Mass Media and Real Estate Must Completely Change Their Business Models
May 28, 2008
Any reader to Transparent Real Estate will understand that I believe the media business and the real estate industry are intimately connected because marketing a home requires local, sometimes national, media exposure.
The internet is destroying old media’s tried and true way of marketing the home through their classified advertising business model. In turn, real estate professionals understand the diminishing efficacy of print ads and are shying away, waiting for their local newspaper to serve them with a better marketing solution.
Both sides are in limbo… both sides need to understand they are entering a completely changed relationship. Real estate professionals must serve up the content (via blogs and social media) to replace old media content being produced by dwindling reporter staffs - this is how they will market themselves. In turn, old media must create the content delivery platform to market the content being served to them to their consumer audience.
Both sides win… and yes, advertising continues to be sold in the new media because it is one of the most efficient ad platforms today. But neither side gets it yet.
Old media is like the real estate industry, they don’t know how to deal with an internet that provides content and information that they once controlled. I excerpt Techcrunch’s Erick Schonfeld fine article:
Yet industries that are used to control don’t like to give it up. Old media is like that. Even in this day and age, its struggle with control issues continues. Old media knows the relationship with its audience has changed, but it is still not quite sure how to deal with it.
To illustrate what I’m talking about, let me share two anecdotes from last week. On Wednesday, I attended the Mediabistro Circus conference, along with mostly other New York media professionals. One repeated theme I noticed a few speakers bring up was that to succeed on the Web it is necessary to give up control.
This was delivered as a revelation, even though industry watchers have been observing this for the past few years. Yes, the audience (gasp) talks back, and they often prefer talking to each other than simply consuming the news that media professionals decide to dole out.
I guess change takes a while to sink in. But it struck me as odd that something like this still needs to be explained. The other folks attending the conference, from what I could gather, were largely from the digital divisions of newspapers, magazines, and other broadcast media. Was it really news to any of them that to engage an audience online, you have to let them comment, vote, editorialize, and even select what stories get highlighted?
I don’t think so. But there is a difference between knowing something, and being able to do something about it-in this case changing your own ingrained habits and convincing colleagues (many whom grew up in the broadcast era) to do the same.
Now, contrast this group with the Web entrepreneurs I was hanging out with on Thursday in Toronto at the Mesh conference. Nobody needed to explain to them that to succeed on the Web they should stop trying to control the message or the audience.
Maybe that’s because they are not trying to control the audience in the first place. Rather, it is the exact opposite.
Some of them are too busy creating the very tools that allows people in the audience to cover events themselves and broadcast their own messages.
While others have helped to build entire businesses around giving the audience more control.
The last sentence is the most revealing - giving the audience more control is what consumers want in their relationship with the real estate industry.
No matter what you think of Zillow, Redfin or HomeGain, these businesses are positioning (or repositioning) themselves to give the consumer more control, and that is what the consumer will respond to.
About the Author:
Pat Kitano authors Transparent Real Estate. He's currently a Principal of the Domus Consulting Group, a management consulting firm working with real estate brokerages, media companies and Web 2.0 companies to develop technology marketing strategies, and with venture investors on new business models.
Since graduating from Cal Berkeley (Geophysics) and Columbia University (MBA), he's been involved in four competitive industries - films and new media, investment banking, internet technology and real estate. He lives in San Francisco.
Guest posts - Real Estate 2.0 Vendors and Changing the Rules of Mass Media…
I’ve been focused lately on the implications of Web 2.0, social media and Twitter on real estate, and by extension, online business marketing. I want to refer readers to two guest posts this week: At HomeGain blog:HomeGain evolves with Web 2.0 - the …
[...] Mass media and real estate must change their business models. Pat Kitano argues that both real estate professionals and old media need to address the impact of the internet and the diminishing efficacy of print advertising. Hello new media. Read more at Real Estate Radio USA. [...]