Zillow Direct Ads Turn Site Into Dynamic Ad Platform

Zillow has always seen itself as a media company. The real estate site, which launched in early 2006, has continued to add features and listings that are very real-estate centric. But with the introduction of its “DirectAds” program it has become something else — a site that uses its considerable data and data-mining capabilities to allow for precision ad targeting based on location, income, and other variables. In fact, this is probably the most precise geotargeting ad capability online: down to the house.

The new ad program is designed for regional and national advertisers. The company offers separate ad units (“EZAds”) for realtors and others.

To provide a window into why this is powerful and very interesting, take a cable TV advertiser as an example. Cable TV providers (e.g., Comcast, TimeWarner Cable) have high rates of churn all tied to people moving. Cable TV companies can’t predict when that’s going to happen and so can’t intervene to prevent the churn; they have to reacquire those customers typically. But Zillow’s system can alert them to people who are about to sell their homes anywhere in the U.S. (those using Zillow, that is). Zillow does this by watching user behavior and seeing who’s looking at particular homes.

Zillow CEO Rich Barton told me that just before a home goes on the market, Zillow sees a huge spike in traffic — typically from the homeowner who’s looking at the listing and often updating the information on the home. This sort of information — and there’s a good deal more there, too — enables Zillow and advertisers using the new tools to target that seller before he/she sells. Zillow can also reportedly identify when someone is considering a remodel (through a wizard on the site that projects home value increases from improvements).

But back to the cable TV example. Cable companies can use the data and targeting to serve ads to all those who are about to sell and retain those customers (potentially) in a way that’s much more efficient than what they currently do. (Cable companies know where their customers are geographically.)

Zillow also allows for, among other things, income targeting. That sort of targeting, which is based not on self-reported data but home prices, is desirable for most brand advertisers. And if you step back and consider that real estate is one of the major “life events” that triggers lots of additional purchase behavior, you start to get a sense of how this capability is applicable to advertisers far beyond realtors and moving companies.

That’s why I say that Zillow has, with this ad program, transformed itself from a real estate site into a much more interesting (and powerful) advertising platform.