Due to the sheer size of the property and real estate market, it seems that even with the large funding going towards proptech, new verticals and niches are still being explored by startups.
While every day brings news about property management, construction and smart home technology, one segment that hasn’t seen much particular innovation is the advertising and marketing market. While the housing markets continues to boom, advertisers from home builders to moving companies are looking for new ways to attract customers and enact growth.
One such company is Audience Town, a data and advertising platform that helps marketers reach customers at every stage of their home journey. The startup uses data to predict where in the home buying journey consumers are and enables advertisers to target ads to those individuals based on their desired audience.
The company recently raised a $6.1 million seed round earlier this month, and now plans to scale its home journey platform to reach even more brands and customers.
FinLedger spoke with Ed Carey, CEO of Audience Town, about the company’s real estate-focused advertising product, recent seed round and plans moving forward.
Q: First off, could you just describe Audience Town and the services you offer?
A: I’ll start by calling it a data and advertising platform for the real estate and home industries. We are really a vertical software business. We place ourselves at the intersection of AdTech and PropTech, so advertising technology and real estate technology, we are at the intersection of those two things.
The business is really designed around the very long and expensive and complicated home journey for consumers. The consumer home journey is unlike any other purchase that people make in their lives, and it can take upwards of a year before people actually move. It could take as long as 12 months from the time that people experience some kind of life event, to the time when they actually move into a new apartment or house. After they move in, they are typically experiencing a year or sometimes two years of settling in to that house.
We’ve taken our backgrounds in digital media, advertising technology and big data analytics to try to understand all of the life events that people experience, from the very beginning of that journey. Then we try to really understand where along that journey they are, so when they might be moving, and then we help marketers both in real estate and the consumer home industries to target those people with digital ads across every channel and device in the U.S.
Q: What was the real point where you realized this was an underserved market that needed innovation?
A: The business started back in 2018 because many on the team here were sort of interested in starting a company. We were on the lookout for very large industries that had a lot of offline data that wasn’t being used for marketing or advertising so that we could better serve the industry. Then, my wife became a real estate agent and it opened my eyes to how big real estate was as an industry. Indeed, maybe the largest industry in the U.S., with how much data there was in the industry between MLS, mortgage data, lease data and transaction data.
There’s so much data, but it was really sort of offline. It’s still very much an offline industry, that’s sort of going through a digitization now, and it was at least 10 years behind where other industries were in their marketing. They were not really using data to understand consumers or their own customer, as much as other industries like automotive. That’s one thing we noticed right away, so we got into real estate.
I think a lot of proptech companies are people coming from other industries, finding the gaps in real estate, and trying to help accelerate closing the gaps. One thing we started to see was mostly in real estate, there was a lot of like lead buying. That’s kind of the drumbeat, and usually industries or businesses will buy leads when they are not using data to understand their customers. They just have to buy their customers because they don’t really understand their customers. We thought by using some of the more data-driven strategies, techniques and products that other industries were using, we could help this industry slowly wean away from just lead gen [and] towards really more of an understanding of what the consumer is going through, and then delivering them ads and marketing at the right time so you don’t have to buy leads all the time. That’s what we set out to do.
Q: Looking at that data piece, what have you found is the most important data that wasn’t being used but is really important for understanding this audience?
A: The thing about data is, the word is used in so many contexts that it’s almost meaningless, but data can be used for two primary reasons. In advertising, it can kind of tell you who people are, so you can use data to understand income or various demographic profiles, and that’s one way that data is used in advertising. It helps with targeting, just like companies might use data to do better targeting on Facebook or Google.
The other thing that data can help you do is to find people earlier. Think of it as a horizontal timeline, and in our case that’s the home journey. We can use data about life events to understand when people might be experiencing those life events, and that’s the most interesting stuff. For example, people historically moved for five primary reasons. It was because they had some kind of a life event related to a job change. A family change, like a marriage or the addition of a child or a divorce, a health change, or a graduation. Those are really the big ones. You would try to find people having those experiences in their lives, and that’s kind of where we started. Data can actually help you find people experiencing those life events, who may not even realize that they’re probably going to move in the next year or so. We know that the correlation of going on a honeymoon and getting a pet is an over index for moving in the next year. Things like that. Then, what became was that we could start to pick up on signals of people 12 months out or six months out, even before they’re on Zillow.
Everybody’s moved. You’ve moved and I’ve moved. I don’t know when the last time you moved is, but we can all relate to this. You don’t just trip over Zillow on your phone and start looking for houses and move. Something happens in your life that impels you towards a home change, that you don’t even realize is happening at the time. I moved after I started this company, but I didn’t plan on moving. I just had to move, you know? I started the company and then six months later was like, ‘Oh my God, I have to move houses if I’m going to afford to do this.’ Usually something happens like that, and then it becomes and then you become an in-market home buyer, renter or mortgage buyer.
What’s been really interesting is what’s happened since COVID. I gave you the top reasons people used to move, and they still move for those reasons, but there are people moving for a host of new reasons that we’re still at the cusp of trying to understand. Most obviously, work from home policies. That has changed why, how and when people moved, in ways that only data can tell you. There’s a lot of people trying to figure out what’s going on with office work in the future and I think you probably know and we’ve seen the residential housing market is directly tied to the office market. When people are not working in offices, don’t have to or refuse to go back, as in the case of Goldman Sachs this past week, they have more choice than ever about where to live.
That’s what we’re trying to use data to understand. Otherwise, you’re never going to understand. You can’t just read headlines and really understand those migration patterns. American’s data can actually start to throw off signals that tell us where people tend to move, what are some of those migration patterns and we can start to put predictions onto it. Work from home policies are one thing that we’re studying very closely and trying to understand better, so that we can understand the real world and real world use case. Should we be showing ads to people in suburban New Jersey, or where I am right now outside of New York City? Should we be showing this person new development ads for places in Florida, Texas, Utah, or some more popular places that urban populations are moving to?
That’s one, other things are related to climate. Taxes and climate seems to be the two things that also attract new home buyers and renters. There is a move towards warmer, lower tax states right now. If you have the option to do so, because you don’t have to go to an office, you can move there. These are things your publication has pointed out and people know is happening. We’re using data about these consumer patterns in these life events to understand those things so we can serve people ads that are more relevant to them, but also sooner in their journey. That’s really the best use of data. It’s not just who’s moving. Sometimes it’s easy to find out who’s moving, because they’re searching for it or they’re on their portals app or they fill out a form or something. We use data to find out, as early as possible, so that you can start showing somebody ads for Florida condominiums when their New York job no longer requires them to go to an office, for example.
Q: When you think about this whole home buying lifecycle, how does advertising and branding change from the beginning towards when they actually start moving through this process?
A: Our product is built along that home journey. We actually have a self-service portal and user interface that marketers can log into, and when they log in they see this 24-month journey and they can slide the journey to exactly when they want to market to those people. Basically, it’s not so much that the marketing from a single brand changes, it’s more that consumers need many different products and services along that home journey. If our data science signals to us that here is a couple back from their honeymoon, for example, and I should caveat that this is all anonymous data and we don’t broker in people’s [personal data]. It’s all anonymous, and that’s an important topic, but it’s all anonymous web browsing data that we’re using.
12 months before we think they might move, they might need to see a lot of housing ads. So our housing and property advertisers like multifamily companies, new construction builders and real estate brokerages, we might serve them ads first. They’re back from their honeymoon, and they’ve logged on to Zillow. We know that they’re looking at Zillow on their phone, we know that they’re searching for certain things. We know that their income went up. We’ll have all these signals and will start showing them property ads, and then as we sort of think that they’re getting closer to a move, let’s say six months before a home purchase, we’ll start sending them financing ads.
They get financing ads and that’s when the mortgage ads come in. That’s when the proptech clients come in. We have a lot of proptech and fintech clients who are power buyers or provide various lending services, many of which I think your publication covers.
Once they’re going through the financing phase, once they get through that and have an offer accepted or we think they’re moving closer to signing a lease, then we might start serving them various home services and move related products. It starts moving towards, it could be moving companies, but more often it’s home services and connection brands. It could be telecommunication brands, furniture brands, paint brands or retail brands. We’ve seen a huge uptick in retail and home delivery service marketers. It’s all about serving you all that stuff that you need when you move into a new house.
That’s different for buyers and renters. Buyers will need mortgage products. Renters might want furniture, gym equipment is one thing we found. It’s really interesting to also find out the kind of companies that are marketing to home movers. I would describe it that way.
Then there is post move. We’ve had clients who want to know people that moved a year ago, because that’s typically when your finances are refreshed. You have a little bit more money to actually do the home improvement project. Believe it or not, we have financial brands and mortgage brands who want to know the people who moved two years ago, so that they can refinance. We have a very large database of people predicted to move, are known to be moving or have moved in the past. We have a few dozen different industries marketing to that same person moving, so it’s really kind of fascinating. All the way from property to financial service products, retail, home improvement and just about everything in between you can imagine. It’s actually pretty amazing.
Q: Just to double tap on that, what would you say is the breakdown as far as clients go, and what industries have you seen the most growth from?
A: When we launched the business, it was exclusively for property or real estate marketers. The original design of the business was a very easy, data-driven, affordable, advertising platform for multifamily companies, brokerages, mortgage companies and home builders. Those types of clients, by the way, are about a $30 billion advertising category. Those real estate marketing types are really big in and of themselves. Most of that money, call it $30 billion but it’s probably more by now, most of that money pours into the big names: Zillow, CoStar, Realtor, Facebook, Google and then offline stuff. Balloon marketing we call it: balloons, signs, emails, all that kind of traditional stuff.
That’s been that industry. When we launched, the original intent of the business was to be an alternative to those three typical channels: social, search and portals. That was all the industry was doing. They were not doing all of the new stuff across television, audio and all the new digital formats that are available.
That was what we thought, then that was when COVID hit, and everybody freaked out. That’s almost two years ago today, right? We’re kind of around that time. Two years ago, I left my office thinking I’d be back in a week and literally never went back. Consumers start being like, ‘I need to get out of my city. I need to get a bigger house.’ Through those two years, the demand for housing of course surged to where we are now. That hasn’t led up, if anything it’s gained steam. What that meant for us was we recognized that a lot of our core clients didn’t need marketing as much because they were selling or renting everything that they had within hours. That created an obvious moment for us.
We actually had a pretty good 2020 because so many people, immediately after COVID hit, started moving and so a lot of our core clients were marketing properties to them. Come move here, come live here. People were abandoning their cities. They were going to the suburbs and they were going to the Sun Belt, so we had a pretty good 2020 in terms of client uptake.
By 2021, a lot of our clients started saying, ‘Hey, look. Our clients, the real estate companies, they have a shortage of supply so we’re going to slow down marketing and advertising until we have more to deliver.’ That accelerated us towards some of the mortgage companies that were trying to get those people to finance or refinance. A lot of the proptech companies stepped up in 2021 because they were getting huge amounts of funding. A lot of these proptech companies are B2C proptech companies, so they’re trying to educate consumers on how to make the transaction simpler, more affordable, how to access equity in your home, how to buy a house with cash that you don’t have. All of those cool new fintech and consumer services. They’re awesome services, and they’re heavily funded, but a lot of consumers just don’t know what they are and how they work. We saw a big uptick in proptech clients for their advertising to consumers.
We also saw a lot of consumer brands try to capitalize on the new home migration patterns. We started to diversify our client list to where I think over the course of COVID, we went from majority real estate clients to majority finance, consumer brand clients and proptech clients.
I would say now real estate, or multifamily brokerage builders, they’re now in the minority for us. I do think that will balance out over the next five years, and I’m not trying to put a forecast on it, but I think there’s always going to be a need to market property. To get people early and to try to convince people to move to your region. We’ve also seen a big uptick and all kinds of other services trying to capture the attention of that whole mover, who needs so many new things around a move.
Q: Let’s talk about your recent $6.1 million seed round. What was that process like?
A: This was actually our third round of financing and it was from our two existing investors. Our lead investor is a company called Wasatch Equity Partners out of Salt Lake City, Utah, and it’s a great company. Like a lot of big real estate companies, which is what they are, they have a venture unit and do private equity investing. We’re seeing that with a lot of these proptech funds like Fifth Wall. We also have a relationship over at Modern Ventures, which is a proptech VC. There’s a lot of real estate companies that own, manage or build real estate. They’ve been so profitable over the years, they’ve grown so much and now they’re looking to get into technology and proptech investments directly. That’s what Wasatch Equity Partners is like, and they learned about us in 2020 during COVID.
We had contacted them to be a customer of ours because they were marketing a lot of their properties out west. They have about 16,000 multifamily units all across the west. We contacted them to be a marketing client and they said, ‘Hey, this is really interesting. We’ve been thinking a lot strategically about how digital marketing for real estate has got to change. It’s got to be better than what we see in the big, unified platforms and doesn’t seem to be adequate or good enough. Maybe we could invest in your company and accelerate digital marketing for the industry.’ That’s how we met them. They came in 2020 and then again here. Our other investor is an app marketing technology investor. They’re now called Aperiam Ventures (previously MathCapital) and they’re probably the leading marketing and AdTech early-stage investor out of New York City.
Those two came back in so we’re really thrilled. We’ve had great growth. I think because real estate and home moving is such a part of the national conversation now. Everybody’s talking about it and everybody is thinking about doing it. There’s been so much disruption and also turmoil from the big disruptors themselves. Zillow’s iBuying got a lot of press, and so now the disruptors are being disrupted. Everybody’s being disrupted, so much is changing around it, that it’s been fascinating. Everybody in their own lives is wondering whether they have to work in the future, and if maybe a move is in their forecasts. I think our investors saw that growth and saw the team, and realized that there’s a big future regardless of what goes on in the housing or the credit markets.
Q: What would you say is your biggest goal that you’d like to hit this year, and beyond?
A: We’re in our fourth year now, and this year we have three big things we want to get done. First off, we want to really accelerate our engineering and marketing. We have new marketing and engineering leadership because of the round. We also rebranded the company and the website, you might see, is an entirely new one. It’s a more updated and accessible version of what we think the home journey can be for real estate and home marketers. It’s to really accelerate our data architecture, which is a nice buzzword. Remember how I talked about that offline real estate data and how it’s all just kind of floating out there in other people’s systems? We have to onboard a lot of that data to our system, or our cloud to be specific, and structure it along that 24-month home journey.
We license, buy and acquire all kinds of datasets and then put them together and create an ID graph, which is somewhat of a marketing technology jargon term. It means that we try to understand how many people are at every stage and every moment of that home journey, including people we want to predict or we think are predicted to move. Right now for example, we’ve identified about 16 million people that we think are predicted to move in the next six months. That’s data architecture, that’s moving data and structuring it, labeling it, putting it into our cloud, and then matching it to the web for advertising targeting.
That’s like data architecture, and then it is our automation. We have a whole front-end self-service that marketers can log into for planning, buying ads, creative data targeting, billing and analytics. All in one system, so it’s a really simple, easy to use, data advertising and analytics system. Our clients on the real estate side typically will log into it, just like they would log in to Google or Facebook to manage their ads, and get analytics. It’s kind of an addition to that system, and it gives our clients a way to diversify and extend the reach of their marketing messages outside of just Google and Facebook. That’s the big push, to have that all done by the end of the year. We’ve got new marketing and then next year is 2023. It’s all about scale and automating so that we can bring this platform to every real estate and home service marketer in the country. There’s really a limitless number of them.
Q: What would you say are the biggest challenges when it comes to all this?
A: The hardest thing that we confronted was really just the housing shortage. How do we navigate that, but I think we got through that storm pretty well, if anything we’re stronger for it. It’s identifying, onboarding and structuring that data, and then pushing it to the web for ad targeting that actually performs. By perform I mean deliver a superior marketing ROI to our clients. That’s really hard to do. You know, it’s a complex process. It can be expensive on the front-end, so part of the fundraising was to actually have some of the capital available to have commercial partnerships with data providers. Very large real estate tech platforms that have a lot of this derivative data, it’s then working with them to, be able to actually access or acquire some of that data in a compliant way. And then turn that into packages on the home journey for advertising targeting. Once you do all that, then it has to work. That’s the hard part. You can build all this stuff, but if you have an advertiser who runs television ads with you, and mobile ads and social ads, but they don’t get the ROI after they work with you, then there’s something wrong in your processor system. Getting that right is really complex and challenging, and there’s also a lot of capital required to do it because you’re talking about ingesting and mapping a lot of data. That’s really at the core of the business. It’s what makes the business strategic and different, and because we’re doing it for buyers and renters, it makes it doubly as complex.
Q: What would you say is the biggest difference when it comes to buyers and renters? What would you say is the most interesting aspect when you look at the two side by side?
A: I think coming into the industry, it was very difficult to get our heads around how many people are actually doing what, because there’s so many different data and sources in regards to home buying and renting. But basically what we have active in our database today is there’s about 330 million people and about 120 million national universal residential addresses in the U.S. So we kind of start with that and try to understand the movements of those 120 million, and about 44 million of them are renters. That means 76 million of those are owners, so about two-thirds ownership in the United States.
And then for people renting their home the journey is only a couple of months or weeks. You know the majority of people renting are single occupant, while the majority of people owning their homes are multiple occupants. That’s a big difference. You’re talking about people with very different profiles, oftentimes different demographics in terms of age as well, and then the journey is just really short. When you’re renting you typically know your lease is coming up within 90 days, and you either work with your existing landlord or you’re like scrambling to find a new place very quickly. Your journey is just kind of fast and stressed. That’s the biggest difference more than anything, so they’re very different profiles overall. For us, everything we do has got to be for renters and buyers, and then buying breaks down by existing and new homes, which is also like a very different split.
We have to try to understand all of these, that’s the hardest part. Once they do transact a lease or sign a deed and they move, they need different things. Home buyers need everything. Cars, furniture, paint gym equipment, security systems, lawn equipment, it just goes on and on forever. Renters do need things, not as many things, but they do need things. They do look at things like I mentioned, like furniture, carpeting, paint and decor, but they’ll also oftentimes buy appliances. They’ll get like bigger televisions and stuff like that, so that’s really the split for us. It means every time we find or we get a signal on a mover, we first have to decide if is this a buyer or if it is a renter, and then it’s a very different journey. It’s a very different set of products and financial services that they need.
In other recent proptech news, SmartRent acquired maintenance service platform SightPlan for $135 million. Tishman Speyer also locked in $100 million for its debut proptech fund.