Chief marketing officer, Zillow
Zillow’s success is rooted in data: the price estimates, or Zestimates, of 110 million homes. What is marketing’s relationship to data?
From the beginning, Zillow was all about figuring out how do we take data and make it smart and empower consumers with it. Everything we do is based on data. If I go to my executive team and say I want to spend money on advertising in a particular channel, they’re going to ask me for data to prove it out. It’s just who we are. So absolutely everything we do from a marketing standpoint is driven by data. We look at data not just on a quarterly or monthly basis, but on a daily basis. We react to it and change on a dime based on what we’re seeing to be effective.
Is your goal merely to drive traffic?
In the early days, the job was about growing awareness for the brand, and it was all about driving traffic. At that point we didn’t even have a revenue model. Now, we’re in the midst of a shift from being solely based on advertising to also providing business services for local real estate professionals. We have a subscription product that allows agents to advertise on a zip-code level and we provide a number of services that help them run their business better. From a product perspective, when an agent wakes up in the morning, we want to be the first place they visit, as a way to manage contacts and grow their business. So, it’s still important for Zillow to be large because a large audience is important to the real estate professionals. But it’s more important than ever now for us to attract the right kind of traffic—people who are really planning to make a move and who are likely to contact a local professional, because that’s how we monetize the site.
How do you determine whether what you’re doing is successful in that regard?
We measure all of the traffic we bring in, as well as the percentage that actually contacts a local agent. That’s something we watch really diligently across both free and paid channels. The person who clicks on a Google ad and contacts a local agent is far more valuable than someone who may come to the site to check what how much their old boyfriend’s home is worth. If we’re going to pay for advertising, we’re going to focus on segments of traffic that we monetize—potential movers, buyers, sellers and potential renters, and our marketing message isn’t going to be, “Come check the value of your house on Zillow.” It’s going to be, “Come shop for a home on Zillow.”
How much advertising are you doing?
In our first five or six years, we never spent a dollar on advertising; nothing. We got up to about 20 million unique users a month that way. It was an enormous feat. But then, about a year and a half ago, our revenue really started taking off so we started testing a couple of channels.
It’s common to see tech companies swear off advertising in the early years only to come around as they mature. How did you decide it was time?
A big part of it is becoming more sophisticated and smart about the levers of the business. That takes time. Often in the first many years of growing as a brand and a business, you’re doing a lot of experimenting. You throw a lot of new products out there. Some succeed; some fail. But it’s really tough to be able to say if we do A, then B will be the outcome. As your revenue model matures, and as your base of users matures, you’re able to more carefully understand the potential and measure the results: if I change this or do this or add this, this is likely to be the outcome. Six-and-a-half years into the business, we really understand who our users are, how they behave at different times of the years and what might happen if we increase certain activities.
How did you decide where to start?
Mobile users are more apt to be buyers because they’re literally walking or driving around neighborhoods on the weekend, going on open house tours. That means they’re naturally closer to contacting a real estate agent. So we started there and we’ve found that spending on mobile works. With search-engine marketing, we’re still in a testing phase, but it looks like it can work for us, too. And we tested television last fall in a limited market. So far, we’re finding that advertising channels tend to get us more focused traffic. Our traffic has been growing 60 percent year-over-year. In July, we had 37 million unique users a month, the vast majority of which came to us free. I would say less than 5 percent of traffic comes from advertising. But that traffic is very focused.
Your iPhone app was pretty early and has remained popular in the various app marketplaces. What can you share about your experiences in attracting and maintaining attention in the mobile space?
We launched our first iPhone app in the spring of 2009, thinking it would be an extension of our brand. We figured having our brand on mobile would bring more people to our site and would help with awareness and discovery of the brand. We learned within a month of launch that there will be a time in the future when people use Zillow on a mobile app more than they do on the Web. It seems quaint now, but we were stunned by this. So we dug in and tried to understand patterns of how people were using the app and what they were responding to. At the same time we immediately hired a team to start getting on every platform. We currently have 13 apps across iPhone, iPad, Android, Kindle Fire, Windows phone, Blackberry, basically every platform. Come back in a year and I’m sure we’ll have more. And our early impressions about the importance of mobile have proved to be correct. In July, 168 million homes were viewed on Zillow mobile. That’s 63 homes per second. From a marketing perspective, I guess the critical thing to realize is that you don’t want empty downloads. You don’t want to spend on advertising to get people who aren’t serious buyers to download the app. Let’s say you are someone who’s thinking about moving in the next six to 12 months and your neighbor is not going to move for 20 years. My goal as a marketer is to figure out how to get my ad for a mobile download in front of you and not your neighbor. And once you’ve downloaded the Zillow home shopping app, I want you to learn that we have a mortgage app to figure how much you can afford.
Does app traffic cannibalize the Web site traffic?
People don’t often use one or other platform exclusively; they use them differently. The people who use mobile are usually in the buying or selling or renting process, which means the apps are all about searching for homes. A lot of the data that we have on neighborhoods or home statistics aren’t on the app because when people want that they come to the site. The other thing we learned is to launch more apps for different usage scenarios. So while Zillow.com serves renters, buyers, sellers, owners and refinancers, we have different apps for each of these usage scenarios. People tend to use apps with a specific thing in mind, so focus and specialization are important. Also, you’re not as likely to open several different apps and pop between them to compare. You’re going to find an app you like and stick with it. So it was really important to put a lot of resources behind raising awareness of the apps. This is probably the area where we’re the most sophisticated in our advertising spending today. We know that if we increase spending on mobile by X this month, it will do Y.
What’s the relationship like between marketing and the technical people at Zillow? Do you have a CIO?
We don’t specifically have someone in the role of CIO, but everyone in our executive team is a technologist. If you look at our core executive team, I’m the only one who doesn’t come from a technology background. So I can’t get anything done at this company without working really closely with technologists.
Is there a type of person who does well in marketing at a fast-growing dotcom or startup?
I started my own career as a broadcast journalist. Every day I had to have a live story for the 6 o’clock news and 11 o’clock news. That’s two full stories a day and I had to get it done quickly. It made me a quick-twitch person who works quickly and thinks quickly. It’s a tic I had that works well in a startup where you never have the luxury of time. The people who thrive are the ones who feel like they’re always on deadline, starting over every day, looking at numbers. But the trick is making sure that you’ve got the right mix of creative dreamers and data-driven marketers to really challenge each other. Our co-founders are the perfect model. One is a creative visionary type and the other is a really technical guy. From the beginning, they really bounced off each other, and so culturally that’s how we’ve evolved. It’s about having a yin and yang and a healthy tension. Certainly there’s a lot of debate around here. If you can encourage your dreamers to back up their hypothesis with some data, those debates can be a lot more productive because you won’t be just taking a lot of wild swings in the dark.