The Evolution of ILS
As relevant as ever, Internet listing services are the best aggregators of data.
By Jeffrey Steele, Contributing Editor
Even as some property management firms question their worth and seek alternatives, Internet listing services (ILSs) continue to evolve and provide value.
There are a number of reasons for their continued relevancy. Those factors start with their effectiveness, says Esther Bonardi, industry principal with Yardi’s RENTCafe Solutions based in Santa Barbara, Calif. “ILS sites are relevant because they drive a lot of traffic,” Bonardi says. “A typical apartment community can’t afford robust paid search engine advertising and does not have the skilled staff to keep sites optimized to compete with the big boys. However, through an ILS, their communities can get found online. And ultimately they receive leads and leases at a manageable cost.”
Todd Katler, chief strategy officer at Property Solutions in Provo, Utah, says ILSs remain the best aggregators of data. “When you’re at the 10,000-foot level, property management companies are not big enough to provide the kind of choice consumers are looking for,” he observes. “If a consumer is searching on a market level, as opposed to a submarket level, few property management companies can offer enough content.”
Consumer feedback consistently shows apartment shoppers appreciate choice, according to John Kobs, co-founder and CEO of apartment search engine ApartmentList.com. And ILSs remain the most efficient place for them to compare a wide array of properties. ILSs offer multifamily marketers compelling channels to help generate search traffic, lower marketing costs
and still provide meaningful levels of demand and prospect interest at leasing offices, says Kobs.
Know the offerings
ILSs are differentiating in a number of ways, including how they price their services, the add-ons and ancillary services provided, as well as their mobile offerings. In terms of pricing, some ILS sites offer a subscription pricing model, while others price per lead, or per signed lease agreement, Bonardi explains.
Kobs sees savvy ILS functionality advancements and attention to slicker design catering to younger residents and prospects on the go. Of the effort to differentiate, Katler notes: “The ILSs would say they differentiate themselves on some interface characteristics. But there’s probably less meaning to that differentiation as compared to the number and quality of leads they can provide, and the raw amount of content that’s searchable.”
At For Rent Media Solutions in Norfolk, Va., senior vice president of national sales and development Brock MacLean says ILSs all tend to have different strategies when it comes to their business models. “We have evolved to be a very consumer-focused brand, with touch points across a variety of media,” he says of the company’s ForRent.com. “Consumers access us from multiple forms of media, [which include] social media, video distribution, traditional print and mobile. Once there, they are gathering data about their decision-making in their next apartment home and reaching into other forms of media to validate what they’ve found. Or they may be seeking additional information. They may find a community on ForRent.com but look to see if they have a Facebook business page.” As MacLean suggests, mobility is an increasingly important selling point. ILS sites have evolved to offer mobile sites and mobile apps, responding to the growing number of local searches performed over smartphones, Bonardi says. In addition, the ILS sites are starting to provide more detailed location information, she says. This includes interactive maps with location details about schools, area retail centers and restaurants, which enable renters to gain a better feel for the areas surrounding apartment communities they are considering.
Upstarts in the space
While ILSs continue to have their place, it’s becoming smaller, and the percentage of property management budget devoted to ILSs should be shrinking, Katler says. Odds are against startup ILSs achieving enough critical mass to offer benefits to both consumers and property management firms, he asserts. Yet companies keep entering this space.
Why? The reason, Kobs believes, is that finding and leasing an apartment remains a frustrating experience for many. “Recent entrants have identified specific consumer pain points and seek to solve them through innovative technologies,” he adds. “The influx of Gen-Y [members] into the apartment prospect pool and their demonstrated desire to interact with cool, web-driven marketing provides a fantastic opportunity for companies with both new and proven ideas to help connect searchers with communities looking for residents.” Bonardi sees much the same phenomenon occurring. She admits the market is “already flush with opportunity to advertise online.” But she adds the newest ILS sites are bringing something new to the table. “That new feature might be a complete integration with a core operating software, with online applications built right in,” she adds. “[Or] it might be a new and different approach to attract leads through reviews and ratings, making the apartment search more social.”
ILS sites are evolving and will continue to evolve. One example of that metamorphosis is in the provision of services to people both before and after they are renters. Combining ForRent.com with its sister site, Homes.com, For Rent Media Solutions is providing a life cycle of consumer real estate search.
That extends “from their search for student housing to their choice of a retirement home,” MacLean says. “We’re looking to evolve beyond a search for a home to a lifestyle. We’re giving them reasons to come back to our brands, ForRent.com and Homes.com, by including on our site things that can enhance lifestyle, from how-to videos to blogs to do-it-yourself projects.”
As well, there’s a genuine trend toward incorporating ratings and reviews into ILS frameworks. “[It] is compelling both the property management firms and their ILS partners to take a hard look at how we can best communicate what it’s like to live at any particular apartment community,” Kobs says. “Honesty and transparency will probably assist a lot of firms in those efforts. If you’ve got a cool apartment community run by great people, that experience is ultimately going to be communicated by brand advocates online.”