Homes.com $1B bet is paying off
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Homes.com $1B bet is paying off
CoStar Group the owner of Homes.com, is chalking its $1 billion advertising campaign on Homes.com up as money well spent.
The firm’s residential networks — including Homes.com and Apartments.com — logged record traffic at the end of the first quarter, company executives said during its first quarter earnings call.
The results come as the first picture since the real estate giant launched its major marketing push for the homebuying platform. Ahead of its debut in the rareified air of Superbowl commercial time, CEO Andrew Florance described the planned campaign as the “largest in the history of real estate.”
Real Estate Web Traffic
Together, the sites notched 156 million unique monthly visitors in March, according to Google Analytics data reported by CoStar. That’s up from 95 million average unique monthly visitors reported in the previous quarter — almost double that of the same period in 2022.
On its own, Homes.com logged 110 million unique monthly visitors last month, about three times that of March 2023.
Unaided brand awareness — meaning consumers are able to identify the product without additional explanation — grew from 4 percent in January to 24 percent in March, marking the near-halfway point to the company’s goal of 50 percent.
“I think the most important news is that the early indications of the Homes.com investment is working,” Florence said. “We are building the brand, and we are monetizing the site. We believe that before too long, Homes.com will be our largest revenue business in the portfolio.”
Florance acknowledged CoStar’s remaining uphill battle to unseat Zillow. Its top priorities are gaining market share by expanding site traffic and turning its “Your Listing, Your Lead” model into profits — two goals Florance said the network’s growth last quarter showed “clear proof that we are very successfully delivering against.”
“With recent seismic legal settlements in the real estate industry, we believe the portals that rely on the lead diversion models could become stressed,“ Florance said.
The trade group deal included eliminating offers of compensation to buyer’s agents from NAR-controlled multiple listing services. The executive said these platforms’ reliance on diverting buyers from listing agents to other agents could spell disaster if proposed rules to secure buyer’s agent agreements before showing a home are enacted.
While fallout for its competitors under new commission rules remains to be seen, residential has already made a dent on CoStar’s bottom line.
Chief financial officer Scott Wheeler placed the sales split in the first quarter around 60 percent commercial and 40 percent residential for a shift between the sectors of around a $10 million in revenue for the full year.
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Updated: Boston Real Estate Blog 2024
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