What is the Best ILS for Multifamily Marketers?

One year ago, the landscape of internet listing services (ILS) changed in a major way with the Zillow acquisition of Rent.com's traffic. This consolidation solidified the duopoly in multifamily apartment listings. Because my website starting showing up on Google for 'what is the best ILS for multifamily marketers,' I thought I'd address the question in hopes we move to the top of Google and AI searches (full transparency here)!

The Scene

In my course on multifamily marketing, I go over the framework I use to evaluate each ILS and how to determine where each pricing model and provider fits into your strategy. Let's start with a basic exercise.

Start by Googling 'Apartments in X' (X can be your city). I'm going to choose Pittsburgh, as it's where my wife is from and somewhere I've never searched before.

Here is the list of organic search results.

1. Google Business

2. Apartments.com

3. Zillow

4. Property Website

5. Trulia

6. Realtor.com

7. Property Website

8. Property Website

9. Property Website

Surprisingly, these results are pretty different from the last time I did this exercise. If we remove the non-ILS, we're stuck with Apartments.com, Zillow, Trulia and Realtor.com.

I was on a call with an ownership group and they were asking me about a bunch of different ILS' and if we were on them. They were shocked when I told them that they're all the same - basically.

Zillow owns or partners with Trulia and Realtor.com

Apartments.com is the only other ILS on the list.

As I stated in the first paragraph, us multifamily marketers are essentially reduced to working with one or both of the top players in the industry. Both Apartments.com and Zillow listings syndicate to their other sister sites such as Homes.com (Apartments.com) and HotPads (Zillow).

Essentially, if you're on both ILS', you're soaking up 80% of the traffic going to the ILS'. The other 20% is the Zumper or ApartmentLists of the world that don't rank as high organically or don't have as strong of brand names. Doesn't mean you shouldn't use them, but something you should realize (though ILS strength varies by market so this exercise is a helpful way to gauge what ILS does the best in your area).

So the real question you want to ask is -

Is Apartments.com or Zillow the best ILS for Multifamily Marketers?

This is the real question we must ask. Again, not discounting the others but the data I have shows Apartments.com and Zillow has about 100x the traffic of the second-tier ILS.

Before I answer this question, we first have to understand the two models at play; Pay-Per-Lease and Monthly Subscription. Let's explore.

Summary of Pay-Per-Lease

Pay-per-lease is exactly how it sounds; you only pay when a lease is signed. In that way, there is an almost-guaranteed ROI (if someone breaks their lease after only a few months then that of course negates the value/ROI). For example, let's say you rent out a 1-bedroom apartment at $1,000/month. Over 12 months, that's $12,000 in revenue and you paid $500 to a pay-per-lease provider (ApartmentList, Zillow, RentCafe ILS). Your ROI is 24x. That's pretty good.

From my perspective, the numbers actually work more in your favor than that. Let's assume that your renewal rate is 50%. All of a sudden, you can assume 1.5x on that revenue and your modeling looks like $18,000 in revenue for only $500 or a 36x ROI.

Now let's go even further as pay-per-lease normally only charges you if the ILS is the first touch-point. And they're not the first touch-point 33% of the time. That means they still play a pivotal role in the journey of prospects, even when you're not paying for it. All of a sudden your ROI is 40x+ in certain scenarios.

As you can see, I'm generally a fan of pay-per-lease.

Summary of Monthly Subscription for ILS

This is also pretty straight-forward. Just as any consumer product like Spotify or Netflix, you don't pay for usage or performance. You pay rain or shine, regardless of performance, usage or need.

Still, there are benefits including you are capped at what you spend per month. If your Apartments.com contract is $1,000/month, that's what you're spending - no more or no less. That is definitely helpful when it comes to budgeting.

Because it's not paid on usage or performance, there's no blanket way to say subscription is good or bad. It simply depends on the numbers. Here's a few metrics to examine to understand the value.

1. Impressions

2. Detail Page Views

3. # Leads

4. Cost Per Lead

5. # Shows

6. Cost Per Show

7. Attributed Leases

Essentially, you must look at every area of the funnel to understand whether your monthly subscription is worth it.

In the first couple of months on the job, our attribution was all messed up so I only had top-of-funnel metrics (essentially 1-4). Because it was hard to evaluate whether the lead were good or not, I manually went through as many guest cards as I could to see the communication and the level at which they were converting. Quickly it became clear to me that this ILS was counting on management companies to believe their number of leads generated and brand name without considering actual performance and even reach compared to its competitors.

When is a Monthly Subscription Better than Pay-Per-Lease?

In some cases, we have properties on both a monthly subscription and pay-per-lease, depending on size of the property, competition, and type of property.

While I prefer pay-per-lease, there are some cases in which a monthly subscription is better.

Take Johnson Park Apartments (fake name). We've had a contract for a long time for this property and it's only $544 a month on a gold package. This property almost never slips in occupancy and in a breakdown of our Apartments.com advertising, they are in the top 5% of performance in our entire portfolio. By keeping it on Apartments.com, I essentially guarantee that we never go above a certain amount of spend while knowing performance is good on that ad channel. I also don't have to supplement it with Google Ads or Meta, making the monthly subscription our best option.

Conclusion

As a whole, Apartments.com has the greatest reach of all the ILS, including Zillow (at least in our market). But also, the cost is higher than they trap you into 6 or 12-month contracts.

The best ILS is the one that maximizes your occupancy, minimizes your costs. That would mean assessing the value of each one and if you have historicals, that can help you determine whether you need both Apartments.com and Zillow, just one, or none.

If you want to fully dive into the numbers and framework I use to evaluate performance of the ILS, I recommend checking out my Multifamily Marketing Course that gives you everything you need to maximize performance at a property-level and across your portfolio.