I like Roost. The search experience is really good — at least until the user is redirected to a brokerage site, which is, in most cases, pretty jarring. The company also provides a nice example of what can be done with IDX when serious UI talent is in the picture.
Congratulations are in order for Alex Chang and his team.
But I have some questions.
First, is now a good time for brokers to make CPC/CPA buys?
The latest research from CAR and NAR show buyers are taking a lot longer to browse for homes before contacting an agent. That's months of paying for clicks with a fairly low conversion rate. With syndication to the point of ubiquity nearly free, selling clicks that are no more qualified than referrals from listings aggregators — even through an IDX site that is technically the broker's — may be a tough sell.
Unless the volume is tremendous.
Which brings me to my second question:
Does Roost have the ability to drive the traffic needed to expand the network both horizontally and within markets to a point where they become a market-leading solution?
The company has talked a lot about the coverage benefits of their IDX-based solution versus broker feed-based sites, but said almost nothing about traffic. But I think it is safe to assume they lag far behind the category leaders.
HomeGain did well selling clicks. They grew to be a large, profitable company and had a successful liquidity event. But they had 5 million uniques each month. It is unclear to me how Roost gets here.
Last question: Will the limitations of IDX ultimately outweigh the benefits?
While the upside of an IDX search experience is clear (I've written many times about its benefits), the limitations from a business perspective are pretty daunting. Fields are limited. The content that can be displayed with it is too. There's a reason Trulia and Zillow went the broker feed route. Avoiding these impediments is one of them.
Practically speaking, this limits what Roost might do to address the traffic question. The widgets, content and link structure that have been key to Trulia's kick-ass search engine effort are largely off-limits to the company.
Moreover, the tension between stickiness and referrals most online real estate sites face (meaning, the judgment as to how long a site keep can or should keep the visitor engaged before sending them off to the listing partner) is very taught. Unlike Zillow, for example, which offers basic listings display for free, and thus has wiggle room to monetize the user through ad impressions, Roost is getting paid for clicks. That means traffic-building content and fora don't make a lot of sense.
That's what comes to mind for me. I would love to be convinced that I am off base on all of this because, lord knows, we could use a few happy real estate stories.
– Brian Boero
Sign up for the 1000watt Spotlight e-newsletter
and keep up with the ideas, apps and people that are changing real estate.
20 Tools to Bring your Real Estate Business to the Cloud
A mist of difference
Freaking...
Thanks Brian – we like you too! Here is my take on the good, thought provoking questions you raise.
Yes. Yes. No.
Without going into a long response. I’ll leave you with some teasers:
- The fundamental reason we are getting traction (growing our footprint, retaining/signing up new clients and attracting investment capital in the worst fundraising climate since the stone age) is that our broker partners are seeing success with our platform. In this market it is all about accountability
- Despite the fact that our model is CPC based, most of our partners measure their return on spend with us in terms of CPL (Cost Per Lead) and lead quality. I’ll give you a peek behind the curtain on that issue. Of the leads generated off of Roost traffic, over 50% are valid requests to “Schedule a Showing” of a home – these are obviously very valuable in today’s market
- IMO smart brokers will have a new marketing mix going forward. Syndication and CPC/paid search (which serve very different purposes IMO) will both be part of that along with some other things we haven’t seen yet. But all of them will be significantly more accountable than the offline media that brokers are trying to break away from
- It is nearly impossible for services outside Roost to know how much overall traffic Roost is getting. Because at the end of the day it is a network of individual sites/domains. Suffice it to say that there is no need to worry about our traffic
alex
Alex – thanks for the response.
Regarding measurement, your brokers may measure cost per lead, but they are still paying for clicks too, no?
I could not agree with you more on the move from print to more measureable ad spends.
I will take your word for it on traffic, but since you can't share details my question remains.
Congrats again, and best of luck in '09.
Roost is an intresting company. I wonder what the close ratio is for leads? Or what is the average cost per lead to the broker?
Roost is an intresting company. I wonder what the close ratio is for leads? Or what is the average cost per lead to the broker?