Content to Commerce but With Real Estate

By Jacob Cohen Donnelly February 9, 2024

There’s a lot of discussion about the future of local media. Monetization has become increasingly difficult with consumers reluctant to subscribe, while at the same time advertising dollars are not what they once were. Ultimately, we’re dealing with a disconnect between the two goals of a local newspaper.

On one hand, there’s a belief—which I agree with—that the job of local news is to hold power to account. Light sanitizes, so bringing clarity to what’s happening is a good way to prevent bad things from happening. If someone thinks they can get away with something, they’re likelier to do it.

On the other hand, we want people to pay for reporters to do this work. But because people like to pay for tangible things, it’s hard to make a connection between holding power to account and that meaning something to the individual.

It used to work because there was other content in the newspaper that people were willing to pay for: sports, lifestyle, games, etc. And so, someone would get other things they were interested in, while still being exposed to the local news reporting. This is why the New York Times has games, recipes, and sports alongside its news-gathering operation.

But with the internet making it significantly easier to get all these other types of content in other places, the user isn’t stuck just subscribing to local news. And that means the bottom has fallen out. As local news has lost its monopoly on users’ attention -, it has lost its ability to monetize properly (to say nothing of its inability to innovate on new ad products). This means local news needs to develop a new way of making money.

I’ve long believed that one monetization approach could be a content-to-commerce strategy. What do people about the most in their local community? It’s a thing that they spend hundreds of thousands of dollars on.

We’re talking real estate.

And I believe that local news is uniquely qualified to generate revenue from real estate transactions. Here’s why:

In most transactions, the buyer and seller hire an agent to represent them respectively. Typically, these agents only make money when they close a deal. I have a friend who does real estate and will sometimes show people 10 different properties and still not make any money because they decide not to buy. It’s a pure commission play.

Let’s do some math. Imagine a home sells for $600,000. Typically, commissions are anywhere from 4% to 6% of the total purchase price, which is split between the buyer’s and seller’s agents. And so, on a $600,000 purchase with a 5% commission, you’re looking at a fee of $30,000. That’s split 50/50, and both parties walk away with $15,000.

What if the local news publication was one of those agents? We’ll call it Local News Realty. Each time a home is sold, that pub would get $15,000, assuming an average home price of $600,000. If you sell one house a month, you’ll generate $180,000 in revenue annually. I’m being intentionally flippant about the complexity of real estate, but let’s keep progressing with this thought experiment.

There are two things you’d want to accomplish if you did this. First, you need to show sellers that there’s value in choosing Local News Realty as their listing agent. Second, you want to drive prospective buyers down the funnel so that they select Local News Realty as their buying agent. That way, you can get both the buying and selling commission. Let’s walk through these two steps in detail.

Custom content for real estate

A local news publication brings several things to the table that a standard real estate agent can’t. The first is a built-in audience of people who live and care about that specific community. The second is the know-how to create good content. And so, you should use that to your advantage.

The plan would be to create a new real estate ad product for the seller’s side of things that has two components:

  1. A piece of in-depth sponsored content about the house, which would run on the publisher’s website and distributed via email and social media
  2. Distribution through all the standard MLS and aggregator platforms

Real estate agents can only do the second thing. By doing that but also bringing in the custom content on the publisher’s website for the same 3% seller’s fee, you have a competitive advantage. The seller knows you have an audience, so that will increase the velocity of potential bids.

Building a buyer funnel

Like I said above, you’ve already got the buyers reading you. That’s why the sellers are willing to choose Local News Realty to be their agent. But if you can execute smart marketing automation, you can also represent those buyers and get their cut of the commission as well.

The first step is to introduce an in-depth real estate section on the local news site. This means you want every potential listing in your community to appear. This isn’t as hard as it sounds. For example, if you’re running WordPress as your CMS, IDX plugins can give you all the listings in a structured format. See here as an example.

Once you’ve got all that real estate listed, you’ll want to create a newsletter that prospective buyers can sign up for. You want to capture information about what they’re looking for during the signup stage. If they’re active buyers, they’ll know they need four bedrooms and three bathrooms, for example, so they’ll tell you that. You can then promote listings to them that fit their criteria. This is using 1st-party data to inform your email strategy. [And here’s the small trick: You’d put every property that Local News Realty is selling above the full MLS of listings at the top of those newsletters to increase the velocity of bids on properties you represent.]

Every step of the way, you’re tracking their engagement (this requires a customer data platform). And so, if you see a user clicking on every new property that comes on the market, you know they’re a potentially hot lead. You can then have an agent on the team contact them and let them know you’d be happy to represent them.

It has complications

The above scenario is not all sunshine and rainbows, of course.

First and foremost, the publication would likely need to get a brokerage license, and all sorts of classes and certifications are required for this to happen. Each state has different rules, so you’d need to determine what laws apply to you.

Second, if you’re hiring agents, your commissions suddenly decrease because you need to share with them. So, if you get 2.5% as the selling broker but have an agent doing the work, you’d split that commission 50/50. What was once $15,000 becomes $7,500 in your pocket.

Third, there’s an inherent conflict of interest if you’re both the buyer and seller’s agent. The buyer wants to pay the least amount of money while the seller wants the most amount of money. But since the seller pays the commission, you still want the best possible price even if you’re representing the buyer.

Still, this is a different way to monetize local journalism. By getting chunky checks when deals close, you can use those resources to invest in the reporting that improves a community. You can still run ads and try to sell subscriptions. However, this content-to-commerce real estate strategy unlocks a new revenue stream that puts you much closer to the actual transaction. It could be part of the solution.


Let me know what you think. Either hit reply or join the AMO Slack to discuss this further. I hope you have a great weekend, and see you next week.