Welcome to Digital RE, the new column of the WeAgentz blog edited by Michele Schirru, an expert in PropTech and new digital technologies related to the real estate world.
In this first article by Digital RE, we will talk about the impact and the domino effect, current and foreseeable in the near future, which could generate the entry of the world’s leading technology giants in the real estate sector.
With all their data and resources, could the likes of Google, Facebook and Amazon become global real estate powers?
In other words, is there anything stopping tech giants like Apple, Google, Facebook and Amazon from becoming the leading forces in the real estate sector?
They certainly have the money and the status to do a great job. Perhaps most importantly, they have all the data!
Data they currently sell to others. But if they started to keep them for themselves and to make use of them, what would happen?
New real estate powers?
Let’s start by taking a look at the current scenario
The first signs in March 2019 with the acquisition plan of Redfin, then in July 2019, a bombshell: will it be true? Has Amazon really crossed the threshold of real estate?
Yes, Amazon has started a collaboration with Realogy: just to understand who we are talking about, the company is a leader in the real estate sector in the United States and owns the brands Century21, Coldwell Bankers, Sotheby’s International Realty, etc …
In Forbes, they write: “The offering – dubbed TurnKey – will allow buyers in 15 cities to instantly connect with a top-rated licensed real estate agent in the area. In exchange for closing with that agent, they will get $ 1,000 to $ 5,000 in-home products, services and other benefits. ”
It’s certainly not quite the kind of commitment you might expect to see from a multi-billion dollar company like Amazon, but it’s true that things come one step at a time. Why risk direct entry when I can use someone else to test the market?
And what about Google? Have they ever tried to get involved in real estate? Well, not specifically, but there are certainly some interesting things to mention.
Remember Google Real Estate, the innovative service that was able to show available properties on a map? This project did not have much impact and, as such, it was closed in general silence.
But it doesn’t stop there. In reality, Google Real Estate was just a starting point.
We can look at a tool called “Google My Business” and see clearly how useful it is for the real estate sector. In particular for real estate agents, as they fit perfectly into the model with which the Google tool works: they are located on the territory and are sought after by users – that is, by potential buyers and sellers.
This is a strong sign that Google is committed to drawing a dividing line, a new direction that can give real estate agents an alternative market.
Translated, it means that traffic and potential leads go directly to agents rather than to a brokerage portal.
And let’s not forget that Google offers an advertising platform, Google Ads (formerly known as Adwords), which allows real estate professionals to be found by their potential clients through keyword searches and more.
Thus, on the one hand, you have the organic reach and on the other hand the pay-per-click solution. But that’s not all. How to forget YouTube?
Immense wealth, immense power.
Can Google, Facebook, Apple and Amazon become Real Estate Big Players?
First of all, Google has unthinkable amounts of money at its disposal for researching innovations, and also a lot to seriously start investing and expanding into new sectors and new business ideas. For example, for several years now, Google has been investing a huge amount of resources in augmented reality (AR).
Can you imagine how big AR will be for real estate in five years? If Google has the best-augmented reality software, the most advanced and the most accessible, we can’t really underestimate the influence this will have on the global real estate sector.
Google also manages profitable investments in startups through Google Ventures, in particular the Google For Startups program which, some time ago, I participated myself with a startup I was a part of.
Even in this way, they have the potential to become increasingly influential in the PropTech sector and real estate in general.
The most important thing to look at is the ambition that both Amazon and Google have to enter as many living rooms as possible.
Smart speakers are becoming more and more popular, our homes are increasingly connected to the internet, our mobile phones and our applications.
The Amazon and Google devices will probably be the most popular, but even Facebook is no joke from the point of view of the size of its web. The company is estimated to have over two billion users worldwide. How can a database of this size not be of incredible value to real estate professionals looking to close more deals?
Facebook offers businesses a rare alternative to the Google Ads algorithm that essentially favours those with more money to spend on advertising. Facebook is the right place for SMEs in the real estate sector, also because the platform (which includes Instagram ) is also very popular with buyers and sellers themselves, providing the sector with a very “committed” audience.
Every marketer knows that you can’t manage a targeted and efficient advertising campaign if you don’t use both Google and Facebook ads, largely due to the large demographic diversity the two companies attract.
Facebook’s potential increases when you consider the aforementioned power of video in the modern world. Yes, YouTube is a driving force, but have you noticed how intensely Facebook is pushing us towards video content?
We now have faster and more stable internet connections, smartphones are increasingly equipped with abundant data plans and the immediacy of video content is exploited by every industry on the planet: real estate is no exception.
So far, this has been a simple overview of what these tech giants have already done and could do with the tools already available. It is important to realize what remains to be done…
Let’s talk about data, or rather Big Data, a gold mine
We, all over the world, deliver data as if there is no end and as if there is no harm.
Every time we upload a video, publish an article, comment on a photo, offer information such as our age and our hometown – even something as simple as when we “like” a particular page, we give away valuable information. The same goes for our real estate searches.
All of this information can be used by data companies for good and, sadly, for evil.
This stock of highly relevant information is a gold mine for companies like Google and Facebook.
If they know what we like and what we don’t like, where we live and where our children go to school, they can use them for better orientation.
When done right, in theory, this is the most acceptable use of personal data we have devised, highly targeted advertising. It is acceptable because it can provide a better user experience and a more efficient use path. Everyone wins.
Today, these tech giants sell the information they derive from “data” mainly through their advertising platforms, but what prevents them from using this information to directly feed their business, or from selling it for the benefit of others?
In other words, what prevents Amazon from becoming a real estate portal as well?
What prevents Facebook from expanding its functionality and becoming a marketplace? Oops, they already did! Today, you can see thousands of properties advertised across the platform.
It goes without saying that Google could probably do whatever it wants! Real estate portals, marketplaces, even online real estate agencies…
All of these companies have immense financial power, expertise and information. They can start competing with local professionals, online agents, portals, and even the largest real estate companies. They could take control of a huge chunk of the real estate sector.
The real estate sector is one of the main pillars of any developed economy.
In early 2016, Savills World Research’s research team reported that the value of the global real estate sector had exceeded $ 217 trillion. This makes it an extremely attractive industry for companies looking to increase their revenue.
Just like a Ferrari, everyone would like to jump aboard and start driving.
In conclusion, how realistic is all this?
I don’t think this real estate escalation/evolution is inevitable.
Large technology companies are much focused on their interests and their core business, the products and services that make up this core have a constant need to be monitored and improved.
Personally, despite all the potential there is, I doubt a massive and decisive shift to real estate is on the horizon.
These large companies are more likely to become part of “side projects” that will see them invest and collaborate with small real estate or PropTech companies to solve common problems in the sector.
What won’t be there is a real estate business with their name on the door.
Selling their data is a much easier task than analyzing it and acting on your own, easier than all the effort required to position yourself in a new market.
If you look with cynicism, it can also be said that the sale of data to other companies also mitigates the responsibility of these technology giants towards the consumer, making the responsibility fall on others, who focus more and more on the desires, the needs. And the specific personalities of all of us.
And you, what do you say? What do you think? Do you believe that the tech giants will soon have a leading role in the real estate sector?
Tags: amazon monopoly, amazon oligopoly, amazonfacebook, apple google amazon, does amazon have a monopoly, does google own amazon, google amazon facebook apple, google apple merger, google facebook amazon apple, is amazon a monopoly, is amazon a monopoly or oligopoly, is apple a monopoly, is apple a monopoly or oligopoly, is google a monopoly or oligopoly, monopoly companies 2018