Katy Couric, Redfin, and the Predictability of Markets.

by Jeff Kempe

Realtor, Associate Broker

Author website

There was a delightfully obtuse article in yesterday’s Oregonian lamenting the abysmal ratings of Katy Couric and CBS Evening News. The writer’s reasoning was that it’s our fault for not watching, that we’re a country of misogynists not ready for a serious female anchor. Damn us.

The fact is that, like most markets, the ratings were entirely predictable. Not that prediction is easy — obviously some people can’t even predict in hindsight — but those who are best able to infer behavior from given cause are those most likely to succeed in whatever they do.

Some suggestions:

1. Trust your first impression.

It’s the first advice I give to buyers: You’ll know it when you see it; if you have to be talked into it it’s probably not right. Same with ideas: if it sounds nutty on first hearing, chances are it is.

When a network news division with serious credibility problems hires as an anchor someone famous for her teeth and entertainment value — and with credibility problems of her own — it’s nutty.

When a company — Redfin — launches on the supposition that buyers will rush to be represented by someone they’ll never meet in their most important purchase of their lives, it’s nutty.

2. The corollary to (1): Don’t project your own bias.

Manifested in the notion that “If I think it, so must everyone.”

The Oregonian is obsessed with global warming (full disclosure: I am not obsessed with global warming). When our local MLS decided to add a ‘green’ search mechanism, apparently intended to pick up those properties with Energy Star or other ratings, The Oregonian devoted sixty column inches to the news. (See here). I still haven’t ever had a buyer ask me to find a green property, a seller who’s asked how to get a ‘green’ rating, nor have I ever talked to anyone else who has, and I live in the greenest state in the US. As of right now, there are 304 green listings in the MLS; out of 12,741.

Redfin’s (and Sixty Minutes’) bias is “Stick it to the Man!” CBS’s bias is: gender trumps merit.

Caveat: It’s easy to find bias in others; very difficult to filter our own.

3. What people say and what they do are often diametrically opposed.

Advertising Age did a survey many years ago, back when the ozone layer was the pet anxiety. The percentage of people who said they’d absolutely quit using aerosols was only exceeded by the percentage of people who still were using them six months later, when AA actually went to the homes of the participants.

Focus groups have cost more companies more billions than any other single human calculus. Moderators weigh questions to get the right answers, even when they don’t know it; and people are always eager to say what they think others want to hear.

I promise Glenn Kelman has focus group results in his VC presentation, just as I promise CBS had plenty of focus groups that convinced the network geniuses that Couric was a guaranteed hit.

4. Nothing kills a bad product faster than good advertising.

After the huge capital spent on the roll out, CBS had millions tune in who then immediately tuned out.

And I promise: Sixty Minutes did Redfin no favors.

5. Know history.

Human behavior doesn’t change easily. Green marketing has never worked unless there’s a price saving component, but companies (and MLSs) keep trying. And failing.

If Phil Knight’s axiom is true (and it is): “Yes, Nike’s a marketing company, but our product is our number one marketing tool…”, then Redfin’s in serious trouble. It doesn’t have a product.

And CBS has no discernible idea how badly it was hurt by Dan Rather; if they don’t figure that out, they’ll keep tilting at windmills.

Final note: this is intended to lay a foundation for a later post, where I’ll make the case that splitting buyer and listing commissions is unequivocally the best thing that could happen to the real estate industry.

[En garde!]