO) Fall conference about the parallels real estate agents and consumers are seeing today with what happened with map/navigation apps 15 years ago.
If you want to geek out a little more on innovation in the mapping industry and see more of what's coming in real estate, here are pages 6 and 7 from RESO's recent case study "It's Inevitable: Moving to Replication via the RESO Web API".
Auto Manufacturers Move to APIs
This was the situation when car manufacturer Toyota released the first navigation system in 1987 on the Toyota Crown. “While Google Maps was first released using GPS in November 2007, many of us first experienced a change in the navigation experience that was only possible due to a change in spatial data being accessed via APIs. This was done by pioneers like MapQuest’s Find Me and later by Waze, the GPS navigation software app owned by Google. This change in how the data was accessed also created a fundamental shift in how companies collected spatial data.”
A major player in this transformation was Kurt Uhlir, currently Showcase IDX’s Chief Marketing Officer. Uhlir was part of the small team that realized that there was a more efficient way to collect, enhance, and verify the data and created the spatial data and navigation industry that grew NAVTEQ from $85 million in revenue to $1.2 billion. Companies previously spent hundreds of millions of dollars on field teams and remote data to create their core asset (spatial data with 250+ attributes per road segment and millimeter-level accuracy) around the world, according to Uhlir. When Google entered the arena, it spent an estimated $300 million in 18 months to collect only a portion of the road network in the United States and Canada.
Since then, the technology Uhlir and his team invented and patented has been used by companies like Waze, Google Maps, Apple Maps, Facebook, Instagram, Twitter, and others, and is quickly becoming the backbone for the data driving much of the autonomous vehicle industry.
“This seemingly small, behind-the-scenes change to accessing spatial data via APIs was the triggering change that led to the vast majority of motorists using Waze to get directions to our next open house, people playing games like Pokémon GO, and many of the athletic applications we use to track our progress today,” Uhlir explains.
Borrowing a Page From the Navigation Industry
Uhlir cited the example of the navigation industry moving from one data set to an API. “Most people have multiple mapping apps on their phones that provide full navigation,” Uhlir explains.
“While the spatial data industry saw mass consumer adoption of navigation thanks to Garmin, Magellan, and TomTom offering personal navigation devices, it really was a change in how the data was accessed, combined with the mass adoption of smartphones that made navigation a part of our everyday lives.”
“HERE (formerly called NAVTEQ) has been the dominant map provider in the United States, Europe, and much of the world for decades,” said Uhlir, adding that everything from printed Rand McNally maps to car navigation systems to personal navigation devices and even websites like MapQuest were powered by HERE data and a few smaller data providers.
These navigation systems and applications used static copies of a subset of the HERE map that was generally recreated by each brand into a proprietary data format,” said Uhlir. "These navigation system and applications used static copies of a subset of the HERE map that was generally recreated by each brand into a proprietary data format,” said Uhlir. “This changed when Traffic.com and INRIX began providing real-time traffic data; these mapping and navigation systems incorporated into the consumer experiences. But the bulk of all spatial data was not accessed in real-time – or even short time,” Uhlir joked.
How to ride the tsunami of innovation in real estate marketing technology
If you wanted maps on your website or in your SaaS application, would you ever think of building your own version of Google Maps or Mapbox? Absolutely not.
Mapbox has invested hundreds of millions in capital, after having raised $227 million and earned many more millions in revenue, to build their solution. Google Maps is known to have invested hundreds of millions building search, display, and routing applications to create the Google Maps API offering. Even if an agent had access to the map data, the cost to build an experience reasonably acceptable to consumers could not be done.
Yet, many people attempting to build “all-in-one” real estate marketing platforms have tried to do this with home search and consumer engagement tools.
The rumor within real estate technology circles is that Zillow spent $25 million to create the technology and systems to ingest all the data they use on their sites. Now, this includes more than simply MLS data, but that’s still a staggering amount to just acquire data, normalize it, and make it internally available to applications like a home search.
Smart marketers and real estate companies have realized that a modern IDX requires the focus of a Google Maps or Mapbox. Showcase IDX has been called an “IDX engine” and referred to as the “Intel Inside” of any modern real estate marketing solution for that reason.
In my keynote talks about Tsunami Innovation, I talk about riding the increasing waves of innovation. It’s almost impossible to stand against a tidal shift of a tsunami, yet when you harness the wave and learn to ride on top, the entire industry changes and people’s lives change.
Home search and consumer engagement tools in real estate are at a similar point to where we saw mapping and navigation technology a few years ago.
I’m excited to be at the front of this change and working with a team that not only loves deep data and technology but that wakes up each day excited to be changing the world.
The central hub to successful real estate marketing
It takes incredible agencies and partners to provide a cohesive marketing strategy that works and is tailored for different teams and individual agent brands.
No matter the marketing campaign, you ultimately have to drive a consumer to an online experience where they can search for a home, save searches, get alerts of new properties, interact with their friends and family, etc. - all without having their information sent to competitive agents and service providers.
“Powered by Showcase IDX” has become the central hub to successful real estate marketing campaigns. We know that focusing on building the modern IDX engine allows other vendors (e.g. CRM, social media management, etc) to focus on what they do best.
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