What Active Rain should do now

By
Industry Observer with BNN Funding

Hi, I've mentioned quite often that I post sporadically on Active Rain. Why? I am always afraid of being inundated by comments from a very enthusiastic loyal corps of AR bloggers... and I think very highly of the community because of this. My problem is I can only respond during certain hours of the day due to my busy schedule, usually between 9:00 and midnight.

In any case, I did post my thoughts on the Active Rain / Move.com imbroglio over at Transparent Real Estate. Feel free to leave comments (I do learn a lot from them, I just unfortunately sometimes can't reply in a timely manner) at either site.

Here's the first part of my post:

-------------------------------- 

Watching the Active Rain / Move.com imbroglio from the blogosphere sidelines has been fascinating... here's a strategic take on how Active Rain can move forward:

Active Rain's Asset

Active Rain has one asset that differentiates their social network from any other real estate site: it owns the bloggers. This core group of real estate professionals represents the social networking hubs, the influencers that are prized by viral marketing advocates. They are intensely loyal to AR and in aggregate, the voices of these bloggers have been underestimated because the consumer has yet to discover their existence.

If you believe blogs and other Web 2.0 constructs will eventually be adopted as the new marketing platform for agents (and we think so), a real estate futurist has to project when consumers will realize that blogs and blogging agents are go-to sources for their transaction needs. From this perspective, AR's management may be premature in selling AR because the market that will develop between the bloggers and consumers hasn't happened yet. Facebook's Mark Zuckerberg famously did not sell out to Yahoo for $1 billion last year, and then re-created Facebook this spring with its wildly successful F8 platform and established legitimacy across the masses beyond its college ranks (and now it's contemplated to be worth about $10 billion ).

AR may potentially evolve as a smaller real estate Facebook story - leverage their network by providing the membership with ways to develop lead generation and revenue opportunities, and traffic will increase. But it does have a few hurdles to overcome.

Active Rain's Challenges

1) AR owns the bloggers, who owns the content?

A lot of commentary running through AR on this, but I consider this is a non-issue as long as AR sustains credibility with bloggers (and I think they will based on history). The mutual and beneficial co-dependence between Active Rain and its authors will continue to provide value for both sides: for AR, enhanced value based on traffic and for the bloggers, online presence and potential lead generation.

References:
Reaping The Fruits Of Others’ Labor? Or Adding Value To It? - 3Oceans
Elephant in the Rain - CEO Jon Washburn's response to AR's relationship with its network

Here are the four main problems facing AR that need to be addressed in order to qualify for expansion capital. It goes without saying that AR needs to address the standard criteria universally used for venture capital investment - business model, traction, competition and management.

2) Developing the proforma revenue model - all RE 2.0 properties from Zillow to Trulia grapple with the dearth of immediate cash flow and are on spec with their investors to eventually monetize on advertising as opposed to transactional revenue. What's important is the direction of the business model, and AR needs to address how to build the consumer traffic that will create the demand for advertising from RE professionals who want to access consumer leads. I should mention that sites like Realtor.com and Housevalues have been able to demonstrate preferred ad placement and lead selling revenue models, but are not proving that these models will be acceptable to agents going forward as less costly Web 2.0 alternatives are adopted (see Housevalues stock price chart below).



3) AR needs to augment their relatively puny consumer traffic. The Quantcast comparison graph below illustrates what real estate bloggers already understand - consumers comprise an overwhelming majority of traffic to real estate sites but they still don't know about the existence of blogs and bloggers, including Active Rain.



4) Management - Although AR's management deserves kudos for successfully creating a compelling and growing network property, the latest faux pas with Move.com exposes some management inexperience. I'm all for transparency, but even the online exposition of lawsuit documents puts both management teams in questionable light. Venture capitalists tend to invest in proven internet startup management, and will want to reshuffle management. Investors also shy away from dirty laundry.

Reference: Where's Caleb? - is an indication that AR has been great training for greener pastures.

5) Competition - forget the new real estate social networking sites that are popping up everywhere... the biggest Real Estate 2.0 fish - Move.com with their blog platform,  Zillow and Trulia with their Q&A products - and soon, the brokerages will play the blogging/social networking game and capture "market share" of bloggers away from AR.

--------------------------------

 In the second half of the article over at Transparent, I discuss what Active Rain should do. Please continue there... (thx!)

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Tags:
active rain
movecom
zillow
trulia
web 20
real estate 20
social networking

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the car to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the pencil to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
567,091
Cheryl Johnson
Cheryl Johnson, Bob Taylor Properties, Inc., Los Angeles, CA - Highland Park, CA

Pat -- Whatever you wrote over on Transparent, must really be "transparent"  I keep getting this -- both in FF and EI7  <s>  Maybe later today, I'll be able to see and read it.....

October 01, 2007 08:44 AM #13
Rainmaker
182,148
Janet Guilbault
RPM Mortgage, Alamo Home Office - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender
Me too, I can't get the second half to appear. What's the deal?
October 01, 2007 09:43 AM #14
Rainmaker
50,552
Patrick Kitano
BNN Funding - San Francisco, CA
Pardons, my hoster GoDaddy has Transparent somehow down right now... I am working on it...
October 01, 2007 09:48 AM #15
Rainmaker
258,989
Chuck Willman
Gentry Realty - Mesa, AZ
Realtor - Arizona - 480.292.0600
Excellent and thourough post. I hope this went straight to the top.
October 01, 2007 10:24 AM #16
Rainmaker
50,552
Patrick Kitano
BNN Funding - San Francisco, CA

Transparent RE seems up for now...  

Thx for the feedback all!

October 01, 2007 10:40 AM #17
Rainer
5,408
Dwight Wolfe
Emerald Coast Realty, Inc. - Panama City Beach, FL

Patrick - I was thinking more of equity ownership, sell stock to AR members.  I guess that would end up as equity-coop?   I just think there is so much opportunity here and how unfortunate that almost no one here is even considering this as something they/we (AR Community) should be thinking about.  And considering how bad NAR, MOVE, and REALTOR.com have managed things for us as real estate professionals, I seek and search for the emergence of a new organization that will truely have our best interests in mind.  Wishful thinking I guess. 

Great to hear that you are/were an Investment Banker.  I will look forward to talking / blogging with you in the future.   THANKS !

 

October 01, 2007 02:30 PM #18
Rainmaker
567,091
Cheryl Johnson
Cheryl Johnson, Bob Taylor Properties, Inc., Los Angeles, CA - Highland Park, CA

Pat -- I got it now.  I haven't visited Transparent live for a while.  Looks like you've redecorated a bit since my last visit.  <s>  Looks good!

Yes, for AR to be a useful destination for consumers would probably take a redesign.  Unfortunately some of the redesign would probably cause it to lose that easy comfortable feeling that has made it such an accessible place for agents to gather.

October 01, 2007 03:13 PM #19
Ambassador
895,326
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Realtor - Ann Arbor Real Estate

Patrick, I'm off to read your post on Transparent RE, one thing I noticed in your post.........Facebook held out and got more. I believe that is the strategy the owners of AR should take note of.

Blogging for my broker.............nope...never gunna happen. I'm stupid but not that stupid. Besides I've only got a few agents in my office to do profiles. LOL

I would invest in AR if someone came up with a plan, absolutely. Regardless of what people think over at bloodhound, more than 500 members contribute here and we love it !!!  If you've followed all the post here, everyone wants the owners of AR to make money............just not with Move

Thanks for posting here.

October 01, 2007 07:18 PM #20
Rainmaker
50,552
Patrick Kitano
BNN Funding - San Francisco, CA
Hi Missy! Thanks for your enthusiastic ping... I think your words speak volumes about the loyalty of the AR network.
October 01, 2007 07:34 PM #21
Rainer
5,408
Dwight Wolfe
Emerald Coast Realty, Inc. - Panama City Beach, FL

Missy -  See my reply on this page, I am the 5th one down.

Patrick -  I may have found my first ally with Missy.

Thanks for you other responses, 1, 2 & 3.  As far as asking agents for money, we have all dropped a lot of money on 'vendor' products that did not perform.  So I guess we are a little skeptical. 

Is Transparent Real Estate your own site?

October 01, 2007 07:58 PM #22
Ambassador
895,326
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Realtor - Ann Arbor Real Estate

Dwight, I've been reading your posts and comments everywhere, but I have yet to see a plan. The kind of money Matt and Jonathan can make we can't come close too. Invest yes, but no where near what this place is worth.

http://activerain.com/blogsview/198117/Because-of-Activerain-I

Sorry Patrick for chimming in.

October 01, 2007 08:04 PM #23
Rainer
32,716
Beth Butler
Beth Butler - Big Mouth Consulting - Miami, FL

Pat - thanks for the mention of our broker blog.  I thought your post was well thought out and right on point. 

I do want to respond to the notion that someone blogs for their broker - they don't.  Agents blog for themselves, question is on what platform.  A company blog, much like AR provides a simple platform for the agent to get the SEO benefit from blogging without having to reinvent the wheel or make an individual long term effort to build recognition of their own site. 

Companies, unlike AR, have spent millions of dollars and many years to build a recognizable brand in their respective local markets - this is advantageous to any of the agents that are associated with that brand. 

AR is full of bloggers that hung around for a couple of months and then dropped out.  Blogging is a commitment that many agents do not have the time, the inclination, or the skill to make it a successful tool in their business. (In fact, I think you posted something similar) Larger platforms aggregate the effort into one collective push, lightening the load for any one individual blogger.  Kudos to those out there, like Missy, who have been successful on their own - it is not something that most agents can or will undertake successfully.  Building readers and viewership is an uphill climb for even the most dedicated bloggers. 

As to the content and who owns it... I would guess the answer to that is as varied as the platforms themselves.  In our case, agents are free to duplicate the content if they leave.  

Sorry for hijacking your post... but you did invite me in ;)  Thanks 

October 01, 2007 08:19 PM #24
Rainmaker
50,552
Patrick Kitano
BNN Funding - San Francisco, CA

Hi Beth,

 The EWM blog is fine for developing the SEO and traffic profile for a broker blog... and you're right, a blogging agent is really doing it for their own marketing and online presence. I applaud EWM the broker for their foresight in developing an SEO property.

 I should mention that there is another way to construct a multiuser broker blog so that each agent gets their own blog property, whether on their own domain name or even on Active Rain. The "uberblog" broker website is layered over the individual agents' blogs similar to EWM and the individual agents' articles get excerpted into the uberblog.

 We're developing these uberblog broker websites in the SF Bay Area now. Why is the blog architecture better? Agents continue to blog for themselves and develop their blog property that will last them their entire careers, while getting the same SEO and traffic benefit from traffic that is flowing through the uberblog directly to their blogs. I understand explaining this architecture is difficult because it hasn't yet been seen.

 In laymen's terms, if an agent blog for the EWM blog and they decide to leave EWM, they have no individual blog to show for their work. With the construct I'm explaining, agents can take their blog with them if they leave the brokerage. Our first example of the uberblog will hopefully launch around the time of the California Association of Realtors conference on October 8. I'll keep the network filled in because this will be revolutionary.

October 01, 2007 08:34 PM #25
Rainer
32,716
Beth Butler
Beth Butler - Big Mouth Consulting - Miami, FL

Hi Pat:

Love the idea of the uberblog and certainly see it's potential.  Having done the broker blog thing, I totally understand where you are going with this and it is brilliant. I guess the real difference between the two is branding vs content ownership, personally I see both models have much merit.  Now where does that leave AR?  Thanks for your support of our efforts.  Maybe someday we will get a chance to compare notes.

October 01, 2007 08:53 PM #26
Rainer
188,414
Laurie Manny
Long Beach CA Real Estate - Long Beach, CA

Patrick,

A little peek into the future.  If Broker Blogs become the next step, you will witness a major portion of blogging Realtors getting their Broker licenses and breaking away from the large companies, it is already starting.  Why would Realtors want to build Broker brand blogs SEO, or send leads to them by blogging on their system?

Looking into the future beyond this lonely step in the chain I see Brokers, not unlike several now, selling these same Realtors back their own leads for 35% referral fees over and above the cut they already earn.  Sound familiar?  

What I find disturbing about this entire episode is that NAR's shadow looms over Realtor.crap and Move.shlock.  Monica McGillicutty posted about a trip to NAR several months ago, how to handle bloggers was on the agenda, but was shelved until the November meeting.  Funny timing there.   Bloggers do not want to be handled. 

Blogging has had an incredible affect on the real estate population nationwide.  Among other things it has liberated us in ways that were never possible before.  I don't think a reigning in will be tolerated.  

 

October 01, 2007 11:52 PM #27
Rainmaker
50,552
Patrick Kitano
BNN Funding - San Francisco, CA
Yes Laurie, brokers no longer offer value to an independent agent... you're a testimonial. We're telling brokers that providing an "uberblog" platform (read third comment up) does two things: it generates good will / unpaid lead traffic to your blogging agents who have their own blogs, and two, allows you to recruit more blogging agents who want to have the benefit of an uberblog helping to direct traffic to their blogs. We tell brokers don't be disingenuous... agents don't want to blog for your broker site to pay you for leads...
October 02, 2007 02:11 AM #28
Rainer
32,716
Beth Butler
Beth Butler - Big Mouth Consulting - Miami, FL

Laurie  - guess I must be doing something wrong on my broker blog - leads are going directly to the agent.  Never even considered selling leads back.  We don't do that on our website either. The only thing we parcel out is IDX leads.  I realize I am on my own little island down here, but we can't be the only ones who have this policy.  

 

October 02, 2007 07:15 AM #29
Ambassador
895,326
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Realtor - Ann Arbor Real Estate
Beth, Laurie. Our brokers in Remax do not require any referral fees on the leads we get from any remax.com. site, local, regional, national. The leads come to us, no referral fees. So Beth you are not alone. I think more of the traditional companies ( in my area ) do that. But, I know here Prudential does require a referral fee of 35% then the normal broker split because of their partnership with Yahoo. . Even on their own listings, which is why Prud wasn't an option for me, 2 years ago when our former franchise owner did not renew.
October 02, 2007 07:32 AM #30
Rainer
32,716
Beth Butler
Beth Butler - Big Mouth Consulting - Miami, FL
Thanks for sharing Missy - I am sure there is a good cross section of both practices.  Since this post is really about revenue models it does provide a little insight into one facet of revenue sources for brokerage companies... referral fees, splits, desk fees, etc.- there are as many different practices as there are companies. 
October 02, 2007 07:46 AM #31
Rainer
188,414
Laurie Manny
Long Beach CA Real Estate - Long Beach, CA

Beth and Missy,  I know that Remax passes leads through without a fee and I appreciate that Beths company does as well, it is not those models that I was addressing.  Missy hit it on the head, I wasn't going to mention names, and they are not the only broker taking excessive fees whenever possible.  

I feel that blogging is personal, between the Realtor and the consumer.  While I understand broker involvement in trying to inspire their agents to blog, it just seems to me that the broker should not be between them.   I also understand that it will take broker involvement to make that happen or in some cases a cattle prod. 

Vendors and brokers have had their hands so deep into Realtors pockets I guess I am just a bit sensitive about it.  It is one of the things I like so much about blogging and AR.  We can get our message out for free and get it out loud and clear.  

October 02, 2007 12:55 PM #32
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the man to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
50,552

Patrick Kitano

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cat to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: