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Placester, and $10 Websites

Placester took a shot at Zillow by slashing their agent website prices [Via Realuoso].

From their CEO Matt Barba…

If having a great website is a given, then affording a great website should be too. We strongly believe this is what it should cost to build and run a quality real estate website.

I know what it takes to build and run a quality website (having worked at Virtual Results from 2010-2011) — and it’s a heck of a lot more than $10/month.

Anyone charging more doesn’t have the best interests of real estate agents in mind.

Umm… or not every vendor selling agent websites has venture capital to take a loss every single month with the goal of getting huge (& monetizing later). I highly, highly doubt Zillow is making any money on their $10 websites; they are a lead generation strategy for Zillow Premiere Agents. And I highly doubt Placester will ever make any real money selling $10 websites either. But I wish them the best of luck trying.

 

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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  • This would also drown out any of the smaller real estate website competition. $10/m is close to impossible to compete with paid advertisements and become profitable in such a competitive space. They would need to charge way more to see any ROI (small companies would).

    • I think you’ve got it there on the content marketing. Seth is making all of the right connections to drive awareness. He’s just going to have to do a lot more now to make the margins work.

      • There are no margins on $10/mo unless you do zero customer service. And I assure you, with zero customer service, you will have very unhappy customers.

        • True. Unless they built a system that’s so obvious in usage that there’s no setup support needed, and so clearly compartmentalized that agents know they can’t go outside of box A and box B, there could be a lot of support for little profit.

        • Even with zero customer service, in that particular niche there is absolutely no conventional paid methods to get ROI back at that price tag. (PPC, Social Ads, etc) – Content marketing, WOM, events, and that type of stuff must be their money makers.

  • lukesyres

    Ha! This is awesome. Couldn’t agree with you more.

  • He definitely went overboard with the “best interests” comment. We’re paying a lot more for some sites that do very well and I know the providers want to keep us happy.

    That being said, it’s a very attractive alternative now to the agent who wants a website but has an uneasy feeling about an advertising portal running their entire web presence. Their websites are some of the best I’ve seen in the inexpensive price range, and now they just hit the “can’t afford not to” category.

    I think the key is how quickly they can be set up and look good (for the kind of agent looking for a quick fix. The big providers’ sites, by and large, look boring without a lot of customization. Placester sites probably have less customization available, but they look pretty sleek out of the box.

    • Yea, they may be a good deal. But I assure you, VC’s are not going to get rich selling $10/mo websites to agents. So something has to give. Either they will have to raise prices, go out of business, or build another massive revenue stream to float the losses on the website side of the business.

      • Agreed, this is really swinging for the fences and that pricing isn’t going to make anyone rich soon. Maybe they found some white whale VCs who are patient…. ?

    • I just tested a Placester site on my iPhone and it looks good there too!

      I agree, it is insulting to suggest that anyone who is not giving their work away for next to nothing does not have the best interest of the Realtor in mind.

  • Maybe once they have the traffic they will start showing ads on these websites, or they might start offering other services agents can subscribe to.

    If they get enough agents, then combined they have a large section of the market. Perhaps combined they could even have a larger share of the market than Zillow.

    There are a lot of entrepreneurs who offer their services for free in order to ramp up the volume, then they figure out how to make some income, or they get bought for millions or even billions from a large competitor.

    • I wouldn’t be surprised if the long-term play included premium services, but I don’t see advertising as a viable option.

      • Could be, or maybe they just want to sell out to Zillow. If they get the same amount of eyeballs as Trulia, Zillow feels that is worth $3.5 billion.

        If the traffic is the same, but they feel it is worth less for some reason, then they are stuck taking only 1 billion.

  • Mark Hawkins

    I had never checked Placester out but knew that Seth Price was involved as well as the former CTO of Mashable. I was under the impression they were more than just a website provider. When I go to the site, I see a lot of nice marketing things and the web offering. What am I missing?

  • You thought they couldn’t make money on $10/mo? How about $5/mo 😉 http://t3experts.com/nar-placester-deal/?inf_contact_key=d2be71ac7be102f6bad186909a532258d3507202e905d8595e06fe931a7eb28c. As others have pointed out, building an audience first and figuring out a monetization strategy later is a common model these days, with Zillow being a great example.

    • Good point Malcolm that Zillow is a great example.

      I would add Trulia to that list too. They lost money for the last 3 years, $34 million total, and then sold to Zillow for $3.5 billion.

      • So we’re talking acquisition now? Get a big enough Realtor base of subscribers and then sell to a bigger company that needs those relationships?

        • That strategy has worked well for many companies.

          I hope it works for Placester for two reasons.

          1. Placester uses direct MLS access all the time, so no inaccurate information for consumers.

          2. Zillow has inserted itself between the Realtor and consumers, exploiting a weakness, which is Realtors do not have good Websites. If Placester gives Realtors a good Website, there is no need to have a Zillow between us and the consumer.

          I will be adding a Placester site as an alternative search option from my Website. At $10 per month, it is hard to resist.

      • Yep. That was an incredible exit. Right place, right time. Media 2.0 companies like Z need audience, content and a revenue model to succeed long term. The model only works if they can dominate an audience. Z acquired Trulia simply to eliminate their only viable competitor and move from ~50% audience share to ~80% audience share. Smart move, especially when you can use house/paper money to pay for it.

    • haha. Is there paid customer support on top of that? You cannot make agents happy for $5/month. They will want fixes, feature improvements, new design assets, etc –> someone has to answer those calls.

  • At $5 per month I could not resist. I signed up!

    My plan is to make it a subdomain callled easy.oahure.com. It will be an alternative to my regular site which is more complicated.

    It is not just the price though that got me. Malcolm included a link in his comments on my last post to a site by Placester as an example of responsive design, and sure enough the site works and feels great, even on the iPhone.

    I would easily pay $50 per month for a site like this, so at $5 per month it is a steal.

  • Jay Poocha

    Great looks, but the IDX functionality is extremely limited. Placater has no desire to fix any incorrect data fields linked to an agent’s site template. Zip, zero, zilch! So for $5 or $10 a month you get basically a pretty looking site with zero functionality if the IDX feed does not populate your site correctly and a sales/customer support staff that REFUSES to make any changes. Agents and investors should strongly consider another company with better customer support and a technical support team that can fix basic data issues. NAR should considering pulling any endorsement of this company. One word – horrible.

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