Trulia Revenue Model, Part 2
At its core Trulia applies intense competitive pressure to traditional media firms that historically–in the collective sense–bilked real estate firms out of millions–if not billions–of dollars for essentially non-measureable advertising. Sure there’s the one-off case of a person who walks in the front door of a branch office clutching a Sunday advert who actually purchases a home. However, it’s much more likely that a buyer nowadays will visit a firm’s most important branch office–that firm’s website–when beginning a home search. Thus, with its launch, Trulia’s model filled a gaping advertising chasm essentially ignored by traditional media firms (i.e., sending targeted traffic to real estate websites), and these traditional media firms have since been scrambling to catch up (what’s wonderful to observe is that Trulia likely has around 100 employees and it’s seriously challenging traditional media firms for online advertising market-share dominance–REALTOR.com included–that collectively employ tens of thousands of employees. Such is the power of elegant code and focused leadership).
So where does Trulia reside in a modern media mix? As an advertising replacement to traditional media and / or REALTOR.com? For some firms absolutely. For other firms decidedly not. For some real estate firms the decision to go or not go with Trulia (or REALTOR.com, New York Times, etc) has been based on evidence. What evidence? Evidence derived from analyzing the quality of traffic / lead sources: in some cases it makes sense to stay with REALTOR.com, and in other cases to have Trulia replace both REALTOR.com and the New York Times as primary sources of traffic / leads. For the firms described, decisions were made based on data: traffic-source-to-agent-placement ratios, traffic-source-to-showing-appointment ratios, etc. In some cases Trulia won, in other cases it was REALTOR.com that won, and in still other cases it was the New York Times, etc. Nevertheless, it all netted down to what the data showed.
Accordingly, real estate firms looking for marketing solutions should find a set of tools that measures, quantifies, and interprets the data. What this means is that real estate firms need to wipe off the muck of data analytics myopia and embrace the basics: segment prospective consumers based on demographics and decide which set of demographics to serve (recite the old adage “You can’t be all things to all people” when doing this), apply the same analysis for each traffic / lead source (for example, Trulia may deliver higher quantities of urban young professionals, whereas REALTOR.com may deliver higher quantities of suburban soccer moms), determine what traffic / lead sources “convert” at the highest ratio per each segment targeted, apply these findings to the respective traffic / lead sources, and make an informed decision to stay with or abandon such as they apply to the targeted demographic.