by Jessica Swesey
Inman News
Enter the keyword “homes” into a search query in Yahoo! and you will find New Jersey-based Weichert Realtors, which also appears as a sponsored link on Yahoo! Real Estate.
Once a vein for the geeky online real estate companies, the search business has become a popular source of leads for traditional real estate companies who are paying substantial advertising dollars for keyword searches and sponsored links to take advantage of the millions of online leads.
“We’ve seen a nice overall increase in visitors to Weichert.com as a result of our pay-per-click marketing strategies,” said Bret Violette, president of Weichert Interactive Web operations. Weichert is a privately owned real estate company with more than 200 company-owned and franchised offices and 10,000 sales associates.
Millions of Web surfers use Google, Yahoo!, MSN and AOL as the online starting point for their search for real estate companies and information. In fact, 80 percent of Web searchers start at one of those portals or search sites, according to a study by U.S. Bancorp Piper Jaffray.
Many Web users still type destination URLs directly into the Web browser when they log onto the Internet, but searching is second only to sending e-mail among the most widely used Web applications, and Internet users in the United States conduct about 245 million searches online every day, according to the Piper Jaffray study.
Google alone logs about 6 billion searches monthly and Web users will conduct 500 million realty-related searches over the next year, predicted David Scacco, vertical markets group director at Google.
Yahoo!’s sponsors use Overture, a paid-placement advertising program in which subscribers bid for placement in Internet search results the company distributes to MSN, Yahoo!, CNN.com and InfoSpace, among others.
Paid searches are the main mechanism by which the portals send real estate-interested traffic on the Web. In fact, these programs are growing and fast becoming the Yellow Pages of Web search results. For example, a home shopper who puts “homes for sale” into Google’s search engine would see online real estate companies HomeGain and ZipRealty in the sponsored links sections at the top and right side of the results page. Those results appear because those companies pay for that placement in the home search results.
But type in “San Francisco real estate” or “Baltimore real estate” or any other combination of local real estate terms and a raft of local agents and brokers will pop up.
Take the 11 Green Street Coldwell Banker sponsored link on a Google search of San Francisco real estate; it directs users to a form, which will give home buyers e-mail alerts of new home listings in the San Francisco Bay Area.
A Google keyword search for “Oakland homes” returns sponsored links to Oakland, Calif.-area Realtor Michael Friedman and Prudential California Realtor Scott Thompson, among others. Friedman, an agent in nearby Berkeley, Calif., started paying for placement in the search results page nearly two months ago. He noticed an increase in the number of people visiting his Web site after he started advertising on Google, but he hasn’t tracked the origins of his Web site traffic.
At the national level, LendingTree, an online exchange that helps borrowers find lenders, commands are large part of the key word search business. The company believes its presence on the Web portals is as important as its television and radio ad campaigns.
“As part of our overall marketing strategy, we certainly want to have a presence on the portals,” said Dierdre Alexander, senior director of strategic account management at LendingTree.
The portals’ revenue from paid search programs has grown significantly and that gives the portals a lot of power on the Web. Paid search revenue totaled $1.4 billion in 2002, and is expected to expand to $7 billion worldwide by 2007, according to the Piper Jaffray study. That suggests the number of companies competing for advertising space on search results pages will increase significantly and that could make the space more costly to purchase.
Google’s paid search program has grown from just a handful of advertisers a year ago to more than 100,000 today, according to Scacco. He said real estate and real estate-related advertisers are among the fastest growing segment of Google paid search advertisers this year.
Very few national brick-and-mortar real estate companies show up as sponsored links on Web portals. A glimpse at Yahoo!’s real estate page turns up such Web-based companies as LendingTree and AgentConnect. But the likes of Washington Mutual, Century 21 and Coldwell Banker are missing.
Local real estate companies are much more active, buying local terms. The bulk of Google’s real estate advertisers have been Web-based companies and individual brokers, according to Scacco.
AOL real estate-related searches produce links to the online company Homestore, which has an exclusive relationship with AOL.
Google’s paid search advertising program gives small and large companies the same opportunity to advertise on a search results page, since one of the two ranking criteria is ad relevancy. However, competition still occurs because advertisers who are willing to pay a higher per-click rate and who also have highly relevant ads will rise to the top of the sponsored links rankings.
Competition for paid search space on the four most widely used Web portals could become fiercer if more traditional companies decide to advertise on those Web sites.