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Zillow announced this morning that it will integrate a new ad targeting feature known as HomeDirect, which will serve geographically, demographically and contextually relevant ads within individual home listings. This will come in three flavors; targeting individual homes that its algorithms determine to be near the point of sale, targeting homes that are of a certain value, targeting based on geographical significance to advertisers.

All three of these measures will allow advertisers to better target users down to the home level. Ads will target those who view homes, as well as the home owners themselves, who generate 60 percent of hits to individual home listings, according to VP of Sales Greg Schwartz.

Zillow also claims to have a growing audience that will be attractive to different forms of national and local advertisers. Some of the attributes of this user base are:

  • 4.4 million unique visitors in August 2007.
  • 90 percent of Zillow users own a home, and 71 percent indicate that they plan to buy or sell a home in the next 24 months.
  • Zillow’s audience has an average household income of $90,000/year.
  • Zillow’s audience is demonstrably “house proud” and engaged and active on the site. In the past year, 1 million home owners have claimed their homes and updated facts about their home (such a number of bedrooms and the results of recent remodeling), which indicates that they are interested in goods and services related to enhancing the value of their homes.

The third point is behind the feature of the new HomeDirect Ads product that lets advertisers target ads to individual income levels and listings that correspond to different levels of home value.

Bringing in New Advertisers

HomeDirect Ads could also appeal to different kinds of advertisers that Zillow hopes to tap into such as cable and telecom providers that want to target people who are moving or buying new homes. There is also, interestingly, an opportunity to tap into automotive advertising because of the correlation between auto purchases and life events such as home purchases.

“A little known fact is that moving correlates highly with buying a new car. You tend to move when you’re getting out of school or having a kid, and each of those steps requires something different in your transport,” says Schwartz. “This is going to light up our 2008 automotive efforts. There are a lot of tier 2 automotive dollars of regional dealer associations and lease offers that have jumped all over the new mover targeting and the cleaner geotargeting that we have.”

The product will also augment the larger effort to increase sales through a growing physical sales force — something we’re seeing many online pure plays increasingly build out to varying degrees (most recently in yesterday’s announcement from Yodle).

“We’ve got 20 folks on the team right now across the country,” says Schwartz. “We’ve just finished staffing that team in our first wave of hiring and the 2008 ad planning process is going on right now. We’ll do some more hiring to attract some top sales talent.”

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