OnBlog: The Onboard Informatics Blog

Conversations on the Art and Science of Information

Archive for the ‘Industry’ Category

Transformation in the Air

with one comment

Change is coming!

Change is coming! (Image: FloridaLightning.com)

“If you don’t like transformation,

you’re going to like irrelevance a lot less.”

– General Eric Shinseki, US Army

Do you ever get the feeling that things are falling into place? An unspoken and inarticulate sense that something approaches. The faint smell of ozone as a thunderstorm approaches.

In 2008, I get the feeling that the real estate industry is entering such a time of transformation. Things are falling into place. That it’s happening in the midst of a sustained downtime in the industry as a whole is not wholly unexpected. We will come out of this downcycle, and while keeping an eye on the ball here and now is important, I thought to take things up one level and offer some thoughts on what the real estate industry that emerges from the darkness might look like.

At any given time, there are innovations and trends that bear watching. But recently, three disparate and apparently unconnected events struck me as something falling into place. I share them with you.

Prime: ActiveRain launches Localism.

Now, I have no way of knowing whether Localism will be successful or not. Jon Washburn, CEO of ActiveRain, has no such doubts, claiming that Localism.com will have more traffic than Trulia and Zillow combined in 24 months. Perhaps. As the saying goes, that’s why you play the game on Sunday.

The fact of Localism.com itself suggests, however, that there is something shifting underneath the surface of real estate. I believe it is a very subtle shift, but a seismic one. I believe we may be entering into a new era where real estate becomes centered around community instead of property. These are uncharted waters.

What is meant by “community”? It goes beyond simple geography. Realtors are already familiar with ‘neighborhoods’ — Onboard clients more so than others, perhaps (go go gadget plug!). But community is not just a neighborhood. It goes beyond place.  Community is not mere geography. It is an emotional/psychological geography that encompasses the land, the buildings, the people, and the services that surround them.

My community is far more than just my little house; it also includes my neighbors’ houses.  The guy up the street who has a very angry dog that he keeps chained up in his yard is a huge part of my community.  So is the pizzeria in town that serves delectable gourmet pizzas.  The train station, the bike shop, the cafes, the little boutique that carries Prada and Helmut Lang, the summertime concerts in the park, the diner where the locals get together for Sunday brunch — these are part of the fabric of community.

Localism.com’s purpose is to tap into that community, to capture its essence, as well as all of its local information and flavor. Again, whether it is successful or not, only time will tell. But the motivation behind it, the reason why ActiveRain thought to bring this to market at this time, will remain as strong as ever.

Secundus: MLS 5.0 Manifesto.

Saul Klein, of InternetCrusade and Point2 Technologies, penned a detailed proposal (more like a call to action really) about the “MLS of the Future” that is generating quite a bit of conversation around the RE.net.

While I have my criticisms and questions about the vision of MLS 5.0, the interesting phenomenon is that the responses — almost all of which are negative, some even downright hostile — do not take issue with the basic concept itself. The negativity is almost entirely about the role of the National Association of REALTORS®.

The issue, then, isn’t with the idea of a single national MLS that simplifies business-critical tasks like syndication and listings exposure; the issue is who controls that resource and its distribution rules. The idea of a single standard and what that enables — that idea everyone loves.

But consider what the admission of the need for a single system means psychologically for real estate. Once upon a time, it was almost as if the value of an agent was tied entirely to his ability to deliver access to the MLS. Wasn’t that the whole point of the DOJ lawsuit? And yet, even as NAR and the government duked it out in a battle royale, there was a shift going on underneath the visible surface as individual agents and brokers realized that if the business of real estate is to serve as a human user interface module to MLS data, they are in deeper trouble than they had thought.

The explosion of agent blogs, of real estate blogs, of social networking, of twittering, and so on is but one response to the fundamental shift away from interface-to-listings towards something new.

Imagine a real estate industry awash with data, the way that financial services are awash with data.  Basic information about a property will be everywhere.  With a common standard, pushing listings from your laptop to a hundred websites, blogs, and microsites throughout the world could be automated.  Real personal syndication direct to consumers — along the lines of RSS readers — can become a real possibility.

If you are a real estate professional in that industry, what do you compete on?  What is your value proposition?

We are entering uncharted waters.

Tertius: Better Homes & Gardens Real Estate launches the Clean Slate Blog. (Disclosure: BHG is a client of Onboard Informatics)

Better Homes & Gardens, the most important strategic initiative launched by the industry giant Realogy in recent years, has an official corporate blog. This is a HUGE development. There is no company that is more important — nor more conservative — in real estate than Realogy. For a Realogy brand, and to boot its most important brand in years, to have a corporate blog is an incredible development confirming the power of blogging and social media in general.

If Realogy can get into corporate blogging, then any real estate company can.  Furthermore, if Realogy with its billions of dollars, TV advertising, and hundreds of thousands of agents, is going to leverage the power of social media… you had better keep up.

But what is that power, at the end of the day? I actually believe that BHG’s embrace of blogging, Web 2.0, and social media will be seen a couple of years from now as the peak of the Web 2.0 movement in real estate. We’ll refer to it with the same wistful tone with which we talk about the days of $128 Yahoo shares.

I know this sounds extremely negative, but it isn’t really. Social media — and its cousin social networking — is but one piece of the overall puzzle.  Arguably, it isn’t even the most important piece.  But while blogging and social media have taken center stage in real estate as they have for the past few years, true progress has been blocked.  Like infants who discover that they have these things called hands, we have been picking up just about everything we can reach, to play with it, put it in our mouths, without too much consideration about business value.

Now that even major brands are adopting it, perhaps we can put down the shiny new toy and start focusing on actually delivering customer value which involves far more than simply blogging about a listing.

The Connection

These pieces are interconnected, although at first glance, it’s hard to see how they hang together. They hang together in pointing the way to how the post-bubble, post-Internet real estate services may be conducted.

At the end of the day, real estate is about service.

No matter what the technology, no matter what version of the Web we’re on, no matter how many social networks we are part of, the solid ground underneath everything in real estate is service. The delivery mechanisms might change, the speed and efficiency may be dramatically improved, but the substance of the value will remain service.

Brokers and agents get paid for the service they render to clients. The shift in the definition of what service it is that a realtor provides to a customer is being pushed by the trend towards data ubiquity and pulled by the trend towards hyperlocal information.  Both are rooted in consumer desire to leverage the power of the Web and databases to understand more about the most important purchase of their lives.  Prior to the real estate bubble bursting, realtors still believed that they were in the business of providing access to various trading platforms and data systems. Those who still do are doomed to irrelevance. Data wants to be free; data wants to be standardized; and data wants to be shared.

Because simultaneous with this trend towards data ubiquity, consumer emphasis is shifting away from the property itself to the surrounding community. Localism and initiatives like it start to showcase agents, brokers, and others who are truly experts in the town, neighborhood, the community. Consumers themselves find that they care very much indeed not only about whether their house has a fireplace or not, but what the Walkability Score is. They find that they care greatly about what shops are nearby, what parks, what transportation facilities, what restaurants; they find that they want to know if they’ll fit into the life of the community, or if they would be standing out like sore thumbs. They want to work with real estate pros who know the inside scoop about the community — as well as being experts on housing and the transaction.

The agents and brokers who survive and thrive will realize that their expertise and knowledge of the local community may be more important an asset than how many listings they have. They will come to realize that the consumer can get listings from every site, blog, and Twitter around, and realize that the service that the consumer can only get from the local realtor on the ground is his or her knowledge of that particular local market. This is the principle and insight that Onboard Informatics has been founded upon. That the world is coming around to how we’ve always seen things is, well, gratifying.

And of course, at the same time, social media is moving into the mainstream. When even the major brands are getting into blogging and social media, there are three big implications.

One, social media is no longer ‘out there’ — it is as mainstream as it can be. It is no longer a fad. It isn’t a passing fancy. Transform, or become irrelevant. The message could not be any clearer.

Two, the likelihood of truly radical innovation coming from social media is now rapidly approaching zero. Once a technology moves into the mainstream, it ceases radical innovation.  Consider if our laptops are really that dramatically different from the Apple II.  Instead, the next period is one of adoption, integration, and evolution. Blogs, social media, and social networking have yet to prove true ROI in real estate — and it will become more and more difficult as more and more agents realize, “I gotta get on this blogging thing.” Many of the resulting blogs will be bad; some will be great; the vast majority will fall into that middle area of mediocrity.

What will move the industry forward is not some new technological breakthrough, or some new way of doing the same old thing. Instead, it will be finding a way to do brand new things using proven mainstream methods of social media.  That is what true adoption and integration means.  Sending someone the same old MLS listing via Twitter to their iPhone is not “new service”.  Arranging an online chat between the home seller and the buyer might be.  Doing a WebEx demonstration of the house and its local community, complete with a presentation by the home inspector, and the mortgage broker, to an audience of invite-only potential buyers might be.

Three, the age of the amateur might be coming to an end.  Social media done badly is an advantage only when professionals are busy doing something else.  Plus, it’s too hard to do truly outstanding social media marketing. (In part because it bears no resemblance to “marketing” as we have understood it to date.)

Of course, the definition of a professional might be changing.  The old skills will also require transformation or suffer irrelevance.  In an industry where personal and uniquely individual service delivery is the basis of competition, how does one do branding?  What does it mean to have consistent message?  These are but a couple of the questions that the marketing professionals — of both old and new methods — will need to wrestle with.

In the Glass Darkly

It is, of course, impossible to say what the final shape of the industry will be.  It is unknown whether a single data standard can be established.  Whether Localism.com spurs on new change, or dies on the vine, too far ahead of its time, is unknown.  We see these things as if in a glass, darkly.

What is important to keep in mind is that transformation is coming.  We may not know what will change, but we do know that change will come.  Flexibility, preparedness, and strategic insight are key skills to have so that your organization can indeed transform successfully.  The alternative is irrelevance.

-rsh

Written by -Rob

September 9, 2008 at 5:26 pm

Local Media Blogs & Real Estate

leave a comment »

A Cornucopia of Local

A Cornucopia of Local

The New York Times, in a bid to stay relevant in the new media environment, has weighed in on the phenomenon of local place-blogging:

Suburban bloggers, though, spawned a subgenre of narratives about diaper changing, neighbor trouble, temporary traffic snags and other subjects rarely considered worthy of publication in previous eras.

Back then, it was hard to tell whether these lonesome scribes could sustain the chore over the long run, and if they did, what sort of audience they might attract.

Nearly a decade later, bloggers in the suburbs are starting to answer those questions. Many have let their sites go untended, but a few have built serious local journalism operations, while others have developed a following on certain topics and bask in the muted limelight of Internet fame. These survivors offer newly minted bloggers a pixilated blueprint for how to rise above the chaos of the blogosphere. For readers, the blogs are providing news in ways unseen in traditional local news media.

Interestingly enough, not one of the local blogs that the Times profiled was written by a real estate agent. Granted, this may be the result of bias on the part of “journalists” to highlight those blogs that are “newsy” in nature. But there may be something more going on here.

In fact, I believe every real estate blogger should take a good hard look at the websites mentioned in the article: Baristanet, Red Bank Green, Hoboken411, WestportNow, and New Haven Independent. Unless your hyperlocal blog is getting 82,000 monthly visitors (the number that Baristanet.com gets), you might want to think about emulating what is obviously working.

For myself, what immediately stands out that differentiates these local blogs from realtor local blogs is that they are media companies and operated as such by media people. The most important impact of this is that these blogs are relevant for people who are not looking to move into the neighborhood. They are relevant for people who just live there.

In contrast, most local realtor blogs are completely irrelevant to current residents. As a result, they cannot offer the kind of news, insights, and a feel for actually living in that town that the local media blogs can.

I mentioned in the comments of this post that I really liked Perri Feldman’s NJRealEstateWire site. And I do, so take the critique with that in mind. The problem here is that while I appreciate the site as someone in the real estate industry, I have no reason to bookmark it and visit it as a resident of Millburn — a town that Perri covers. As it happens, Millburn doesn’t have a local media blog like Baristanet, but if it did, I would bookmark it and visit it constantly.

Just as a comparison, look at the top three most recent posts right now on the frontpage of NJRealEstateWire and on Baristanet:

NJRealEstateWire has:

Baristanet.com has:

Is there any question that if I were interested in getting the feel of a town, I would get more out of Baristanet (for Montclair area) than out of NJRealEstateWire (for Millburn area)?

The sad thing here is that the local realtor blogs end up working against its goals: reaching people who are interested in a particular neighborhood and its goings-ons. It’s impossible to brand yourself as a local expert in the community when the local people aren’t reading your blog, and there is no conversation going on.

Look again at the number of comments on Baristanet, and compare that to the number of comments your typical local realtor blog generates. There is no comparison.

What’s ironic — perhaps tragic — about this is that perhaps the local realtor is often best suited to be running a local media blog. As part of her job, the local realtor is going to know quite a bit about the feel of a neighborhood, the shops, the city council actions, schools, in short — what’s going on. But because she aims so much at trying to sell houses and getting leads off her blog, she will end up producing content that most people are completely uninterested in reading.

At the same time, as licensed real estate professionals, realtors are under certain regulations that the non-realtors are not. They have to be careful about what they say or write about a particular area in a way a journalist does not. What to do?

Free Advice

Keeping in mind that advice is often worth what you’ve paid for it, here are my thoughts.

1. Decide what business you are in when blogging

Are you in the home-selling business when you’re blogging? Or are you in the local media business? Decide, then act accordingly. This could mean that you setup a separate operation for your local blogging and avoid tainting it with overt commercialism. Or it could mean that you focus simply on realty blogging, understanding that you will be at a major disadvantage when up against a real local blogger.

2. Create an Ecosystem for your Local Blogging

Since most realtors are actually in the business of helping people buy and sell homes, it doesn’t make much sense to start a second job in local media. This means that realistically, what you need to do is to create an ‘ecosystem’ of local blogs in your neighborhood. Encourage someone to start a local media blog, with both content (you can write about local real estate issues) and with cash (advertise on their local blog). Reach out to other people who may be able to write about one aspect of your town, then bring it all together under one local media operation.

Just because you can’t directly compete with the likes of Baristanet does not mean that you have to cede the real estate advice area to someone else. Become the local real estate columnist and write all about the local market, constantly.

For example, like this.

3. Separate our your professional marketing and your blogging activities

Make sure you have a website for your brokerage operations — a clean, well-designed brochureware/search site that is aimed at those who are looking for representation. At the same time, don’t let your blog become just an advertising platform for your brokerage business. I can’t think of a quicker way to lose credibility than to use your blog to overtly troll for business. This is also the hardest thing to do.

Even we here at Onboard Informatics have issues with this. When you’re passionate about your business, you can’t help talk about it. Our mantra here is to use the blog simply to converse and communicate, but sometimes, we find it hard not to talk about our services and products. So cut yourself some slack, but at the same time, remember to at least try and maintain a Church and State separation.

Local blogging is the next wave. People are inherently more interested in news that affects them personally. But what they want to hear about is local media — news, opinions, etc. Real estate only plays a part of that picture — an important part, but still only a part.

So start talking to your neighbors — form that ecosystem. And give your neighbors (and visitors) what they’re looking for.

-rsh

Written by -Rob

August 20, 2008 at 3:11 pm

On Localism & Future of Online Real Estate

with 15 comments

Ajax and Cassandra

Ajax and Cassandra

Over at my personal blog, I started one of those Cassandra deals speculating on the future of ActiveRain network now that Trulia has launched a blog platform. Since that post went up, I had a chance to sit down with Jonathan Washburn, the founder of ActiveRain, and learned a thing or two. A followup post was necessary. But more I thought about it, more it seemed appropriate for the OnBlog, as my thoughts on the situation are relevant to our clients past, present and future.

First, J-Dub (you Washingtonians ought to get the reference) pointed out that ActiveRain isn’t exactly a slouch in the consumer traffic side of things — as he clarified in the comments to the post, ActiveRain and Localism got 2.3 million visits in the last 30 days, and he said some 80%+ of that is consumer traffic. Second, he charted out a future view of online real estate that is rather convincing. It goes something like this (and I’m probably not doing full justice to his views):

  • Consumers want listings above all else
  • But listings are everywhere
  • Hence, listings are a commodity
  • Differentiation can only come from original content
  • ActiveRain has 100,000 dedicated local real estate professionals who love creating original content, especially about their local market
  • Adding listings to ActiveRain & Localism isn’t the most difficult thing in the world, especially if the trend towards aggregation and syndication continue
  • Adding original content, however, is extremely difficult and time-consuming
  • Therefore, Localism will dominate all

You know, that’s a pretty convincing point of view. Strategically, it’s sound. There is a trend towards listings aggregation and syndication — a trend that is taking far, far too long to develop, to be sure, but one that has the force of inevitability behind it.

However, strategy is only as good as the execution. And this is where I, as a member of Onboard Informatics, can offer some thoughts that are relevant to all of our clients (and future clients). Read the rest of this entry »