Episode 19 - The ILS Conundrum

Mark, since I'm partially responsible for stimulating this post, I suppose I'd better throw in my two cents! I believe that any business that remains stagnant will fail, so our goal as an industry should be to evolve. This means that the ILS space should seek evolutionary opportunities that align with the changing needs of the multifamily space and of renters. Alternatively, I also believe this evolution relies heavily on the willingness of the multifamily industry to support change, which has the potential to be scary and jarring as most change does. In this we heartily agree (I think!).

Whether or not this change is in the direction of online prop listings becoming customizable content portals and ILS's shifting towards a social network/rental search hybrid is debatable, but the dialogue you've started here is valuable. I definitely do not believe the current model is broken (where we disagree), but I believe it can be improved (significantly, in some areas). My team is making strides by spending their days putting themselves in the mind of renters and delighting them via our search experience, mobile channels, editorial content, etc. We have many other folks dedicated to creating these same terrific experiences for our advertisers. I'm confident we're doing all we can given the guardrails the industry has established for our space.

That said, our ability to innovate will be tied to what the multifamily industry believes to be effective in marketing their communities online (the guardrails, to use my earlier analogy). The question of ROI must be addressed. Will any evolution of the ILS model allow for ROI to be determined as something other than a trackable action that led directly to a lease? Can a new model of ILS also help build brand, which carries a much different set of ROI expectations? Should the deciding factor ultimately be what the renter wants/needs in their decision process and not what we as multifamily marketers want to convey to them? These are the questions I regularly ask myself and the ones I hope you post has inspired others to ponder.

TG

Tim, you know better than most what users of your site want to see when they're shopping for an apartment. Would you be able to share some of that information with us without giving away too many secrets? The only way we move this conversation forward, give you the opportunity to truly innovate and improve advertiser ROI is to understand what your audience - future renters - want most.

Successful media outlets like magazines, TV networks and blogs put their audience first, then find advertisers that want to reach that audience. With the ILS model, we tend to do the exact opposite, putting the needs of the advertiser first, regardless of how the prospect actually wants to shop for an apartment.

If apartment marketers continue to put their fears ahead of their prospects' needs, it prevents you and your competition from doing your job effectively. The sooner we start putting the needs of the apartment hunter first, the better off we'll all be.

Mike, as expected, you and I are of the same mind. If the information we have on renter preferences can help move this conversation forward, I'm willing to help. Let me give this some thought and once I have something to share, I may go ahead and post to this forum.

Hey Mark,
Thought I would weigh in here, I find it hard to believe that ANY Prospect looking for an apartment finds ILS Land a favorable experience.

The ILS’s “trap” the prospect in ‘ILS Land” and don’t really let them out, meaning they are not Link Friendly back to the apartment operators web site. Increase the apartment operators web traffic, which will have a direct correlation to Renting More Apartments.

The marketing method by most apartment operators is to use ALL of the ILS’s at the same time shotgun style. Pretty strange strategy actually, and there doesn't seem to be much Brand Loyalty, meaning apartment operators that only use a single source ILS,

I find it hard to believe that ANY Prospect looking for an apartment finds ILS Land a favorable experience.

Eric, I have to respectfully challenge this assertion. As this thread rightly points out, there are improvements to be made, but there are more satisfied ILS users than frustrated ones. Our rate of user recommendation is on par, if not higher than, many established sites outside of the rental search category. I suspect this is also true for other ILS's. I've not been shy in acknowledging the need to evolve from our current state, but things are not as dire as you suggest.

Also, several ILS's do link to advertiser sites and have for some time. The issue isn't really about "trapping" users, it's about industry accepted definitions of advertising ROI. If property managers, in general, viewed visits to their websites as highly as they do phone calls and emails, the approach taken by ILS's would surely shift. Traffic to your sites (and the brand building opportunities those visits provide you) is of paramount importance to you, but surely you know this isn't universally true amongst your peers.

Change is a shared responsibility across our industry and not one any ILS can shoulder alone. I remain hopeful that your powerful voice as an industry innovator/disruptor will help further the dialogue I think we both feel is needed.

TG

Eric, I also generally disagree with the assertion that prospects don't find ILSs useful ... I just think that the experience could be a lot better for all parties, particularly the apartment shopper. The browsing experience on sites like Amazon.com is a good indicator of what apartment shopping could be. The more we can do to provide a great experience to the prospect, the better off we're all going to be.

I absolutely agree with Tim's comment that advertising ROI is misunderstood in many ways (and that's not unique to this industry). However, to Mark's last point, it's not all on the ILS. I think the obligation rests as much on the apartment marketer as it does on the ILS. Mark and Eric have reason to be concerned because they're creating strong brands that actually mean something to the people in the greater communities they serve. In a comparative setting based solely on price and number of bathrooms, they don't get to tell that story about their brand very well.

However, those companies with strong brands have more options -- people will seek you out, or they're much more likely to mention JC Hart to a friend. So while I agree that the shopping experience on the ILS can be better, I believe the obligation is on the marketer to tell a better story. Eric, as you've said many times before, we shouldn't think that guys like Tim can do all of our marketing for us.

Thanks for this, Mark. You definitely make some good points - and I do agree - there is a place for the ILS model - just may be a smaller portion with time. We've seen a great number of our clients cut their budget in that space and devote more of their marketing budget - with great success - to pushing their own website and online presence. It makes more sense on an ongoing and brand-building basis - but we've also seen more quality leads come from direct site interaction - than from the ILS side...

I couldn't agree more. It's absolutely important for a potential resident to feel like they've found 'home'. Fostering a sense of community is key - and it is very hard to do that on an ILS.

And while following a lead from their initial starting point (I need a new apartment) to the move-in is obviously not completely realistic today - there is a lot you can do to capture them from them moment of contact (call tracking numbers, IP address, etc..)

I would also argue that fostering that sense of community through a well-marketed web site will help build your brand online and at the same time - show your prospects that they are finding something - a home as it were, rather than just a
Craigslist listing.