On a site called Zillow, it is free to list a property for rent, as well as to list a home for sale by owner or agent. The online and mobile search tools of Zillow, including its smartphone app that allows every user to search for property and view estimated property values is free as well. As stated on the official website of Zillow, the site will not charge the renters a fee to create, save, and share a renter profile. Then, how is Zillow able to offer all those services for free and still make money?
There are several answers of the question. The first one is the ad sales to properties management companies. Zillow makes money by charging property management companies to advertise their listings on a thing called Zillow Rental Network. This one includes several websites such as Zillow, Trulia, Hotpads, MyNewPlace, AOL Real Estate, MSN Real Estate, and HGTV’s Front Door.
The second one is ad sales to mortgage lenders and the other businesses. Zillow sells the ad space on the site to mortgage lenders and the other businesses that want to reach the consumers of Zillow. Those other businesses refer to the interior designers, home organization retailers, and general contractors. Mostly, the advertisers are in the real estate industry. However, some of them sell telecommunications services, automotive products and services, insurance and consumer products. The display revenue itself depends on the number of unique visitors of Zillow gets every month.
The third one is threats to the revenue of Zillow. Most of the advertising relationships of Zillow are short term. In this case, it cannot take them for granted. The ad revenue of Zillow, on which the financial success of the company relies, could suffer if existing advertisers ended their relationship and Zillow were unable to replace them. if the user base dwindles of Zillow or its competitors become more attractive advertisers for mortgage lenders, property management companies and real estate agents, a thing known as ad revenue could decline. Aside from that, as the company relies on the ad revenue from the Premier Agent program, the revenue could suffer if agents stop seeing value from advertising on Zillow.
The fourth one is premier services for real estate agents. Zillow charges $10 each month for the websites of premier agent. Everything includes free minimum designs, integrated multiple listing service search and a domain name. On the other hand, every real estate agent also will be able to purchase advertising with Zillow. Every ad targeted at users in the local markets of the agents that can help them to get the new clients who are buying or selling homes.
The last one is the bottom line. Zillow earns money by selling ads on the official website of Zillow and the Zillow mobile app to property management companies with vacancies, real estate agents looking for buyers and sellers and mortgage lenders looking for borrowers. In addition, it also sells to the general advertisers, mostly the ones in the real estate industry.