Redfin’s Glenn Kelman makes about-face regarding paid advertising

A few weeks ago, prior to the announcement of another $14M cash infusion, Redfin’s Glenn Kelman said “If Redfin has to pay a media site for traffic, we will not be able to make real estate better.”

Just a few months before that, he spoke again about not buying advertising: “The only ads we’ll pay for are the ones we show to millions of people on our own site, for free.”

But in a dramatic about-face, Redfin has begun buying advertising again, this time paying for such key words as “Seattle Real Estate” and apparently appropriating the name of my own business “Seattle Dream Homes” in an advertising campaign using Google Adwords.

What is the cause of this sudden advertising campaign and why the likely appropriation and use of a tiny competetors exact business name?

As the Business Journal points out, Redfin is not in the top 10 of most-visited real estate sites, which gives them perhaps a 1% market share.

They recently accepted another $14M, even though in interviews Kelman claims Redfin is profitable and doesn’t need it.

Zip Realty recently converted their employees to independent contractors and also discontinued making rebates to buyers. If Zip couldn’t make it, how could Redfin, with their 100’s of employees and 50% commission rebate? With that kind of business plan, they need to make up the refund with volume, which could explain the sudden backtracking on advertising.

Interesting enough, they don’t seem to be advertising in every city, just Seattle. I suspect that is because Seattle remains their cash cow and the media here is particularly friendly to them. A certain tech writer reports every burp and fart and that continues to give the company free publicity. They also seem to have the most employees located in Seattle and they seem to be very top-heavy in administration and technical support here, and they are advertising for dozens of new jobs in the Seattle area.

It’s interesting that Redfin appears so desperate as to try to siphon off my customers using the exact name of my business in their Google Adwords. Could this really be the business plan of a successful and profitable company with 100’s of employees and millions of dollars, to try to skim business from one little tiny real estate broker? Wow.

Update: It was pointed out to me that one gets similar results when one searches for Seattle discount brokerage “Findwell

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  1. Kristi

    I’m pretty sure that they simply have the words: Seattle Homes – marked as Broad Match in Google and it’s picking up the extra dreams. :)

  2. Gene Degeberg

    It could be that they’re buying “Seattle Homes” but they could also be buying “Seattle Dream Homes”, it’s hard to tell. Either way, they said they weren’t going to buy advertising. What’s been happening to their business to change their minds? Business must be slow in Redfin-Land.

  3. William Stroud

    While using someone else’s business name in keywords or meta tags is not against Google’s terms of service, it does violate the Realtor Code of Ethics and they are members.

    Standard of Practice 12-10 in the Realtor Code of Ethics:

    Standard of Practice 12-10

    REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from:

    “deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers.” (Adopted 1/07)

  4. allisonzaca

    It looks like they’re using Findwell as a search term too.

  5. Marlow Harris

    Allison, you’re right. When I search for “Findwell real estate”, Redfin comes up as the first advertisement. I’ll post the screen shot.

  6. David Losh

    I noticed the ad placement last week and mentioned it on the Seattle Bubble. Tim immediately denied it. The following day it was ReMax who was advertising, but they always do.

    There is a chart that I have posted before, but can’t find right now, that ranks redfin very low on web traffic.

    I don’t understand why any one would give them another $14 Million. It makes no sense. The technology is very low. The shared search platform I understand, coupled with a Zestimate, or sales history. I get that, but that doesn’t translate into an property analysis.

    The other thing that I mentioned is that the forums are severely monitored. They seem directed at making a sales pitch more than an exchange of ideas.

    All in all it’s a Real Estate sales site set up for lead generation. My thought is that they must make money by selling those leads to other vendors.

    Thanks for the rant.

  7. Marlow Harris

    It looks like Ewing and Clark has used the phrase “Seattle Dream Homes” in their meta tags. I’ve trademarked the term. That’s irritating.

  8. The Tim

    David, I did not deny that Redfin was paying for ads on Google. Go back and re-read our exchange.

    Your comment implied that Redfin was somehow paying for better placement in Google’s search results, and I pointed out that it is not possible to do that. I made no comment one way or the other about Redfin placing Google ads, because that’s not my department.

  9. David Losh

    And once again you can tell yourself whatever you want, but I’d also like to get an answer to my question of today.

    You had a post about staging art, where people were clicking into the redfin site. Today you had a house comparison post where again you had people clicking into the redfin site. Both of those posts did seem a little odd.

    So are those posts meant to drive people to the redfin site?

  10. Kim

    If Redfin is marketing, they should at least be doing it in an honest way. They shouldn’t be releasing a statement like that, if in actuality they do pay for marketing.

  11. Marc Brodeur

    Redfin….soon to be Deadfin?

    I noticed they always are getting more infusions of VC money. If they are so profitable, why do they constantly need infusions? I know some local agents that briefly worked for them but the model appears broken as they all leave and there is no loyalty.