Web sites hawking homes, apartments and much more are spending at least $90 million on advertising this year to romance the estimated $1.5 trillion U.S. real-estate market. The latest is Microsoft Corp.'s MSN HomeAdvisor, which breaks a multimillion-dollar campaign today in addition to launching a revamped site.
47% to hunt online
There's good reason for the activity in the highly competitive category. A Gomez Advisors survey in February found 47% of consumers said they'll use the Web to search for a house within the next two years. And of that group, 60% said they'll go shopping on the Web first instead of local agents classified real estate ads in newspapers.
"Consumers want information. They crave it," said Nick Karris, an Internet real estate analyst with Gomez Advisors. "They're patrolling the sites that offer the most detailed property information, and they're doing much of the legwork from the PC before they even inspect a property."
At this stage, Realtor.com--the official site of the National Association of Realtors--is the ultimate home page. One of six sites operating under the umbrella of Internet real estate company Homestore, Realtor.com is the site most often cited by analysts and competitors as the category leader.
Realtor.com had a unique audience of 1.9 million users in March, according to Nielsen/NetRatings, more than double that of No. 2 HomeFair.com, with nearly 800,000 users; HomeFair is a sibling site also owned by Homestore, which has an exclusive arrangement with the National Association of Realtors. Cendant Corp.'s Rent.net was No. 3 with 594,000 unique visitors; MSN HomeAdvisor, No. 4 with about 571,000; and Classified Ventures' Apartments.com, No. 5 with nearly 394,000.
What the real estate sites have in common is the promise that the transaction--no matter how complicated--can happen easily on the Web. The sites also promote themselves as a place for one-stop shopping: where consumers can do more than buy or sell a house, or rent an apartment; they can do everything from securing financing to selecting a mover, home furnishings and supplies to fix up that property.
Aside from general site Realtor.com and HomeFair--a real-estate site that helps people relocating to a new community--Homestore's sites include Commercial-Source, which carries commercial real estate of the National Association of Realtors; Homestore.com; Homebuilder.com; Remodel.com; and rental site SpringStreet.com.
In addition to Rent.net, Cendant owns Coldwell Banker Real Estate Corp., Century 21 Real Estate Corp. and ERA Franchise Systems, sites to which Rent.net links.
MSN HomeAdvisor and Yahoo! Real Estate also make the top 10 in traffic, said Nielsen/NetRatings.
Independents include HomeGain.com, Homes.com and newcomer eHomes.com.
"What these sites truly do best is empower and enable the consumer to do more research up front," said Gomez Advisors' Mr. Karris. "Consumers tell us over and over that the primary reason they come to Web sites is for access to listings."
Gomez, an e-commerce consultancy that posts detailed reviews and analysis of Web businesses on its own Web site (www.gomez.com), based its conclusions on a survey of 17,000 consumers in which 38% of home buyers said they already shopped on the Internet while looking for a house. Media Metrix, meanwhile, said in an October report that slightly more than 9% of the 33 million households online, or about 6 million unique visitors, used real-estate sites. They spent an average 13.9 minutes a month looking at the sites.
Homestore is the largest home and real-estate network on the Internet, Gomez's Mr. Karris noted, offering information on home listings, brokers, rentals and moving. It derives its revenue through a subscription service, advertising and e-commerce. The company, quoting analysts predictions, said it will be profitable by 2001; industry analysts projected Homestore will reach $140 million in revenue this year, nearly double that of 1999. Even so, its stock was trading late week at about $26.50 a share--down from its $138 peak--and had a market capitalization of $1.9 billion.
The company has fueled its drive into the market with a $30 million campaign under noted commercial director Joe Pytka with the theme, "There's no place like home." TBWA/Chiat/Day, Playa del Rey, Calf., created the 30- and 60-second TV spots, which are running in top markets, including the West Coast and New York.
These spots, depicting a cave family ousting another clan from a more spacious cave, "are the precursor" to an even more definitive branding effort slated to begin this summer, said Jeff Charney, senior VP-corporate marketing and communications, Homestore.
Print and radio support throughout the run, he said. As part of its summer campaign, Homestore will plaster its name and Web URL on 45,000 Ryder Moving Services and Budget Group rental trucks. Homestore's listings dominance has competitors positioning behind services such as financing and relocation.
HomeAdvisor breaks new ads
Using another homey phrase, MSN HomeAdvisor tries to broaden its appeal beyond financing and finding a home with a campaign breaking today from McCann-Erickson Worldwide, Seattle. Print ads and billboards as well as radio and cable TV spots all carry the tag, "Make yourself at home." HomeAdvisor's redesigned site features content about moving as well as home improvement tips from ImproveNet (www.improvenet.com), a site that helps people find contractors for remodeling projects.
Separately, Cendant is expanding beyond home listings to the relocation and financing arena. Its move.com site is a portal for finding a home or apartment, financing, organizing a move and other services. Cendant Mortgage recently inked a deal with America Online to provide financing services to AOL members through Cendant's new MortgageSave.com site. Portals such as Microsoft and Yahoo! also are leveraging their networks to promote their real estate sites.
"With competitors like this, I think it would be difficult to prove we're a monopoly," said John Giesecke, Homestore chief financial officer.
Move.com broke a $20 million advertising campaign via GMO/Hill, Holliday, San Francisco, earlier this spring to establish itself as the authority on moving and relocation. The campaign, themed, "It's a better move," uses a variety of familiar living situations, such as a deadbeat son and an intolerable roommate. Grey Advertising, New York, handles media placement.
The move.com campaign is the centerpiece of an integrated marketing effort and strategic business plan by Cendant's real estate units, the move.com network and Cendant Internet Group. As such, the move.com logo appears in all ads for network partners Century 21, Coldwell Banker and ERA.
"We're going around Homestore.com's positioning of `We have the most listings' because we can't compete with them in terms of listings," said Natasha Khalil, Grey's account supervisor on move.com, in explaining the campaign's focus. "Because move.com is owned by Cendant, we're able to say to consumers that they can believe in us because we've been around for years and we move millions of people every year."
The move.com campaign includes three TV spots plus print and radio. The TV spots are airing in 16 so-called high-mobility markets that include Chicago, Los Angeles, New York, San Francisco and Washington. Newspaper (The New York Times, The Wall Street Journal, USA Today) and magazine ads (Entertainment Weekly, Newsweek, People) also back Cendant's site.
Then there's Primedia's Apartmentguide.com, which is trying to get a slice of the online realty marketplace. Apartmentguide is a natural extension for Primedia, which publishes 77 free monthly listings distributed through drugstores, grocery chains and video stores.
Apartmentguide.com launched in April with tools and services for renters and property managers. The site's sales staff collects listings in person from participating property managers.
"This market is very mom-and-pop. It's not a matter of calling on a few major players, and you have to go door-to-door to get these listings," said Jamie Gallo, chief operating officer of Apartmentguide.com.
Apartmentguide.com charges $60 to $150 per month for each basic listing; depending on the extent of the listing and whether it is bundled with Apartmentguide's offline listings, rates can average $400 to $900 per month.
An initial $1 million campaign themed "Point. Click. Rent." is aimed at renters ages 18 to 34. TV spots are airing on cable, supported by radio, outdoor boards and alternative newspaper placements.
Atlanta shops Duffy Communications handles offline ads; 360 Interactive, handles online creative including banners.
One of the few independents is HomeGain, a site designed to match home sellers with real-estate agents. It's in the midst of a $30 million integrated national campaign--including radio, print, newspaper and online ads--to convince sellers that HomeGain is the place to get started in the hunt for home. The theme, "You'll be sold," is meant to underscore how the Emeryville, Calif., company can help consumers find the best agent for a potential sale. Tonic 360, San Francisco, is the agency.
"We wanted the power of our online tools to be reflected in our redesigned visual image, focusing on the `gain' concept that's in our name," said Bradley Inman, CEO, HomeGain. "Our message is we can help a better informed seller get a higher selling price."
For many consumers shopping for a new address this spring, their first stop will be the Internet.
Contributing: Tobi Elkin
Copyright May 2000, Crain Communications Inc.