Zillow just announced that they will be acquiring Trulia for $3.5 billion dollars. The fine details are already being made and the deal is expected to close by 2015. Why Zillow and Trulia decided to join up is obvious: Scale is important in the multifamily industry, so the more viewers favoring to one go-to source means more advertising dollars.
I went through a few scenarios that this "Trillow" (or "Zulia" if you're feeling brave) acquisition will have on your multifamily rental efforts:
Pricing for your ads will increase.
This is a simple reality of major competitors becoming one and competition decreasing. With two of the largest competitors becoming one, the power for them to increase prices is there. Don't make this your biggest worry: With a more powerful, leading brand (and less fragmented market), the more people your ads will reach with less effort.
I figure that changes to pricing structures won’t be announced from either brand until well after the deal is approved, so expect changes in pricing to happen later rather than sooner.
More renters will see your ads.
Now, for some good news. Expect "Trillow" to be the strongest brand on the multifamily rental and real estate market, by far. In a fragmented market like this, where renters have a choice of dozens of websites, expect the new behemoth to draw more overall traffic. They won't even have to advertise as much to get the same amount of traffic, assuming they become one brand. Smaller competitors will have to adjust significantly to gain any foothold into the rental market.
The ILS market will change and become more region-focused.
There are currently hundreds of internet listing services (ILS) out there that help renters find their next home. Unfortunately for them, the market leader just become even larger. These smaller ILS services will have a harder time capturing new renters nationally. The best alternative is to focus on regions where the company knows the area and to individually target these areas.
Region-focused listing services such as Pacific Listings will not feel the effects of a major market move nearly as much as a national brand. Their advertising doesn't have to go beyond their region, and they have the ability to excel at one region better than a national brand can. Do your research to find out what regional listings work best for your apartment community if you decide to go above and beyond the services of the national brands.
Craigslist will respond. In a big way.
Outside of Zillow and Trulia, Craigslist is the only multi-billion dollar player here that still has relevance in the real estate and multifamily industry. But that relevance has drastically faded in the past year as Craigslist continually makes it harder for agents to post rental ads. Craigslist still has the rental traffic and the brand recognition to do something about the rental market flocking to an even bigger behemoth like Zillow.
Expect Craigslist to finally collaborate (rather than fight) other ILS engines such as Padmapper to help better map rental ads and make it more user-friendly. Also, expect them to monetize this further and make rental postings easier. It's either this or jump out of the multifamily market completely.
Trulia's listings will merge with Zillow... Eventually
Further down the line, it’s possible for the websites to eventually merge into one brand to save on advertising costs, and make it better for renters and agents to use one brand. Listings will syndicate to each other and the brands will look more alike. Since Zillow acquired HotPads in 2013, the user interface and branding of HotPads has slowly merged to look more like Zillow. Don't expect a cute new name like "Trillow" or "Zulia" though. I firmly expect Zillow to be the biggest name on the multifamily market for a long time.
What is your strategy towards multifamily lead generation? GTMA helps take care of this for you and by staying on top of the market and generating quality leads directly to you. Comment here if you have any questions about lead generation for your multifamily property.
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