Friday, September 29, 2017

Make IDX Great Again: Redfin, SEO, and the Broker/Portal Battlefield

There’s a proposal for NAR to change IDX policy to include a link back to a listing brokerage’s website within every IDX listing display. This has been suggested and supported by Redfin’s Glenn Kelman and WAV Group’s Victor Lund.

References:

I’m a member of the advisory board that vets these kinds of proposals and potentially moves them on to the MLS Policy committee at NAR. So, while I won’t take a position on the policy here, I want to make sure we all understand the ramifications (and delve into the “what ifs”).

How It Could Work

The proposal is said to make IDX stronger, create greater broker attribution, and improve brokers’ position in online search results.

Let’s start with the mechanics, because it’s technically much less difficult than most are stating. In the listing input, there would simply be a new field called “attribution link”. This field is picked up in the IDX feed, and each of a broker’s listings would have a single brokerage website link attributed to it. Every other company that displays an IDX feed with Broker A’s listing in it would include Broker A’s single link in the display.

(Lund/Kelman say this display rule should apply to portals first and foremost. While I agree, pragmatically that strategy is trying to swallow an elephant while a first step would be just one bite with broker IDX reciprocity. The portal question is for a bigger, later discussion.)

It’s not that complex if it’s standardized. RESO could add a field in an instant (maybe it already has one). MLSs would have to add the fields to their add/edit software platforms (not simple, but done regularly).

The onus would be on the broker to input whatever backlink it desires to be in the listing. A smart brokerage would link directly to the listing on its own website. A broker who doesn’t have that capability (don’t scoff, it would be widespread), or is more concerned with simple company attribution, might link back to the home page of its brokerage website.

Indexing/SEO

This is where it could get a bit messier, though that’s not a necessity. Websites can effectively mask these kinds of links so that search engines don’t give them credit. Policy could require that the links be indexable, i.e. forbid the use of “noindex” in IDX display. That would create more compliance/enforcement issues, but also ensure that SEO “juice” flows from IDX recipients to listing brokers.

So policymakers considering this measure will have to decide: Is it about attribution? Is it about easier access to listing brokers? Is it about SEO?

If this policy is just about attribution, or ease of access, it’s simply a question of whether or not it’s worth the work. It doesn’t necessarily have to be about boiling the search engine ocean. But easy answers are rarely the best entertainment…

SEO Strategy

The top-level intent is to create a network of thousands of broker/agent websites linking back to the listing broker’s “original listing”. This philosophically sounds like the ‘single source of truth” that Upstream folks refer to. If every agent and brokerage website says “This is where the true listing lives”, search engines will react in some measure. There’s no denying that.

The strategy empowers brokers with lots of listings. Today, 50,000 disparate IDX listing sites show a page with 123 Main St with no outbound links to the listing broker. Naturally, the listing of 123 Main St on a highly trafficked portal site outranks them all. It’s possible that with 50,000 inbound links from other brokerage sites to the original listing broker’s website, that individual page for 123 Main St might outrank the same page on a portal site.

So when Rob Hahn says “IDX policy does not affect portals”, he’s oversimplifying. It doesn’t directly, but it could indirectly. When Nike runs a Super Bowl ad, it doesn’t directly affect Reebok, but we all know that traffic shifts Nike’s way and, indirectly, away from Reebok.

No matter how many times the latest hot shot SEO says links are dead, it’s just not true—Google still loves them. 50,000 inbound links would shift search engine results. How far that shift would be is in question.

Listing brokers first

It’s been said by Kelman that Redfin would benefit less than other brokers with more listings. The company would have more outbound links to other brokers than inbound links from other brokers, because it’s not (yet) a heavy listing-side company.

In that sense, it’s an “us vs. them” in a brokers vs. portals scenario. Their picture is of a rising water level, lifting all brokerage boats on one side of the locks, while the portals in the adjacent, much higher lock sink lower and closer to their competitors. It’s a fair analogy in the current scenario.

SEO and Fear

Many have pointed out Redfin’s SEO dominance in the brokerage world. There’s no argument that the company is head and shoulders above its brokerage competitors. But it gets a bit slippery when “Redfin does SEO good” is the simplistic claim needed to stoke fear in other brokers about this proposal.

It’s a bit like saying “Century 21 has the best blazer jackets of all brokers. Non-broker entities are doing amazing new things with blazer jackets that our policy doesn’t allow. But let’s not update blazer jacket policy to help all brokers, because Century 21 will get more of a benefit than my brokerage would.”

*If* we believe that this policy would float all brokerage boats, but we take the “nobody’s getting better if that guy’s getting better” philosophy, it’s cutting off our nose to spite our face.

Long-Term Strategy

As Lund pointed out, “Redfin isn’t just being altruistic here”. The big picture strategy would strengthen IDX—to what extent? It’s difficult to say. There’s good reason Rob thinks this is outdated strategy, and we really can’t tell how much effect it would have. But would 10 percent more traffic be beneficial to brokerages?

All-or-nothing arguments are sexy, so it’s easy to say “forget about SEO”, “IDX is dead”, “Zillow already won.” But we all know there are varying degrees of truth to these platitudes and there are companies that survive and thrive on margins—not winning, dominating, or crushing everyone in sight, but gaining 5% more market share each year. Billionaires live in niches.

This is where the sidetrack arguments about brokerage revenue models are merely distractions. Brokers and agents who generate transactions via portal traffic/purchased leads today are realizing ever-slimming margins on closings. Sales from in-house leads often recognize a 30%-40% higher profit margin when the business doesn’t have to be purchased through an advertising portal. That’s a win in one of many small battles.

“The last war”

Every change in policy doesn’t have to be about saving brokerages or crushing the portals. Sometimes we’re just pushing the ball further down the field. Sometimes it’s a just a little more leverage, a little more profit, a little more power.

But let’s air the scenario that’s we’re being warned of, where Redfin eviscerates the brokerage world’s traffic through this kind of policy, because it’s not just “Redfin SEO good”. This is a very specific technical change that isn’t just leverage through some SEO mojo voodoo.

These are links that pass power to brokerages who sign the listing. Redfin’s long-term growth strategy is listing growth, one it will pursue through massive spending, taking losses, and charging listing fees far lower than most other brokerages. If Redfin can grow its listing base significantly through its current 1% listing fee being advertised nationally, combined with an IDX policy that provides links back to the listing broker, it would benefit tremendously from the policy change in the long term.

Frankly, if the company can do it, good for them. Whichever brokerage earns the business of the seller should get the benefit of the listing’s exposure.

You Decide

There are very different motivations being laid out for this proposal. This could be a brokers vs. portals question in which you choose to forgo inter-brokerage rivalries. This could be a question of a tech-savvy brokerage pushing an agenda that will improve its long term strategic position vs its broker competitors. It could be a shift to better listing broker attribution and access. It could strengthen every listing broker’s online presence, traffic, and lead gen. It could have little effect on web traffic at all, long-term.

I won’t tell you which way the decision should go. I do believe that the mass introduction of integrated, *organized* brokerage website links, updating faster and more accurately than advertising portals, would have a significant strengthening effect on listing brokers’ IDX websites in terms of organic search traffic.

Maybe this is an insightful move for the brokerage world. Maybe it would be a mess. Maybe the status quo is just fine. I’d love to hear your feedback.

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