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CoStar to spend a billion dollars on marketing in fight for portal crown

Publish Date: February 08, 2024

Written by Jim Dalrymple II

- Originally published at Inman News - Jim Dalrymple II

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Amid a relentless battle for the real estate portal crown, CoStar this week is launching a marketing blitzkrieg that will include Super Bowl ads, celebrity endorsements and an unprecedented war chest meant to catapult the Homes.com brand into basically every American household.

CoStar CEO Andy Florance publicly provided details on the campaign for the first time in a call with Inman Thursday afternoon. Florance said his company will run four different commercials during the Super Bowl on Sunday. One of the commercials will focus on CoStar’s Apartments.com rental portal, while the other three will focus on Homes.com. Actors Jeff Goldblum, Dan Levy and Heidi Gardner, among other celebrities, will appear in the ads.

CoStar will then continue to run commercials throughout the year, including during major cultural events such as the Oscars and NBA playoffs. Florance said the campaign will be four times the size of the blitz it ran in recent years for Apartments.com, which saw Goldblum’s Brad Bellflower character become a ubiquitous feature on streaming platforms and other media. He added that the effort will be the “biggest marketing campaign ever run by any real estate organization in the entire world.”

“It is orders of magnitude more than we did for Apartments.com and larger than anything anyone has ever done before, by far,” Florance added.

Florance said CoStar is not disclosing the exact amount it’s spending this year on the new campaign, but noted that it “rounds up to a billion.” He added that when factoring in acquisition costs, content creation, search engine optimization and other forms of soft marketing, the company has spent “multiple billions” bringing Homes.com to the market over the last several years. And he said the company is doing all of this because it believes in the product it has built.

“We’re confident we have the best site now by far,” Florance told Inman. “We’re confident we have an agent-friendly model.”

CoStar has also been engaged in a heated rivalry with Zillow for the last several years. Asked Thursday if he believes CoStar’s residential business can surpass Zillow, Florance replied in the affirmative.

“That is absolutely the goal,” Florance said, “and I believe we will pass them.”

Florance didn’t say specifically when he thinks that might happen, but said CoStar is in the residential space for the long haul.

“You do it by working away at it,” he added of claiming the number one spot.

Florance’s comments come just days after CoStar quietly posted a video laying out the company’s marketing strategy for Homes.com. The video — which as of Thursday morning was not publicly listed and required a direct link to see — targets real estate agents and states that the company has invested $1 billion to “drive 80 billion impressions” and reach “more than 90 percent of households.”

The video also echoed Florance’s comments, describing CoStar’s Homes.com advertising efforts as the “biggest marketing campaign in real estate history.”

The agent-oriented video went live just days after CoStar posted several consumer-focused ads to YouTube that featured Levy and Gardner, as well as rapper Lil Wayne. Those adds promised “a powerful new home-shopping platform,” and ended with the date of this upcoming Sunday — which is also when the Super Bowl is being held. Florance had previously teased the celebrity aspect of the campaign from the stage at Inman Connect New York in late January.

Those same celebrities also appear in the video for agents. Goldblum has a blink-and-you’ll-miss-it cameo.

Among other things, the agent video explains that CoStar plans to run Homes.com ads on streaming platforms, broadcast TV, and digital radio, as well as during major events. The video promises agents the results will be “electrifying,” and at one point the camera cuts to Levy, who states that “this will be a gold mine of local intel.”

“No other competitor comes close to our investment to drive leads to all agents,” the video states.

Greg Robertson first noticed the video.

CoStar’s pitch to agents is a major part of its new marketing campaign. While speaking with Inman Thursday, Florance touted the company’s “your listing, your lead” strategy and said that Homes.com will put every agents name and company on their listings. He contrasted that with other portals, which “strip off” broker information when they ingest listings from MLSs. Florance criticized Zillow’s offer to add additional information and branding for a fee.

“That’s a shakedown, a listing shakedown,” he said.

By contrast, Homes.com will include broker branding for free. Florance said that Homes.com’s 80 billion impressions this year should then translate to “100 billion impressions of brokers’ logos.”

“It’s really a marketing campaign for every single agent and every single broker in the United States,”  Florance went on to say of CoStar’s current efforts. “And no one else can make that statement. ‘Your listing, your lead’ means that when Compass has a listing, when Jane Smith has a listing, people will see that Compass logo on our site, they’ll see Jane Smith’s name on our site.”

During his call, Florance also touted Homes.com’s features, saying CoStar has built profiles of 21,000 U.S. neighborhoods. Consumers can use the profiles to learn about everything from schools to restaurants to nightlife in the areas where they’re home shopping. The neighborhood profiles also include drone footage, with Florance noting that CoStar did 375,000 drone flights in 2023.

“We have the largest drone fleet in America other than the military possibly,” Florance said.

The new campaign to draw atttention to Homes.com is part of an aggressive, multi-year push into the world of residential real estate. Long a dominant player in the commercial space, CoStar began making a play for residential consumers as it acquired brands such as Homesnap and Homes.com, in 2020 and 2021 respectively.

Homes.com has now become CoStar’s flagship consumer-facing residential brand.

Florance has also been open in his critiques of rival portals, suggesting for example that Zillow — the top consumer portal in the U.S. — “hijacks” listings and “blackmails” agents. During Inman Connect New York last month, Florance reiterated his criticism of rival portals, this time throwing Redfin and Realtor.com into the mix as well.

Recent data shows that Zillow remains far and away the largest portal in the U.S.

However, CoStar’s massive size — as well as its apparent ambition — made it a formidable competitor even before this latest marketing push. In December, analyst Mike DelPrete noted that CoStar had managed to grow Homes.com significantly and quickly via a steadily increasing advertising budget. In 2022, that meant CoStar outspent Zillow by a factor of two. In 2023, CoStar was on track to beat the rival portal’s spending by 3.5 times. DelPrete also noted that CoStar is more profitable than any other major portal maker, and has more cash.

“Competition between portals is a marathon,” DelPrete argued as 2023 came to a close, “and cash in the bank is not only a requirement to play the game, but a critical prerequisite for success.”

Update: This story was updated after publication with additional commentary from Andy Florance’s call with Inman.

Email Jim Dalrymple II

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