WASHINGTON, DC—Effective this past weekend, CoStar Group's database has been integrated with that of Its listing service, LoopNet. Although LoopNet has been under CoStar ownership since 2012, they've maintained two “separate and distinct databases” since then, CoStar's Rob Cain tells GlobeSt.com.
In part, that was due to the fact that “CoStar and LoopNet actually speak to very distinct audiences,” says Cain, VP of product management with CoStar. “At its heart, LoopNet is a marketing platform that is primarily intended to reach an audience of end users including smaller investors, and real estate professionals will market their listings to that audience through LoopNet.” By contrast, CoStar's subscriber base is comprised “almost entirely of commercial real estate professionals: brokers, appraisers, larger owner/investors, lenders, etc., who want higher-quality verified research data.”
With effectively two separate platforms going at once, “There was a fair amount of redundancy in terms of how customers were communicating to us about those properties,” Cain says. “As the years went on following the merger, we also recognized that we were missing some tremendous opportunities to bring higher quality and more timely data to our information customers, people subscribing to CoStar.
“We also realized that LoopNet was trying to perform two jobs: one that it was doing very, very well and, candidly, one that it wasn't doing well,” he adds. “That was to try to be an information platform for a small subset of real estate professionals that may have been using LoopNet as an information tool for a number of years but didn't necessarily realize that they were only seeing a small part of the whole picture.”
Online marketplaces for property sales, “whether residential properties in England or commercial properties in Australia, are extremely effective,” offers CEO Andrew Florance. “I think people would say the single most effective way to market properties is on the Internet now, and I believe LoopNet has been handicapped by having the legacy information tool focus that it has had.”
LoopNet's early focus, Florance says, was on “trying to be an information provider. Probably 80% of the software development went into building information tools, which actually reduced its effectiveness as a marketing platform. It was hobbled by a whole series of complex layers of information tools.”
Eighteen months ago, the CoStar team embarked on an integration program to provide one database driving all of its platforms. “What the integration entails is first of all, the consolidation of the two databases, so all of the listing content that was in LoopNet will be consolidated into CoStar,” says Cain. CoStar's database will now be the single repository that will not only drive the CoStar information products, which have about 100,000 subscribers, but will also directly drive the marketing platforms LoopNet, Showcase and City Feet.
“The outcome of that is going to be a significant improvement in the data: more timely information, and giving people listing with us a higher degree of control over how their properties are marketed on both platforms,” he adds. Among other changes, that means what formerly entailed a two-step process for brokers uploading and editing data—and included verification by CoStar researchers—can now be managed through a single portal.
“One of the things we look forward to is being able to focus LoopNet on what it does best and what it's clearly the most popular for with brokers,” Florance tells GlobeSt.com. “What the brokers and owners love most is its ability to market their properties and brand their properties across five million people per month. Only 0. 1% of the people coming to LoopNet use it as a traditional professional information tool. The other 99.9% are small investors and end users looking to buy or shop for real estate. So we can't wait to evolve and improve LoopNet around its strength, which is as a marketplace for properties.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
