Inman

Howard Hanna invests $1M-plus to enhance real estate listings

The nation’s fourth-largest real estate brokerage, family-owned Howard Hanna Real Estate Services, says it will promote its listings on Realtor.com and Zillow because extensive research suggests that exposure on the national listing portals complements the brokerage’s own website and other marketing efforts, both online and off.

Howard Hanna Ohio President Howard "Hoby" Hanna IV said that, all told, the Pittsburgh-based brokerage is making a "seven-figure investment" in separate agreements with the two national portals to enhance its listings and prevent ads or lead forms for other companies’ agents from appearing alongside them.

Those are "new dollars," Hanna said — the brokerage is not scaling back its other marketing efforts, which include direct-mail campaigns and a Sunday morning television show.

As other brokers pull or threaten to pull their listings from national portals over concerns about ads and lead forms that appear next to their listings, Howard Hanna has entered into separate agreements with Realtor.com and Zillow that will keep the listings flowing — but on the brokerage’s terms.

Beginning March 1, Hanna said, Realtor.com, Zillow and three other websites that those sites supply listings to — Realtor.com supplies listings to AOL.com Real Estate and MSN.com, and Zillow feeds listings to Yahoo Real Estate — will be the only national portals permitted to display listings represented by Howard Hanna, which has more than 4,700 sales associates in 134 offices across Pennsylvania, Ohio, New York and West Virginia.

In the local markets it operates in, Howard Hanna will continue to participate in Internet Data Exchange (IDX) agreements that allow participating brokers to display each other’s listings.

Hanna said the agreements with Realtor.com and Zillow were the result of 18 months of research, in which the brokerage brought in outside consultants to evaluate its own website and national portals, removing or truncating listings from some national sites to gauge the impact not only on Howard Hanna, but on consumers.

After informing agents in March that the testing would begin, Howard Hanna began pulling feeds from national sites, or providing truncated listings to the sites with the most traffic.

In addition to Realtor.com and Zillow, "We were looking at Trulia, Frontdoor.com, Homes.com," and other portals ranked by online metrics firm Hitwise as major players in Howard Hanna’s largest markets, Hanna said.

A feed to Trulia.com was truncated, with only one photo provided with each listing. And for a month last year, Howard Hanna stopped sending listings to Zillow altogether — "That got a lot of negative consumer reaction," Hanna said.

The company also conducted a six-month test of enhanced listings on Trulia and Zillow "to see what it would do," Hanna said. The result: "more leads, but less traffic to HowardHanna.com."

National listings portals typically draw more visitors than brokerage websites — even when traffic is segmented by market. Howard Hanna is an exception, ranking among the top five listings portals within its market, Hanna said.

Because of that, some might argue that "they (national listings portals) are our competitors, (so) we should take our toys out of the sandbox," Hanna said.

But national websites can attract visitors who might not otherwise end up on local brokerage websites — would-be buyers from other markets who may not be familiar with a regional or local firm’s brand, or "impulse" buyers who are keeping tabs on their market using sites like Zillow, he said.

Instead of withholding its listings, Howard Hanna, "went out with an RFP (request for proposals) to a bunch of people, saying, ‘We’d like to partner with you, with a couple stipulations.’ "

First, he said, Howard Hanna wanted safeguards to ensure the accuracy of listings data. Second, "We don’t want other brokers being sold advertising space, or ZIP codes, to take leads off our listings."

Besides the obvious implications — ads for other companies’ agents may deprive listing brokers of opportunities to sign up buyers as clients, and in some instances represent both sides of a transaction — Hanna said such ads can create problems for buyers and sellers alike.

"We polled clients, and found that a lot of buyers were confused" when scheduling showings of listings by using a website lead form. "The listing agent would be there to let them in the house, and the buyer’s agent shows up, too. They say, ‘Who are you? I thought we were talking to the listing agent.’ "

The brokerage’s surveys show that sellers, too, want initial inquiries about their home directed to the listing agent, because that’s the person who knows the property the best, he said.

In negotiating with Realtor.com and Zillow, "We said, ‘We have to have the leads go directly to our agents.’ "

"I was pleasantly surprised when Zillow and Realtor.com came back with proposals that met those needs," he said.

On Realtor.com and Zillow, Howard Hanna listings are now surrounded by the company’s branding, advertisements and listing brokers.

That’s particularly true of Realtor.com, which wraps each Howard Hanna listing detail page in a branded "page skin" and provides a banner ad above the listing and another ad for the brokerage’s mortgage company.

On Zillow, Howard Hanna listings appear as "featured listings" at the top of search results for the area in which they are listed. Realtor.com allows users to search for featured listings but does not order search results that way by default.

While Howard Hanna will supply listings directly to Zillow, Realtor.com collects information at the multiple listing service level. That’s why Realtor.com listings in the Pittsburgh market don’t include addresses, which West Penn Multi-List Inc. — the MLS that Howard Hanna belongs to in that area — does not provide to Realtor.com.

(Compare the listing detail page for an eight-bedroom mansion listed for $2.1 million in Pittsburgh’s Highland Park neighborhood on HowardHanna.com, Realtor.com, Zillow and Trulia.)

Hanna said its partnerships with Realtor.com and Zillow reflect two distinct strategies for reaching consumers.

"In our studies, Realtor.com was seen (by consumers) as the industry player at the national level," Hanna said. A family moving from, say, Chicago to Pittsburgh, might not be familiar with the Howard Hanna brand and would start its search on Realtor.com, he said. "If (consumers) go to Realtor.com, they can be directed to us — that was the strategy on Realtor.com."

Hanna said that Zillow is not only a destination site for buyers doing their own research, but has become the go-to site for curiosity seekers.

"Some of the best polling I’ve done has been at Little League games and cocktail parties," Hanna said. "You wouldn’t believe the number of people who would tell me, ‘I’m not in the market, but I downloaded the (Zillow mobile) app to see the value of a house.’

"A friend of mine, her 13-year-old son was looking at houses on Zillow on his iPad. I said, ‘Why do you go to Zillow?’ She said, ‘I don’t know, it’s just where I go.’ "

Not everybody who is on Zillow is looking to buy or sell a house, Hanna acknowledged, but sometimes the information they uncover there will motivate them to act.

"For Zillow, we’re after the impulse buyer," Hanna said. "It’s like our Sunday morning TV show — if they see (a client’s house), they may come across town because it’s the perfect contemporary they are looking for."

The ‘syndication war’

Howard Hanna announced its agreements with Realtor.com and Zillow at a time when some other brokers have been questioning the practice of syndicating listings to third-party sites.

Last fall, Minnesota-based Edina Realty Inc., a HomeServices of America Inc. subsidiary, announced it would stop sending listings to Trulia and Realtor.com, citing concerns about ads and lead forms for competitors appearing alongside of its listings. In January, a small San Diego-based brokerage, ARG Abbott Realty Group, said it had pulled listings from third-party sites for the same reason.

This month, two MLSs dropped Diverse Solutions as an approved provider of Internet Data Exchange (IDX) services for members, citing the company’s acquisition by real estate portal Zillow in November.

"I think it’s important that our industry remembers that everybody has different models," Hanna said.

"I would like to see the industry get back to focusing on the customers — not just the brokers or the agents. It puts us in a better light, and it’s what people want. This whole thing was a study of what consumers want — not just sitting in a boardroom making decisions."

Some observers have suggested that one reason brokers are up in arms about competitors’ ads next to their listings is that it may deprive them of the opportunity to "double-end" deals, representing both the buyer and the seller in the same transaction.

"I think we would all love to be able to get both ends of the deal — making sure both clients are getting great services," Hanna acknowledged. But with both home prices and sales volume down from peak levels, the "more sides we can be involved in, the more tools, programs and systems we can put in place to benefit buyers and sellers," he said.

Hanna cited Howard Hanna’s "Assurance Programs" for buyers, including an "apartment dwellers trade-in" in which the company will buy a client out of a lease, and a "100 percent money-back guarantee" offer to buy back a home for its purchase price, as examples.

One industry consultant, Rob Hahn, declared that with Howard Hanna signing an agreement to continue providing listings to Zillow, "The Syndication War of 2010-2012 is over."

"The other big dogs, if they don’t have that same deal, will be seeking it," Hahn wrote on his blog, The Notorious Rob. "The little guys who aren’t extended the same terms, at the same price, are simply going to be at a competitive disadvantage vis-a-vis the big dogs."

Hanna said, "I’m sure there are some that will look at what we’ve done, and say, ‘How can we get a similar deal?’ I’ve talked to some who say, ‘Can you point us in the right direction? Who do we talk to?’ "

"The size of our company does give us some clout," Hanna acknowledged, when asked if others will be able to swing similar deals.

But Realtor.com President Errol Samuelson said that all of the components of the package purchased by Howard Hanna are available to other brokerages.

"Different companies have bought different combinations, but this is the first time a company bought this complete package," Samuelson said. "I think it’s really compelling — you’re not seeing any competitor branding (around Howard Hanna listing detail pages). This is all about Howard Hanna — their agents, their company."

Asked if Howard Hanna threatened to withhold listings as a negotiating tactic, Samuelson said that was not the case.

"Quite the opposite," Samuelson said. "What’s nice about working with Howard Hanna is (company managers are) incredibly metrics-driven — they know exactly where they are getting their leads and traffic from. They have a very nice website, and they get really good traffic on it. They said, ‘This is our branded local strategy … what is the complementary strategy to address the broader market?’ "

As to whether smaller brokerages would have the same negotiating clout, Samuelson said anyone can enhance even a small number of listings for about $31.50 per listing, so "I don’t think it’s out of anyone’s reach."

"It’s not a situation where only the big guys can play," Samuelson said.

Unlike some third-party sites, he said, by default the search results on Realtor.com are sorted by price, instead of placing featured listings on top.

"What we’re not going to do is skew the search results or mislead the consumer," Samuelson said. "However, within the search results, this package really makes their listings stand out … but not at the expense of the other listings. There are two things you can do: You can try to drown out or suppress everybody else, or you can stand head and shoulders above the crowd."

A spokeswoman for Zillow said in an email that the company is willing to work with other brokers to structure agreements like the one it has entered into with Howard Hanna.

"We have thousands of partnerships with multiple listing services, brokerages and data providers across the country," Zillow spokeswoman Cynthia Nowak said. "Each partnership can be different, and we are happy to work with groups of any size."

As for brokers and agents who are worried that they will be be at a disadvantage to Howard Hanna or other Zillow advertisers, Nowak noted that agents can receive "prominent placement and contacts from their listings as long as they created a free profile on the site."

Once a listing agent creates a free profile on Zillow, that agent’s profile picture, contact link and any applicable consumer ratings appear at the top of the buyer’s agent list that’s published next to listings. In addition to appearing as the listing agent, "the agent receives three free placements on the page instead of one," Nowak said.