For more than a decade, Zillow has been a giant in the real estate ad space, but Facebook, armed with a massive audience of 2 billion users, is poised to jump into the pool.
According to a report by Pymnts.com, Facebook is launching “Dynamic Ads For Real Estate,” a new advertising feature that could pose a challenge to Zillow’s positon in the real estate advertising segment. The Facebook product integrates real estate firms’ existing listing data into the Facebook advertising platform. The ads would compete with Zillow’s product, which allows real estate agents to advertise to prospective homebuyers and sellers on its site, according to the article.
Keith Watts, the head of real estate and financial services at Facebook, said it is using targeting technology similar to Amazon’s to display user-specific real estate listings as people utilize the social media network.
“Real estate is an area we’re betting big on as a company. I think there’s a lot of ways that we can help the industry in general.”
Facebook claims the service is perfect for brokerages with at least 100 listings on their website. Watts said it should be in their sweet spots.
“For the folks that can have that amount of volume, we think it’s going to work really well — and once it’s set up, it’s pretty much automatic, you don’t have to spend a lot of manpower to keep the system up and running.”
Don’t expect Zillow to fold under competition. It posted second quarter results that exceeded expectations with marketplace sales up 30 percent year-over-year, real estate revenues up 45 percent year-over-year, and display and growing at 9 percent a year. Zillow’s stock price is up 10 percent in 2017. Spencer Rascoff, CEO of Zillow Group, recently told investors that and advertisers/agents view us as an effective way to buy Facebook advertisements, more effective than from buying it directly from Facebook.
“In the case of either of these horizontal players, I do think it’s very difficult for horizontal players to compete with vertical companies that are focused on the vertical and have as big a brand as our family of brands have. And I do think it’s also important to understand how this ad product that we have differs from other ad products. We saw an ad product that connects the consumer with the real estate professional at the time and place that they’re shopping for a specific home. That’s very different from Amazon’s rumored directory of real estate agents or Facebook’s ad product that tries to drive traffic back to a brokerage website. So, a lead generation product that’s tied to a home search is quite different, and I think will always be more attractive to an advertiser than a branding ad product or a product that tries to drive traffic to their website. So those are some of our concluding thoughts on our ability to compete with horizontal players.”