They say Facebook's foray into real estate advertising will upset the incumbents. I think they just handed the big portals an advantage instead.
A small story emerged this month about Bayleys Real Estate launching a digital advertising service that will automatically match potential buyers with homes via Facebook.
This morning I read a piece by Mike del Prete (an analyst who's normally bang on the money) and he went much further with the story:
“A seemingly simple announcement - from a real estate agency in New Zealand - represents one of the biggest threats to the global, multi-billion dollar real estate portal industry.” - Mike del Prete
Those are big claims, so I took a delve into the tech docs, and now I'm not sure Mike is right.
In August 2017 Facebook launched Dynamic Ads for Real Estate.
Anyone with a Facebook business page and a credit card can use the system, assuming you can also provide the following:
Most estate agents will have the first - a property feed. This is standard method of pushing property listings to the main portals.
However the second requirement needs close attention: The Facebook Audience requirement is an overlooked detail that turns the story on its head, and passes advantage directly to the portals.
In order to build a Facebook Audience, you need a well used app or a website with lots of traffic. When users take an action (called an intent signal) this information is passed to Facebook by way of some tracking technology.
An intent signal may be when someone performs a property search, views a property, or sends an enquiry to an agent.
These individual signals tell Facebook a lot about what a buyer wants: Price range, location, property type, etc. Subsequent actions allow them to hone their knowledge even further.
They then use this data to make a decision about what other properties the buyer might be interested in (no doubt embellished with lots of other personal data) to match them with other interesting homes.
Voila! Facebook can now intelligently show you properties you might genuinely be interested in.
This is a white hat version of what made Cambridge Analytica famous. It's micro targeted, dynamic advertising - and works extremely well.
To build a viable Facebook Audience requires a steady throughput of "intent signals", and that can only happen if you have a really busy online presence.
The more signals you harvest, the better your data, and the deeper your advantage.
Agents who've nurtured their own websites and kept their marketing diversified could now be in a good position (assuming they can do the tech), but how many agents do that? And how many buyers ever visit an agent's website directly anyway?
In 2018, it's probably a small minority.
Meanwhile portals have all the advantage of vast traffic and huge property portfolios, which puts them in pole position to really get the best out of Dynamic Ads for Real Estate. Portals have audience built-in, and the data volumes to target with laser precision.
Far from tipping the industry on its head, I think Facebook has only cemented the dominance of the big property portals. It seems to me more likely that agents are forced to use portals as a middle man to Facebook's technology.
Maybe that'll change down the line, in some way I can't yet see (?) but this stuff seems so stacked in favour of those with vast data pools, it could be a long wait for meaningful change.
Rightmove won't be going broke anytime soon.