Step 2 of 5 · 2006–11

A brand earned in the press, not bought

Zillow chose to build its brand without buying advertising. Board member Bill Gurley asked what the team would do with no marketing budget and pushed it toward features people would talk about ZLX-1. Barton credits Amy Bohutinsky with a system that fed local housing data to newspapers, which always had room for a story on home prices ZLX-1. The 2011 IPO filing says marketing at Zillow 'starts with product development' ZI2.

The result was an audience that came to Zillow by name. In March 2011, 19.4 million people used Zillow's website and apps, up more than 90% in a year, 'with virtually no advertising expense to date,' and more than two-thirds of traffic was direct ZI2. A visitor who types the name costs nothing to bring back and does not depend on Google, which Barton names as the main risk for sites that live on search traffic ZLX-1. Step 5 shows that habit lasting.

Rivals Trulia also grew with no marketing spend, mainly through search and its users' questions and answers ZLX-2. In early 2011 it had more page views but fewer unique visitors than Zillow's 16.8 million, and Flint called page views 'the monetizable unit' TR2.

Owned Media

Step 4 of 5 · 2013–15

Outspend on brand, then buy the number two audience

A marketing war

By 2013 the two portals showed the same listings, because agents sent theirs to every site ZLX-2. Audience growth now had to be bought. Zillow doubled its advertising in 2013 to about $40M and planned $65M for 2014, against Trulia's $45M ZLX-4 ZLX-8. Flint later said the contest stopped being about product and became a marketing battle ZLX-9. The larger audience brought more agent revenue to spend: in June 2014 comScore counted 46.0 million unique visitors for Zillow and 27.4 million for Trulia ZLX-7.

Buying the second audience

Zillow had proposed combining in late 2011 and again in 2012; Trulia declined, expecting more from its own IPO GFA-4. When Barton proposed again in June 2014, Trulia's board noted the rising marketing and product costs of scaling alone GFA-4. The deal closed in February 2015 for $2.5 billion in stock ZI3.

Zillow kept both consumer sites and combined the work consumers did not see. Kathleen Philips, who helped negotiate the deal, says keeping both brands was always the plan because users had preferences between them ZI1. One team collected listings for both ZI1, and about 350 duplicate roles were cut in 2015 ZI3. From September 2015 an agent bought Premier Agent once and appeared on both sites ZLX-10. The FTC had found that agents kept other channels and often left the portals ZI4, so the gain was reach and lower cost, not captive customers.

Rivals Trulia could not match the budget, and Flint says both companies knew the market was hard to defend because agents listed everywhere, so the merger was a drive for scale ZLX-7 ZLX-2. Rascoff said Zillow passed on Realtor.com because a brand with a shrinking audience is hard to revive GFA-5.

Brand MarketingM&A StrategyScope economies