Death by 8 cuts: when you depend on giant ad platforms like Zillow more than you should.

For the real estate industry, as in every other industry, there are a few giant digital platforms that have changed the industry, because they provided utility or joy to consumers. Many losers and few winners have resulted from these tectonic shifts. In residential real estate, Zillow Group has won, and most others are dying not by a thousand cuts, but 8 cuts that bleed out the rest of the market over a period of about 10 years. 

For anyone working in real estate, these are the lessons about how to think of Zillow Group, as explained by other industries that have been disrupted by giant media companies Google, Facebook, and Amazon.

Death by 8 cuts. Here they are.

1. Giant media company builds awesome digital products for consumers. Consumer use the products like search, content, or shopping. This all creates data.
2. The giants soak up most of the advertising dollars from the traditional category leaders because they have this data.
3. Giants charge advertisers for space and eyeballs, but are really learning everything (aka data) about their advertiser's clients (consumer data).
4. Then, the giants don't tell their advertisers anything useful about the consumer who see the ads and respond to them (data).
5. The advertiser is left guessing about what consumers like (data), or even who they are (data).
6. The advertiser is left to buy leads and clicks (lame data) from giants to acquire customers. They have no knowledge (aka analytics data) about their former, current, or new clients (strategic data).
7. The advertiser - but really their entire company - is left without feedback (data) about their clients preferences so they don't know how to improve their products. The advertiser gets clicks, leads, and online traffic; these are surely good things to have short term, but long term …
8. The giants know everything about consumer intent and demand (data) even before the advertiser does, so usually the giant does a vertical or horizontal integration to offer their advertiser's consumer client something before the consumer buys from the advertiser. See?

We saw it with Google and Facebook. Zillow is doing it now to the real estate industry via instant offers aka iBuying. They know who wants to sell their house, so they try to sell them a Zillow house, not an agent's house. Pretty simple. Meantime they sell advertisers clicks and leads. It's like eating Salmon (seller leads) while giving your kids chicken nuggets (buyer clicks) for dinner. I do it to my kids, why wouldn't Zillow do it to theirs?

Control your data. Don't pass up the Salmon for chicken nuggets.