Most people think of Zillow as a website where they can check out how much homes cost — their own house, their neighbors’ houses, and maybe even their dream home.
But as a business, Zillow’s primary target is actually real estate agents. The Seattle-based company makes most of its money selling online ads and other marketing services to real estate agents, who want to be seen by all of those people snooping on home prices.
It’s worked out pretty well for Zillow, which went public in 2011 and recently purchased its primary rival, San Francisco-based Trulia, for about $3.5 billion.
That consolidation at the top of the market is leaving some room for smaller players who think they can chip away at the 800-pound-gorilla’s lead. One of those upstarts is Boston-based Placester, which announced today that it’s raised another $15 million in venture investment and plans to double its staff to about 100 people in the next year. The investment was led by a new investor, New Enterprise Associates, and brings the total raised by Placester to about $22 million.
How can a small company compete with the big dog in online real estate marketing? Part of Placester’s bet is that the real estate sector will mirror changes that have happened on the broader Web in the past 20 years.
Zillow, for instance, is a homepage for real estate online — think of the era of Yahoo, MSN, and other big Internet “portals” that attracted a big audience in the first wave of Internet media.
Placester is focusing on a different strategy, more akin to next-generation media companies that distribute their work through search engines and social media to attract an audience. (It’s no accident that one of the co-founders, Frederick Townes, used to be the technology chief at social-media-focused web publisher Mashable).
Placester sells software that helps real estate agents establish nice-looking websites and stay on top of customer leads, with prices ranging from $10-$200 per month. Placester also helps customers run Google AdWords campaigns, optimize their websites for search engines, promote their businesses on Facebook, and beef up their online marketing materials.
“You want to own your presence,” Placester CEO Matt Barba said. “You don’t want to market on rented ground, and real estate has really woken up to that.”
Real estate is one of those big, fat, lucrative markets that Internet entrepreneurs have been targeting for years now. One thing that has resisted any disruption, however, is the existence of the real estate agent, even though the Web has specialized in wiping out middlemen — just ask a travel agent, if you can find one.
“Our take on it is that you’re never going to buy a home from anybody else other than a human. There’s always going to be a human involved,” Barba said. “These people are entrenched in our society. They provide a critical service. And we need to provide them with the best software.”