Dave, I think this is brilliant. Many of the points raised by Joel I agree with 100%, I have for years read his site (and others) with interest and many of my stories and ideas come from his articles.

So Dave, a great great read. And you might even get some love on here for those sort of articles!

Peter and Glenn, thanks. I appreciate your kind words.
Joel is a brilliant guy. As much as I would like to claim it, really, all credit goes to him in this case.
Be well.

Thanks for your positive words on video Dave. We are a world first map based real estate presentation site here in Perth. We do detailed online video walk throughs and do highlight video presentations of the areas around these properties for sale so people get an idea of what the area is like as well. We also do online research and are affordable to all price ranges. I must say it has been pretty hard to promote it here, real estate agents just don’t get it! except the two that have been using it, they love it, now that they know the power of it. I will be bringing it over to Sydney by the end of next year as I don’t think it will find as much resistant over there as they are a lot more forward thinking. Meanwhile, how do you suggest I get these numbnuts over here to realise what they are passing up for the price of a print ad?

Dave,

I decided to hold off posting a day or two until the rawness of that numbnuts crack wore off…

You combined much of my thinking and a whole lot more and I hope Michael appreciates the time you invested in that along with your industry experience. I reckon that would be some of the best advice he has had in a while.

From a personal perspective I would love to get into video, but it just does not “fit” right now for a number of reasons. No doubt over the next 12 months I reckon we will start putting our toe in to test the waters, but I would be hesitant to work with any company that thought so little of our industry to post that on an industry forum….. and I certainly do not consider us “numbnuts” for not having used video to date.

In contrast there is propvid which appears professional in every sense of the word. REA obviously thinks so as well with your partnership on the locality guides. A great job by the way… despite a couple of “teething” problems.

Hopefully Michael can learn a little from propvid and your post. Right now for every marketing dollar we spend there is dozens of different solutions we can invest in.

1. Too funny. I think a real estate agents news site, which mainly agents read, is not a place to call them ‘numbnuts’. But hey, there was no malice in the comment.
2. Do your own website and keep working on it (don’t agree with that one), but don’t spend $$$ promoting it, just tell the clients it is another place to view . Instead push and provide an easy solution for agents to link the video into their own website or system and play it from there. Create a super slick video player (make it customisable with look and feel), provide a solution to plug into their own website (even if it feeds off yours) and make this process as simple and easy as possible.

So to refresh, do NOT try to sell your website as something it isn’t and push your product and services to the max, if your product is sound then it will work for itself over time, video is easily a better solution but it will be for the higher end of town until agents can easily create these themselves.

Michael

Advertising for real estate agencies is always a juggling act with finances. Everybody selling some form of advertising or promotional equipment or solution seems to think theirs is the must have accessory or medium for an agent to spend their money. If I had a dollar for everytime somebody has suggested that we just had to sell one property to justify spending money on what they are flogging I would be able to retire. . Salespeople often offer the same argument when its not their money being spent..

Lets look at the agency funding it.. What everyone seems to forget is that unless it replaces another existing initiative it is a new expense. Like all businesses we can only pay for new expenses out of profit. My own rule of thumb is that any new investment has to generate 5 times its cost to break even. We list well over 500 properties every year now so if the agency was to get videos on just the top 20% of our listings, that would represent an investment of $33,000 which requires at least an increase in revenue of $165,000 just to break even.

In our area this represents more than 21 sales extra just to fund videos on 100 properties something I find highly unlikely to happen. Quite simply, if you want to invest in video on that sort of scale you have to convince agents that it will generate a lot of revenue. Quite frankly I doubt that can be done for the masses as we could find far better places to invest those sort of dollars.

The other option is of course vendor paid advertising but owners are faced with the very same decisions. What can they spend the money on that will give them the most exposure and potential buyers per dollar spent. When vendors in our area struggle just to find a few hundred dollars for a total investment in a marketing campaign they certainly are not going to choose to spend $330 on a video. All they would be able to afford is a video and nothing else to promote it and give it exposure.

For the moment until the average agents can divert funds committed elsewhere to video you will be limited to agents selling few properties for much higher values. The maths make a big difference and thats why you see virtually all agents working with Propvid are those operating in the more affluent areas.

Print is a very expensive medium and at the moment it is just hanging on to its value proposition. As print becomes irrelevant in our industry you will find that the takeup of video will rise. You need to be working with those agents it “fits” best with positioning yourself for when video starts to become an acceptable norm.

[My humble apologies for the numbnuts comment, it was a mere reflection of my frustration at 2 years of constantly testing our product in the market, having buyers and vendors tell us how fantastic our product is with comments like…..]

Honestly.. what has buyers and vendors opinions got to do with it?? Your not that naive I hope. I love Porshe’s and think they are a fantastic product but if I dont fork out the dollars for it my opinion does not count to the dealer especially if he hasnt sold any for the year. Just because people love a product does not mean they will pay for it. They have to see VALUE in it and thats where your problem lies. Agents and Sellers have to see value in what your offering and until they do you can talk to your blue in the face.

Most offices do vendor based advertising so where is the cash from these Vendors? If it was as easy as getting vendors to appreciate your product we would not be having this conversation.

[I must say it has been pretty hard to promote it here, real estate agents just don’t get it!]

Why is it the customers fault? Maybe… just maybe… the agents see it for what it is .. or what about you are not doing a good job selling it… or the price is too high.. or your system does not work as promised… Why is it the customer is at fault because you believe they are not not smart enough to understand what you are trying to sell them?

If you have not figured it out yet, the problem is yours to fix, not the agents. Despite what you think, real estate agents are not stupid. If they KNOW a product will make them money, they will invest in it. Your assurances notwithstanding.

There are very few initiatives that virtually all offices (but not all) around the country would consider as essential and they KNOW will make them money…. these would include www.realestate.com.au, window display and property signs.

Of course you could always follow another industry player’s footsteps. Drop your price to something very reasonable in the beginning gain market dominance and once you have a complete market saturation ramp up the price every year to fund your attempt at world domination. Seriously though.. I think your price is bit to high.

Michael,

Real Estate is no different than any other business. There is a natural profit rate for successful agencies similiar to most other businesses. If an agent earns $8,000 on a sale the total profit figure after wages, rent, phone etc etc is probably somewhere under $1,600. Many offices struggle to make any profit at all.

Not every listing you get sells. If you sell 2/3rds (and many offices dont even do that) it means that spending $800 marketing on each listing and you just reduced your profit by 75% down to $400 for every listing. If you sell only one in every two listings you made no profit at all. Thats not good business.

As a method to compete some real estate offices will often fund part or all of the advertising or offer things like no sale no pay policies. The advertising paid for by the agents is normally very minimal and is often sold as being more than there really is.

In deregulated markets agents are able to increase their commission rates and have a great market share are able to fund a proper marketing campaign. These offices are generally the exception rather than the rule and are normally significant market players in their area.

Whether an agent pays for the marketing or not does not change the value exercise. You have to be better value than other options available or they will just choose one of the other options.

It’s natural for an owner to want an agency to pay for the advertising. As a consumer I don’t want to pay any fees and want a high interest rate on my savings when I deal with the bank. When I go to a restaurant I only want to pay what it would cost me to cook at home. What I want and whats reality are two different things.

With regard to a rate on a reasonable price this is a hard one. The price you need for mass take up in the current market is not going to be sustainable for you….. Thats why everyone is saying that at the moment, video is not ready for mass rollout. Whats a price that is going to put you into better consideration??? I would think a price closer to $200 personally. That wont get you agents falling over themselves to sign up, but it should make your value appear much better and get you working with more offices. How that fits into reality I don’t know.

The other things that will help your takeup lie outside of your direct control but you can exert some influence. This is the agency websites and the property portals. At the moment the integration with video is very poor. In most cases it consists of a simple hyperlink on property pages.

You have heard from one of the chiefs at REA that they see video big in three years. They obviously have some sort of road map on improving video in their portal. Work with them, the other portals and real estate groups. Dont forget the independents. You have companies like Portplus who handle the websites of huge numbers of independent agents. As they improve how video sits on these sites for the consumer, your value improves.

Something you should look more closely at is how the professional photographers moved into the real estate industry. Five years ago very very few photos were taken by professional photographers. Several companies have built up a huge business from this. They proved their value to agents by giving away photo shoots to leading agents in an area. Agents then noticed that those properties with professional photos got far more enquiries than those poorly exposed out of focus shots taken by salespeople.

Once they had the market leader on board they then went around and approached the other market players offering the ability to catch up. Their value was proven and now they are called in to photograph a lot of homes.

Thank you Michael for that compliment. I really enjoy reading the discussions on this site and then halfway through the article, I started reading about myself. We’re doing Propvids down around the $100 mark now, in studio, utilizing some blue-screen technology and a new camera rig. We’re just doing a soft trial of what we’re calling a ZIP. About 20-30 seconds and loaded with lifestyle. We’re exploring inserting stills but there’s no ‘grain’ in a digital photograph so you know its not film and it always jolts me and looks a bit…nasty.
Anyway. Joel. Awesome comments about what a video should be - and not stating the obvious. I’m always saying to Agents the fridge in the corner usually means this is a kitchen….and please reserve comments like “awesome” for the Grand Canyon. One of the few things in life which doesn’t disappoint. Cheers guys.

Well, while we’re all promoting our video products, have a look at our latest forLend Lease.

We produce our Tours for $100 - $400 + GST, and while we use “nasty” stills, we do have professional voiceovers who give very classy soundtrack. Our composer has also come up with some pretty nice music as well. If it’s good enough for Ken Burns…

I am aware of 10 players in real estate video area at the moment. Hey Brett, I think there’s room for us all - we all just need the market to grow. How about a peak industry body to promote the medium and to liaise with the portals on video integration?

Our offer also goes out to all agents - a free trial Property Tour. Call me on 0438 044 022

Guys, have a read of this story in Venture Beat, about TurnHere’s business model. They do on-demand video. Real estate was initially one of their primary targets (if not THE primary target) but they have very successfully diversified to higher-demand segments.

Hi Glenn. I’ll have one of our Qld Producers, Daniella Atkinson phone you. Our Senior Producer Sarah Estela tried to email yesterday in respect to the streaming issue. RE: ZIP, we have been shooting lifestyle on the Gold Coast for almost two years, taking advantage of every fine day. We have extensive helicopter aerials and wide, establishing shots of most key locations. That, combined with some other techniques we’re deploying, including blue screen, will see us roll out a bottom-end production over the next few weeks. My focus as Creative Director, however, will be introducing the next level of HDP technology into our offering and raising the production standards again. We are aiming squarely at meeting 35mm motion picture values. Our last three Platinum HD productions have all been top secret and we can’t stream them in the public domain as the Vendors demand a great deal of privacy, however I will be able to show you ’selects’ of the new footage, which now allows us to lift glossy A4 prints from.
As for the uptake of video, when I started Smash! Pop! four years ago (which turned into Propvid) and rolled out video, initially for Laing+Simmons and then RW Double Bay, you could ‘Google’ property video and be lucky to fill a page. Today, many of our initiatives have been copied here and abroad - some to the point of cut and pasting our products and prices into their sites.
At Propvid, we will continue to innovate. I don’t come from a real estate background but from three decades of production so we’re just scratching the tip of an iceberg in terms of what we have to offer. Best Regards.

Like your work John, really simple, straight forward, and easy to get to. Thanks for your advice/ideas on your article regarding the education of real estate agents. I agree with on the fact that video is here to stay and that we need to educate. We are in early days, and I must admit It has been hard for us to try and educate/convince agents that this is a product for them, we are getting there slowly, this is actually good for us as we are learning that different real estate agencies have their different ways of approaching the market. At least we know that the ones we do get, stay with us as they realise the economic and not so economic benefits once they have used our product, I am sure the same goes for everyone else in the business. As for the portal idea, we love it and it’s not about competing with the big players (which seems to be a knee jerk assumption by a lot of people that access our video tours via our homepage). Our product is mainly accessed via the likes of realestate.com, domain, agents home pages, youtube, & yahoo, and as far as the consumer is concerned, we don’t exists. What we want to get is traffic credits from these hits for future uses (watch this space), If any online business out their is cheating themselves of this ‘RETHINK HARD FOLKS!!’, extremely valuable water to have under your bridge if you think you are going to be around in a few years. Most ex film makers have been pre conditioned to create content and hand it over (like the good ole days) and I think that the smart ones will realise that they need to have some sort of control over their content. At this stage I don’t think there is a ‘how to’ get it right as it is too early in the game to know what people want (I don’t think the agents know half the the time, and why would they as this is all new to them). I think it’s great that there are a number of online video real estate companies out there trying this online real estate presentation product in there own different ways, and it is my guess that the different types of real estate agents will be attracted to the different types of video marketing tools that are available to them. I do know one thing, that when it does go off in a couple of years, there will than more enough work for all of us.