The other night I was reading a post on Joel Burslem's real estate marketing blog which I replied to but also felt like would make a good topic for this blog.  Basically he was questioning the advertising revenue model that Zillow has adopted and wondering if it made more sense for them to position themselves as a lead generator such as House.com rather than a "Media Site".  He felt that Zillow was essentially biting the hand that feeds it, by depending "entirely on advertising monies from Realtors to sustain its business model, and yet clearly is in the business of providing the tools for consumers to circumvent Realtors."  This got me thinking, less about Zillow's stated business model but more about the fate of the large "Lead Generators".

I believe that Zillow was very wise to avoid the temptation to position themselves as yet another large lead generation company.  Many of the large lead generation companies have alienated both sides of their business; Consumers by being fairly manipulative in lead capure while adding almost no value to the transaction, and the agents by essentually providing a overhyped and under delivered product.  Out of the agents I've talked to who have worked with these companies the response was almost unanimously negative, not just negative but very vocally negative.  It's gotten to the point where simply the term "Lead Generator" makes some agents hair stand on end.  Not a very good combination for the long term viability of a business.

Don't get me wrong, online lead generation IS an integral part of the real estate industry and will be even bigger going forward.  I run a company who's core business is lead management, so of course I believe that.  But the practices used by many of the large lead generation companies is eventually going to be their undoing.  The large brokers (and small ones too) are making great strides to catch up quickly in the online space, with help from companies such as MostHome.  And it's these companies who realize their long term viability is very intertwined with the happiness of both the consumers and the agents who will ultimately be successful.