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Classified widget provider vFlyer has launched a low-cost Web site development and hosting product for real estate agents to post individual listings online.

Like the rest of vFlyer’s product line (explored here), this is a seller-centric tool that aims to reduce the amount of cost and friction for real estate agents to market themselves and their properties online.

The tool essentially lets agents post individual property listings on their own micro-sites, which can be managed easily and hosted by vFlyer for a nominal cost ($10). Real estate is a good entry point for this type of tool because of the vertical’s propensity toward experimentation with online marketing and inelasticity of ad spending.

The same is true for autos, as we’ve pointed out in the past, and comes down to factors such as high margins, high consideration items, tight competition and traditional pressure for leads.

I spoke with Oodle CEO Craig Donato yesterday, who affirmed this notion and likewise reported from his vantage point than autos and real estate generally comprise early adopters.

“As auto Web sites start to qualify leads for dealers and real estate Web sites qualify leads on behalf of their agents, we’ll see enough interest grow, and we’ll reach a tipping point,” he says. “This also applies to smaller companies working on search engine marketing and search engine optimization in these verticals.”

This is also supported by recent data from the Newspaper Association of America that show real estate spending largely shifting from newspapers to online.

Make a Name for Yourself

The challenge for vFlyer (and most online marketing providers) is differentiation in a quickly crowding and fragmented local search market, Donato asserted. This applies to both the sell side (advertisers) and buy side (consumers). For advertisers, the choices are myriad and disorienting, which causes a difficult environment for differentiation, especially without a physical sales force.

VFlyer’s new product, and all its products, can be very useful to advertisers, but its challenge will lie in marketing and differentiating itself to online marketers. The low hanging fruit will be real estate, as mentioned above, and autos, where it has already created a number of classified ad selling products and widgets.

The product also interestingly fits into the Webification trend to bring more businesses online with cheap and easy products to host and manage a Web site.

The slowing revenue growth in paid search and other forms of performance-based advertising is partly due to the fact that a majority of SMEs aren’t online at all (among other factors). Bringing them online with cheap and easy Web development, hosting and management is the first step toward converting them to online advertisers and expanding this addressable market.

“We’re entering chapter two of e-commerce, where more and more of the people that buy and sell things locally are starting the lead acquisition process online,” says Donato.

Google and Yahoo! have provided free and cheap hosting products as an on ramp to the Internet (or training wheels, as I like to call them) for a few years. But there is a visible uptick in product development from smaller players such as, and consolidation happening in the Web hosting industry (i.e., Websitepros/, Affinity/Hostway) to gain capability across Web hosting and marketing services.

We’ll examine the Webification trend further in an upcoming report.

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