Zillow is doubling down on national advertising in an attempt to bolster its brand in the online real estate category. Zillow CEO Spencer Rascoff announced today in an earnings call with analysts that it intends to spend $65 million on advertising in 2014, up from $40 million last year. (The first year that Zillow experimented with national TV advertising).
Rascoff said the advertising efforts are working, helping Zillow distance itself from competitors such as Trulia and Realtor.com. Here’s what Rascoff had to say about the boosted ad spend on the call today:
“In our quest to become a household name, the time is right for us to now press our advantage and further elevate our brand and extend our category lead. The path to category leadership over the long-term runs through audience. While we will forego some profitability in the near term to grow our audience market share, the long game is about capturing revenue share and expanding profit margins. First, we win audience Then we reap most of the revenue in the process. We are in growth mode, early on in the midst of executing on a multi-year brand-building effort to secure strategic competitive advantage, and we couldn’t be more excited about the massive opportunities in front of us.”
Amazingly, Zillow’s audience skyrocketed in January, a month when the company curtailed its advertising spend. It attracted just shy of 70 million unique visitors for the month, a record for Zillow.
Even with the rapid audience growth, Rascoff said that the company has a “long way to go” until it gets to total market penetration. In fact, offering some back-of-the-napkin math on today’s conference call, Rascoff estimated that home buyers and sellers who are nearing a home decision turn to Zillow in less than five percent of real estate transactions.
“There’s a huge growth potential in making Zillow a deeper part of more real estate transactions,” he said.
Zillow was sitting on $434 million in cash, cash equivalents and investments at the end of 2013, so it has plenty of money to spend as it looks to bolster its brand.
Here’s a look at Zillow’s current ad campaign, with Rascoff saying that new creative will be rolled out in the coming weeks to capitalize on the peak housing season.