Interview: Aimee Johnson, CMO Zillow, Part 2


My guest today is Aimee Johnson, CMOof Zillow. This is Part 2 of the interview where we went deep on the Zillow business model and how Aimee is driving growth there.

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Edward: This is Marketing BS. This is part two of my interview with Aimee Johnson. Today we’re going to explore how she’s driving growth as CMO of Zillow.

Aimee, I’m sure my audience is very familiar with Zillow. Zillow is the first to expose data that was really not available anywhere else. But now if I search for a property address, I can find details on Zillow, but also Redfin, Realtor,, point2homes, and dozens and dozens of others. What makes Zillow unique now from the consumer side, or is it just brand, equity, and trust that have been built up over the years?

Aimee: Certainly brand, equity, and trust. Customers [...] we’ve helped them to dream and buy for 15 years now. Even if you just go on and look on social, the comments were just fantastic about how we’ve helped people find the home that they can move into.

The New York Times had an article about us the other day about the opposite doom scrolling is Zillow. We hope scroll, we dream scroll, and we help you to get through this period of time that we’re in right now. I think it’s a little bit of both. I think it’s the fact that we’ve been really empathetic to the customer. We are very transparent with our data. We want to be the marketplace that you go to because customers should have access to real estate data, and we believe that.

We also believe that you should have access to fantastic agents, loans, and services that now are part of our brand and that we’re moving into as part of Zillow 2.0 for our next decade or two or three in service.

Edward: But is that why customers use you? Because you have better access to these other things? Or again, is it just you got there first and you built a good product, you’re trusted, so you become the default choice?

Aimee: I think it’s all of those things plus it’s our interaction with our customers. The way that our product is set up, the way that our data exists, the way we interact with them, and our personalization. We want you to know the data that we have that meets your needs before anybody else can. If you’re looking for that home right now—especially in this environment—and you want to be the first one to know it exists so you can get on it, to go take a tour of that home, we want to be the ones that give you that information first so you can really get out there and find the house that you know is your future home.

Edward: It’s funny, you mention the opposite of doom scrolling. I was thinking a bit about my time at Expedia. One of the things that we found is the conversion rate from searching to actually purchasing an airline ticket was basically inversely correlated to how good the location was. When people were searching for Hawaii, the conversion was terrible. Everyone was dreaming of going to Hawaii.

But if you search for Arkansas, man, anyone who was searching for Arkansas was buying a ticket to Arkansas. Not that I have anything against Arkansas. Do you guys find a similar thing? Is it almost like the worse the homes the higher the conversion rate?

Aimee: I have to say, I don’t know that we’ve looked at it that way because I don’t know that we should define a home as worst to best. It’s on the eye of the beholder.

Edward: Lower price point homes, higher conversion rate?

Aimee: No. What I would say is that the number of people—we have over 200 million unique users that come into our site monthly over 100 million people—pre-pandemic, there were only about 5–6 million homes bought and sold a year. If you think of the number of people that are looking and then you have the number of people that actually buy, there’s about another 12 million that rent every year.

If you think that this is the biggest ticket item people are going to spend on their house, it’s super expensive. It’s not like, yeah, I’m going to go to the corner store and buy a cola. It happens to be 25-cent more there, but I don’t feel like walking to the Safeway. There’s a lot of time before the purchase to see what am I looking for, what do I want, where do I want to be. It’s thinking of yourself in a different life, et cetera.

What we find is there is an actual life event that happens. When that life event happens, some of these life events will force you to or you will want to change the location of where you’re living. It’s not necessary what you’re clicking on or if you’re dreaming or not, it’s what’s happening in your life.

Once you have that second kid. First kid, you can kind of like, one bedroom’s fine. They’re small. We have a small backyard, there’s a tricycle, it doesn’t matter. Second kid, oh my God, get me out of this house. I need a new house. I need a new house. Am I going to leave my city? I know this city. Schools are important now, and I didn't care about schools before.

I’m getting a divorce. Now, if you’re getting a divorce with kids, you stay close to the kid. If you’re getting divorced or not, you may want to get the heck out of there. We’re finding that there are all these life events that happen and then the question is how do we intersect the customer at the right time where they’re having the life event to be able to help them find the new chapter of their life. The home is really chapters of your life and the next address is the next chapter.

Edward: Aimee, can you walk me through how Zillow monetizes its audience? What are Zillow’s primary revenue drivers these days?

Aimee: Sure. Our primary revenue is actually B2B. It's working with agents. The customers can come and look, and all that is just we want you to have a fantastic time. We partner with the best agents in the market to sell advertising space for them. The majority of our money right now comes from the ad model that we have in B2B.

In a future state, we’re going to have the shift to 2.0, which is looking at what are the services that we can offer also to customers? For example, mortgages. For example, we can buy your house. In 25 markets, we will buy a house and we will sell that house. We have closing services that we offer. There are so many crazy inefficiencies in the real estate industry. How do we work with our partners in the industry to figure out where do we take out those inefficiencies, how do we create customer experiences where we can add value, and monetize some of those value streams that we’ve created efficiencies around.

Edward: I would think, because of the dream scrolling that happens, I imagine you are getting contact with those customers before anyone else. Anytime that happens, there are opportunities. I imagine you could do lead generation for internet providers to new homes. I don’t think Zillow does that, but I know there are companies that do. The way to win on that is to be the first person to talk to the customer. It seems like you are that person.

Aimee: We are and we try to balance. What’s been fantastic moving to Zillow is just the heart of everyone. How do we best serve the customer in their next move or as they’re dreaming? Interrupting them with an ad for a different service that may or may not be something they’re interested in, we’re really interested like, let’s help you dream, let’s help you find your house. While those are opportunities, we’ve decided to really not go after them per se.

We do have some advertising that we do. We have some great customers that we work with, but we don’t do much of that right now.

Edward: How much of your team’s time and effort is spent marketing to the agents versus marketing to the consumers?

Aimee: I don’t know that I’ve cut the work by how much is B2B versus B2C. We do spend a lot of time working with our front line leaders on how we can work with our agents most effectively and efficiently. If we want to bring this dream of, wouldn’t it be cool if shopping for a home is as joyful as moving into one? Even if it’s a huge [...] for anybody out there that’s ever tried to buy a house. To do that, we have to have a relationship with our partners where values are aligned, where we’re both understanding what the end goal is for our customer to get into the house as frictionlessly as possible.

We do work with our agents and our field folks to figure out which are the best agents? What do they look like? What kind of characteristics do they have? How do we communicate with them? Look at all these fantastic services. Here’s how this could be a benefit to our joint customers. We do spend a lot of time talking to our agents that way as well. I don’t know at the top of my head. I can get back to you with the percentage of time.

For those of you that have worked in both B2B and B2C or B2B2C, there’s a lot of effort when you have fewer people. But it is that idea of how are you going to communicate to them, the emails, advertise to them to get more agents in, the ones you want to stick with and stay with. The new products and services that you’re launching for a much smaller number of people than obviously the B2C conversations that we’re having. But the brand is the brand.

As we’re building the brand, we have this Zillow 1.0 we call it, which is we help people search and find. We’re calling it now Dream and Buy. Not just Search and Find—Dream and Buy. If we’re going to take a business that is loved for the Search and Find and for helping you find your next home. Now, we’re going to help you on this journey that used to just stop and I found my house, I’m calling an agent. I’m figuring out what our loan is. We want to help you through all of that.

We have to take the brand for what it stands for today. And we have to say, what are we going to keep with that brand? What do we not need anymore? What are we going to add to that brand? How does that come to life? What does it look like? Not just for our customers, but for our partners and for our agents. Wow, in a year, what do we want our agents to say? Well, Zillow really showed up in this way, and I’m excited they did.

It’s just as important that we understand how our brand shows up to our partners. There are a lot of really fantastic small business owners out there that we partner with, as well as our customers. They have to know, gosh, I didn’t know Zillow actually could help me in this way. I’m going to go with them. Not only am I going to go to them for that, but their services are excellent. I’m going to tell my friends about it.

Edward: Are there conflicts when you’re doing that internally? I know like when I was in A Place for Mom, we had a similar thing. We had properties that we are partnering with, and we had seniors who were looking for properties to stay in. So many of the people internally were focused on the seniors and helping them that our partner kept on coming and be like, no, no, no, no, you can't say that. We can’t use the word facility. Consumers use the word facility, but properties would never use the word facility. It’s all communities.

Do you have these conflicts internally between the people working with the real estate agents and the people working with the dreamers?

Aimee: Yeah. I guess you could say we do in a way. If we’re saying, Zillow is going to offer you this type of service, this type of convenience, this type of trust us in this certain way, you really do have to make sure that the agents that you’re handing them off to or the business partners you’re handing them off to have similar ways of working with your customers. Otherwise, you just let people down.

You do have to make sure that we’re understanding those SLAs and how we’re setting up our partnerships. You also have people that are really precious about the thing they’re working on, which is probably true anywhere you go. Where they’re like, no, no, no, this is my customer. This is my end user. I don't have to think about how the effect is downstream on all these other people. They could figure it out.

There’s a lot of that every day just as there is in any company. But the more that you can run a relay in your company, meaning all your employees know what comes before you get the customer, what comes after you hand the customer off, the better customer experiences you can give holistically. Regardless of if you get it from a partner or give it to a partner, it’s all the same experience. You have to be considering the whole thing.

Edward: Talking about those real estate agents, any time you’re [...] these marketplaces, there are many different ways you could monetize. At Expedia, when you sell a hotel, they take a percentage of the revenue generated from the hotel. You could charge the hotel per impression, you could charge per click, you could charge per lead, you could charge per qualified lead, you could charge per completed transaction, you could charge a revenue share.

Each one of those further and further and further into the purchase cycle and moving more from advertising to almost a partnership. How do you decide where on that purchase cycle you guys should be charging the agents?

Aimee: I can’t go into too much right now. We are working on different types of revenue models. Again, looking at the type of customer experience we want to build, we’re testing something called flex, which is you actually pay when the transaction happens versus for the advertising. Because we all want customers to get houses. The goal is that you’ll land in a place you love so you could be your best you.

The best way to partner is if everybody is incentivized, that the customer ends up in that fantastic house. That happens by an agent closing on the house. If everybody is in sync with the goal, then can the monetary system, can the goaling system be set up such that everybody wins in that scenario.

We’re testing everything from what does it mean if you get paid when the transaction closes out to an advertising model where it’s what does that market in that zip code really warrant in regards to the number of leads, the number of agents, the activity on that market place? And then there are things in between. We’re testing a bunch of different ideas now as we pivoted into this idea of Zillow 2.0, which is still relatively fresh. It’s been about last year.

Edward: Let’s talk a little bit more about Zillow 2.0. You have a new CEO. You’re moving into this new model where you’re taking revenue risk and inventory risk. Zillow’s stock took a hit when you said you’re going to do it, even though I think it’s the right long-term play. If you don’t do that, you’re effectively a media company, and if you do that, you turn into a marketplace. Marketplaces are far more valuable than media companies. It feels like it’s a right long term play. How has it changed marketing, or has it at all?

Aimee: Imagine if you have the best of both worlds? It’s an and, so the brilliance is we have the marketplace which is great. Because we have the marketplace already and that’s doing great. Not only is it the marketplace, meaning that’s how we make money. It’s the marketplace meaning it’s the data, it’s the information, it’s all we’ve set up the infrastructure that actually allows us to evolve into 2.0.

Now, if you have the data, the revenue, and a marketplace, you can pivot and be an and. You can be an and in that wow, we can be a marketplace for others’ loans, and we can say we have loans as well. We’ll put them side by side and you can choose. We can buy a home from you, and we could set you up with this great agent. Either way, you win. You want to sell your house, here’s what it looks like.

We have access to data and people on the one side, and on the other side now we have our own services that we can put alongside it. Just hand it up to the customers and say you choose which one you’d want to be a part of. I don’t think it’s an either-or. It’s definitely an and. I think that’s the strength of Zillow with these 100 million people coming in and these 5 or 6 million people buying and selling every year. It’s how you get from that 100 million to identify the 5 or 6 to come up with the services that you can offer out to them—be it our services or other services—to help them get into that house that they want.

Edward: And how do you deal with the fact that one of those models is going to monetize better than the other? Do you just accept the fact that by offering the second one you monetize less, or do you hope that the incremental choice will more than make up for the fact that one monetizes worse than the other does?

Aimee: Your next podcast will be with Allan Parker, our CFO. I think it’s been fantastic working with a company that’s so innovative as Zillow is. Because just like everybody else, here’s what we’ve tested into, here’s what our hypotheses are, here’s what we know we have to do at bar to keep going, to keep the shareholders happy, to keep our customers happy, to keep our employees happy. And here’s what we’re going to be testing on top of that. Our expectations, it’ll get to this place. If it doesn’t get to that place, what’s our back up plan?

Here’s what our three-year plan looks like. Here’s what we’re doing this year. Here’s what our expectations are. How do you check and adjust along the way? It’s been fun thinking about the possibilities and working our way into those possibilities. Again, checking, adjusting, and moving forward. I don’t know if that answered your question. You have to keep evolving, right?

I go back to a little bit of Starbucks. If we didn’t have the loyalty program, we didn’t have a single source of customer identity, and we didn’t have the mobile order and pay, they couldn’t be doing curbside. They couldn’t be having their stores open during a pandemic. They couldn’t be innovating in things they are doing now that you don’t know about yet that will be coming out soon.

You have to constantly be looking forward to understanding where your customer is going to be. Regardless of, if it’s scary, be smart about the way you’re going to be servicing them in the way your brand can service them, and in a way in which your assets are set up to be the most successful to do so. For sure, the company is definitely leaning forward. Real estate is a mess. How do we help people fix it?

It’s not a person that’s a disaster, it’s all point solutions. It’s no one’s fault. It’s just you think of real estate, you have to go to this guy over here and this woman over here, and you have to go oh, the title again. The deed is paid for the title, how come now I have to pay? It’s not written down anywhere. You even go on Google, I’m going to get a list. The list doesn’t share anything. It’s the biggest check you will ever write. That is just a crazy space for innovation.

Edward: There are line items on that check that will be the second and third biggest checks you will write.

Aimee: That’s the other thing. First-time buyers, even I haven’t in the process of buying a home now. I have two kids. It’s kind of like you have the first one, you’re like, the six months I can’t remember. Then you have the second one, you’re like did that happen the first time or you blocked it out? It’s the same with the fees. You remember the price you pay for the house, but you don’t remember the fees, you don’t remember what you had to do.

How can we help with that? How can people understand it? Everybody just wants, again, to have the best life they can have. Regardless of if it’s a sad moment in time, a happy moment in time, or somewhere in between. It’s just hard, and it’s so much harder than it needs to be.

Again, that’s why the marketplace is interesting because you have that marketplace infrastructure. Now it’s finding the biggest friction points and saying, how can we help in those moments of pain better than anybody else. Whether it’s working with the partner to get there, whether we’re servicing the idea, it’s all in service to get that customer to the next chapter in their life, the next place they need to be because that’s how they move forward.

Edward: Yeah. I think Jeff Bezos said something about how the customer will never be satisfied. There are always ways to reduce friction and make the customer better. You can never be disrupted by just making the experience better for the customer because it’s never going to be good enough. It feels like real estate is one of those places where it’s really, really, really not good enough. You’re TAM for making the experience better is also a long ways away.

Aimee: It’s low hanging fruit, and it does require you to be focused because there is so much opportunity. The question is where is the biggest friction point that you as a business are set up to really satisfy the customer in a meaningful way in a place where the customer is ready to be satisfied? You do have to look at if you’re ready as a company, that they’re ready as a customer if you have the partner based setup in order to satisfy them.

Otherwise, you can get ahead of skis and really lean in on a place maybe where your brand can’t go, lean in a palace where you don’t have the partnership, or lean in a place where the customers just don’t believe you. That’s taking too much change out of your brand bank. I think being really purposeful with the failure points you want to go after is supercritical.

Edward: Aimee, this has been fantastic. Before you go, can you talk to me a little bit about one of your quake books? A book that’s changed the way you think about the world and how it did that?

Aimee: I guess people know me as the queen of commas. I’m always like, I never have one answer. I have multiple answers with commas.

I am able to see strategic connect dots, and I also like to get stuff done. I always felt like a bit of a circle trying to fit in those square holes. I remember when I was a kid, I read Phantom Tollbooth. I was like, oh, the world is quirky. This is so cool. Wait, this word doesn’t mean that thing and they’re using it in [...].

A part of me, even when I was little, it used to be it’s okay to be who you are because somewhere out there you’re going to find somebody like you. It’s good to have that centering and understanding you so that when you go to that next chapter of your life, you’re walking into a place where you understand yourself and you understand all that stuff. That’s a big concept when I was a little kid. It is still kind of now.

I think the other book—Starbucks, is really big on servant leadership. Because if you walk into a store, the whole store is centered around handing a smile over the handoff plane. In order to do that, you can’t do it the same way to the same person all the time. Your support center—your headquarters—can’t just be thinking about the thing you’re launching. It all has to be in service to something else.

Leadership Principle was a book that we all read. It was 20 years old I think maybe now when we came into the company because it was so important to understand. Being a leader is about leading, listening, empathy, understanding, and service. That really changed my perspective on what a customer experience could be and what a journey is. People are having lives all around you, and you have the privilege to be intersecting with them at some point in time. You should see it as a privilege and understand how you can serve them. That really struck me.

It struck me [...] for business. It’s with my family, with my friends, and with other people. That really changed the way I thought about empathy and leadership.

Edward: Aimee, thank you so much for your time today.

Aimee: Thank you. It’s been a pleasure.