Balancing exchange rates in listing syndication

ListingSyndicationsmallOnline listing syndication presents complex strategic challenges to real estate brokerage in America today. The structure of economic trade between real estate brokers and publishers has many variables that are often misunderstood and often hard to measure. At the heart of the conversation is an unresolved understanding of the exchange rate in listing syndication. Even people with business analyst certification may be baffled.

Do brokers subsidize the success of publishers by providing listings?

Do publishers subsidize brokerages by providing willing homebuyers?

Some of the policies by publishers to create revenue have been deemed to be very damaging by some real estate brokers, and applauded by others. The sentiment among some brokers is that publishers have become too dependent on the financial support of real estate professional to sustain their publishing business. Other brokers believe that enhancing listings on publisher websites provides an excellent return on investment.

The early exchange rate premise was that brokers would supply real estate listings to publishers, who would in turn derive revenue through sources like advertising from non-endemic entities like building supply companies, banks, phone companies, utility companies, and others who depend on the home buying and selling consumer.  This was a breakthrough paradigm contrasted against the cost of newspaper advertising. A bi-product of providing listings to online publishers includes leads and listing exposure that brokers previously paid for.

This early exchange rate premise eroded over time. Today these websites continue to generate revenue from advertising, but are considered by some to be too financially reliant on the numerous revenue-generating programs that involve selling products real estate professional. Online publishers are beginning to behave more like newspaper publishers – charging to display listings.

Publishers and brokers both believe that it is in their mutual interest to make this system work. The success of each group relies a lot on access to the others’ business competencies. One would hope that this symbiotic relationship would generate enough incentive for these two groups to reform and balance the exchange rate.

Many leaders in our industry were surprised when some brokers determined that the relationship with publishers could not be repaired. Shorewest REALTORS, Edina Realty, and others abandoned listing syndication all together.

Any broker who is managing their business strategy seriously is weighing the exchange rate of listing syndication. Business leaders on both sides of this issue have sound, legitimate, and compelling support for their positions.

The question among brokers today is twofold. Is the exchange with publishers providing long term value for our industry? Does the exchange rate benefit the listing brokerage? The answer is always individual.

Finding balance of exchange between the interests of brokers and publishers sometimes seems daunting and distant. This is a hugely challenging issue. There is a lot of unfinished business to reform these relationships. The industry needs to revisit the foundational underpinnings of syndication to create better business policy outcomes. I am confident that there exists an economic structure allowing publishers and brokers to thrive together, rather than oppose one another.

There is a lot of hard work that needs to be invested in this topic, contrasted byt skepticism about the willingness of publishers to make improvements. Our judgment is that we still have a chance to deliver a balanced exchange.

There will be an announcement in the coming months about how two publishers, Zillow and REALTOR.com, who worked in earnest with one of Americas’ largest brokers to bridge differences and create a partnership that works.


  1. Mike Audet January 30, 2012 at 6:30 am - Reply

    Victor, you raise a number of great points, but not sure if I agree with your statement: “…Publishers and brokers both believe that it is in their mutual interest to make this system work…” Certainly this is true for Publishers who receive free listings as the foundation of their business. Who wouldn’t want to maintain a free supply of resources in any business. But for brokers, I think many would end syndication right now if they were comfortable on how to unravel the mess they have created. The number of leads received is minuscule, as verified by brokers I met with during a syndication meeting I facilitated last week and most I speak with express concern with 3rd party syndicator’s long term plan and the threat that may pose to their business. i expect many more brokers to pull their listings in the coming months given what I am hearing.

    Can a broker/publisher business relationship be balanced? Yes, but it would have to move way back to the broker side to do that and it will be interesting to see if the big 3rd party sites feel any pressure to do that. My guess is they won’t want to kill the goose that laid the golden egg and give any sign they are willing to modify their approach.

    • Victor Lund January 30, 2012 at 8:02 am - Reply

      Many brokers are having great success with syndication if they promote listings – particularly small independent brokers who lack a meaningful web presence. I stress that syndication without paying for featuring listings is not very effective. Moreover, I would suggest that syndication to websites that do not rank in the top 10 third party websites is probably useless too.

      A new discussion of “promiscuous syndication” is beginning to emerge. That is a behavior of sending data everywhere with no effort to measure the effectiveness. If brokers are syndicating data, they should do it carefully, and have an understanding of where the data is going and how the listing is being displayed. Broadcast syndication is irresponsible, like advertising a home without proofreading the ad. There are plenty of brokers syndicating data to websites they have never personally visited and never reviewed the terms of use. There are numerous syndication channels that only display listings on a public website to qualify for the data feed, disguising their real goal of building a separate product to sell back to agents. Other sites do not protect the data from third party data scraping.

      I believe that things are shifting back to the broker side. Brokers are beginning to mention that some leading third party websites are making a very strong effort to roll back some of the features that brokers considered distasteful. Savvy publishers understand that if they push brokers too far, they will reach a tipping point and it will be all over. It is very easy to turn it off. If brokers are not getting leads and web traffic from a site – they should turn it off.

      • Alon Chaver January 30, 2012 at 2:43 pm - Reply

        Assuming I understand you correctly Victor, if “syndication without paying for featuring listings is not very effective” and “syndication to websites that do not rank in the top 10 third party websites is probably useless too”, doesn’t that mean that syndication itself is fundamentally not useful to brokers?

        Would we avoid all this complexity is we advocated that brokers should simply pay for featuring their listings on the top 10 sites if they want to get exposure?

        — Alon

        • Victor Lund January 30, 2012 at 3:27 pm - Reply

          Alon – I am speaking in pretty general and overarching terms here. If a broker looks at lead volume and traffic volume from a sites like elookyloo.com or juwai.com or rentrange.com and sees that the results are Zero – then there is no purpose in sending listings there.

          I have also noted in working with brokers that the number of leads and visits from free listings on third party sites is really low – if any. If a broker gets no leads and only about 10 site visits per month for every 100 listings they syndicate – it is reasonable to turn it off.

          Enhanced listings works well for most brokers. More than just leads and visits – it really helps with listing appointments. Here is an example. CENTURY 21 Hometown Realty no longer advertises in the newspaper. But they advertise on Homefinder.com, who operates the property search on the newspaper’s website. Agents can explain to sellers that the newspaper’s website reaches more visitors than the newspaper, and provides a better house hunting experience. Moreover, if you look at the company’s brand dominance, it shows why they are the top company in their marketplace. Click Here to see an illustration.

          My point in all of this is that brokers need to look for strategies that work – not simply throw the listings out onto the web indiscriminately and hope for the best.

          • Alon Chaver January 31, 2012 at 4:43 pm

            I agree with you completely Victor…and was just trying to “condense” your points 🙂

            If brokers who wanted traffic just focused on strategies that work (paid for placement on the top sites) the syndication mess would be much easier to untangle.


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