Zillow Crunches User Data to Target Homeowner-Based Ads

Relying in part on homeowner pride and desire to set the record straight about their properties, real estate site Zillow.com has found a way to benefit from the inevitable inaccuracies in its reports.

Some of the data being used in Zillow’s Home Direct Ads program, officially launched today, is derived from information volunteered by homeowners who have “claimed” their homes on the site. Since September 2006, Zillow has allowed homeowners to “claim” their properties and the Zillow descriptions of more than a million homes that have been revised by the homeowners.

By claiming their homes, owners can correct errors or eliminate omissions displayed on Zillow’s computer-generated profile of their properties. “We opened up the database for owners to say, ‘You know what? You got my square feet wrong,’ or ‘I just did an addition,'” said Greg Schwartz, Zillow’s VP of sale. “It also allows owners to prepare an estimate of what the home’s real value is.”

When that happens, Zillow takes note and those changes help the company create internal portraits of homes, profiles leveraged in Zillow’s new Home Direct Ads program. The information is a potential gold mine for advertisers once it’s crunched by Zillow’s algorithms and combined with other revealing data gathered to drive the patent-pending program, he said.

Home Direct Ads is billed as a tool designed to help advertisers push their ads where they’re likely to be most successful. It offers targeting of ads by street address, house value, and “psychographic cluster,” Schwartz said of the new initiative.

Zillow, which has more than 70 million U.S. homes in its database, allows Web site visitors to see the estimated value of a home and nearby properties. The values are based on property tax assessments, previous sales and other information obtained by Zillow.

When a homeowner types in an address on Zillow’s Web site, Zillow presents an aerial view of the home. A person can drill down to get more information about the house and others in the neighborhood. If somebody “claims” the house, the information will be more detailed and potentially more accurate.

Zillow also follows indicators to predict when people are planning to put their homes up for sale or begin fix-up projects, according to Schwartz.

“It’s a pretty cool model,” Schwartz said. And one of particular interest to cable companies, home insurance providers and marketers of home improvement products and services.

How does Zillow figure out when someone is planning to move, short of hiring a fortune teller? They keep a close eye on traffic patterns to a particular home’s Zillow page as well as details added by the homeowners.

With its new home and geographic targeting tool, Zillow gives advertisers a chance to direct ads to people visiting a specific address on the Web site. Schwartz said this type of advertising is similar to direct mail in many ways and he believes Zillow is the only company doing it online. “All this targeting is in the context of selling, buying or renovating a home. I don’t think anybody in the traditional real estate industry is doing this,” he said.

He stressed that, despite the depth of Zillow’s new targeting capability, user privacy is maintained. “We don’t have names,” he said. “We don’t want names. We are not mixing online with offline data.”

Schwartz, previously VP of advertising sales at CNNMoney.com, said Zillow’s 20-person in-house sales team is selling the Home Direct Ads to large advertisers. For local and individual advertisers, the company, in April, introduced Zillow EZ Ads, a self-serve system that allows companies to create and buy ads to be shown in specific ZIP codes.

This story has been updated. An earlier version suggested Zillow had just begun allowing people to “claim” their homes. The feature’s actually been available for some time.