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HomeAdvisor As Web Business Advisor

At the recent PRSA Tech 2002 symposium, MSN HomeAdvisor Product Manager Matt Heinz described how Microsoft has leveraged the Internet to “webify” the traditionally offline real estate industry. By helping implement online technologies to meet the expectations of tech-savvy homebuyers and sellers, the HomeAdvisor Website has played a formative role in how each of us can go about locating, buying and selling a home. One of two major online real estate hubs, (the other being the National Association of Realtor’s Realtor.com), HomeAdvisor has become one of the most trusted names in online real estate.

Managing the product demands a broad range of marketing initiatives geared to both consumers and real estate professionals. Matt Heinz is definitely up to the challenge. Prior to joining Microsoft, Heinz was a senior public relations account executive at Shandwick International, where he worked with several real estate and technology clients, including HomeAdvisor, HomeGain, eCommission and Microsoft’s Digital Media Division. Before Shandwick, Heinz held various communications positions, including work with The Boeing Company, the Seattle Mariners, and the Washington State Attorney General’s Office.

Seattle24x7: Matt, how has HomeAdvisor broadened its appeal over the years?
Heinz: HomeAdvisor has greatly expanded its scope. In 1998, we were very focused on the buying and selling of real estate, finding a loan, finding information about neighborhoods. Today it looks very different. It’s become more of a Home and Real Estate portal and it’s set up a lot more like a magazine. Everything about the home whether it’s food, cooking, decorating, home improvement, pets, hobbies, you name it, is part of HomeAdvisor now. So the scope of HomeAdvisor, and the business model for HomeAdvisor has increased fairly dramatically.

Seattle24x7: Has your real estate focus changed?
Heinz: The role of real estate on HomeAdvisor really hasn’t changed that much. From a business perspective the number of page views and impressions, the users that come to HomeAdvisor for real estate content, still remains strong. The real estate content still anchors what we do. Working with real estate agents and working with the real estate industry still is just as important to us as it has been.

Seattle24x7: How were you able to acquire the coveted real estate Multiple Listings?
Heinz: In the beginning, we had to go out to the hundreds and hundreds of multiple listing services around the country and convince them that they should be marketing these listings on the Web. These are the same companies that have traditionally printed books for realtors. Ten years ago the realtor’s business was built on the fact that they had this MLS book. They had all the listings themselves. You couldn’t look for a home unless you wanted to drive around and find one. Now all the listings are on the Web. You can go to a HomeAdvisor, you can go to a Realtor.com, and you can look for these listings yourself.

Seattle24x7: The transformation seemed to concern an awful lot of realtors. They must’ve been wondering to themselves now that all this information is on the Web, how do I continue to stay in business?
Heinz: There’s been a number of studies that the industry’s done itself to measure the value of traditional advertising like fliers, street signs, newspaper ads and measure that against how many consumer are going online, how many are going to MSN, how many are going to Realtor.com, and what they’re finding is that a lot more people are going to the Web to start to search for a home, and to start to search for a realtor.

They’re also finding that people who start with the Web are spending less time looking for a home, spending less time with an agent, but spending 35% more on their home. So if you’re an agent, you spend less time with the customer and you make more money. That’s pretty compelling . Realtors on HomeAdvisor have found that Web marketing is helping them gain more customers, faster, and at a lower cost.

Seattle24x7: Historically, though, Microsoft’s market entry met with some industry resistance?
Heinz: Right before Microsoft announced the intention to build a real estate channel, the president of the National Association of Realtors gave a speech in which he basically talked about technology in general and said, “Beware of the lion over the hill, because “the lion over the hill” will come and change this industry forever.” He was speaking in general, but timing is everything. A couple of weeks later, literally, Microsoft announced that they were going to launch an online real estate site. Guess who became the lion? This has haunted Microsoft and HomeAdvisor basically ever since as people compare us to this “lion over the hill” speech.

Seattle24x7: They felt Microsoft was going to disintermediate the realtor?
Heinz: In Bill Gates’ first book, “The Road Ahead,” on page 169, there is a section where Bill talks about middlemen, talks about the fact that the Internet and technology will eventually replace the need for middlemen which will create value for the business side and the consumer side. Every industry, it seems, every virtual industry, every service industry has read this part of Bill’s book and decided that this means Bill is directly going after their industry. At the same time, NAR, the National Association of Realtors, was working with a site called Realtor.com to make it their official site. In the process of doing so, the association basically convinced the industry that they only needed to have their listings on Realtor.com.

Seattle24x7: In 1997, you had very few of these folks who were actually using technology.
Heinz: Maybe 10% were using Email, 20% were using computers, 25% were using the Internet. When Home Advisor launched in 1998, we had almost a quarter-million listings. This was approximately 1/6th of the market at the time. There were early adopters out there who wanted to take advantage of the Internet, but an awful lot of folks didn’t because they didn’t see the value of working with the Web, or they were working with Realtor.com and didn’t necessarily want to work with Microsoft. Today, it’s a different story. Today we see a lot more realtors using E-mail as part of their business, and we see a lot more folks getting business from the Web. Not only are they starting to use these products more, they’re starting to see the direct value of the Web as a marketing medium. Currently HomeAdvisor has more than 1.2 million listings, 92% of the market.

Seattle24x7: How important has PR been in your marketing efforts?
Heinz: When HomeAdvisor was launched, we needed to increase listings and to do that we needed to have a strong industry presence. One thing we set up early was the Microsoft Real Estate Advisory Board. We said, look, we are going to build a product that you’re eventually going to want to buy into. Our product is similar to those of competitors of ours, both online and offline. We want to have you involved in this type of discussion so we can learn from you what you like about them, what you don’t like about them, how we can eventually build a product that you’re going to like. Another [PR] thing we have done was really heavy news bureau. Any time a new broker signed up with us, or we entered a new market, we’d do a press release.

Seattle24x7: What other communication tools have you used?
Heinz: We also produced a newsletter, HomeAdvisor News. We now have an E-mail version of it which goes out to around 180,000 people; partners, prospects, people that dropped their cards into fishbowls at different trade shows. The cost is extremely low compared with actually having to print and mail various newsletters. About 6 months ago we launched a Realtor newsletter. There are 820,000 realtors across the country and we don’t exactly have a large sales force built up, nor do we really want to have a large sales force built up. Our newsletter works to get people to sign up. It’s not necessarily a hard pitch, but it gets people more familiar with what HomeAdvisor is all about. We also used MSN to set up a discussion forum with realtors. Essentially, we got set up as a community manager, set up a forum for realtors to discuss various topics. We can then send E-mail out to all the people on our community list.

Seattle24x7: Who is your competition?
Heinz: From the beginning, HomeStore.com has been HomeAdvisor’s biggest competitor. It has an interesting history to it. A number of years ago, the National Association of Realtors tried to build its Web presence. It spent millions of dollars trying to do it. It didn’t work out very well. A gentlemen by the name of Stuart Wolf said, hey I’ll build you a Website if you give me exclusive rights to it. That became Realtor.com. Realtor.com became a company called RealSelect which went public and became HomeStore.com. HomeStore.com has seen its stock price fall to around .73 cents a share. They’re still a competitor of ours. AOL today gets most of their listings from HomeStore.

A couple of things could happen in the industry, and the whole thing falls apart. If HomeStore goes away what happens to the official [NAR] site? What does that mean for AOL? Does AOL then take it over? What does that mean for us? How can we take advantage of that gap? How can we leverage that opportunity with our customers, and with the realtors as well?

Seattle24x7: What features do people like best about HomeAdvisor?
Heinz: As we launched a lot of the home ownership content, we found that that has become a lot of our most popular content. The Food and Recipes section just goes through the roof during the holiday timeframe. Emeril Lagasse is one of our food experts, and we’ve got his recipes and content Q&A.

Depending on the time of year, different content has different levels of interest. Right now [in springtime], we are getting more traffic in our garden section, home improvement will start to heat up in another month. As far as real estate content, the industry typically sees two hot spots. One in the spring as the snow thaws out and people get out and start thinking about it. Another is in the late summer, when relocation starts taking off. A lot of companies will relocate employees at the end of the summer right before school starts. So August is another spike for us.

What the Internet has started to do with that though is provide people with more tools to investigate on their own. Typically if you look at March or April as kind of the beginning of that home buying season spike, what we’re seeing online now is that traffic to research schools, the neighborhood finder, the Q&A, in January just goes through the roof. January 2nd it just goes nuts because consumers are starting their research then. They may not go out and look for homes but they’re starting to think about it. What are our options? What neighborhoods are available? For the realtor, the timing is intersting. Do you want to reach your customers in March and April when they’re looking, or in January and February when they’re first figuring out what they want to do?

Larry Sivitz is the Managing Editor of Seattle24x7.

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