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Active Rain Says TANSTAAFL To Founding Members’ Uproar

The Active Rain Real Estate Network is charging a fee.  I’m not surprised.  The network has been trying to find ways to monetize its business since inception.  It tried a referral network and advertising and now it’s faced with the hard decision of pay-for-play.

Lani, at Agent Genius reported that one founding member deleted all of his content in protest:

This week, Active Rain inadvertently makes for heated conversation again by going back on their promise to founding members (the first users of the service) that they would never have to pay to participate because they evangelized for free and promoted the service making it what it is today.

Real estate blogger Jay Thompson, one of Active Rain’s original users and long time advocate of the brand noticed along with many other bloggers today that despite ActiveRain’s promise to grandfather in “founding members,” he was asked to pay an annual fee before he would be allowed to continue participating.

ActiveRain allegedly fudged notifying founding members and moved forward by only allowing active members to be grandfathered in. Thompson’s argument is not only one that he and others did not receive proper notification, but he and others comment frequently and despite being on a points based system tied to each user’s account, it is not considered to be “participation.”

Thompson’s response? He deleted all of the content he had ever written and I suspect he and others will no longer refer to ActiveRain in their frequent seminars, courses and speaking engagements.

I don’t know if I would have chosen to delete my content there.  Like any advertising model, it might have been useful to really analyze the costs and benefits.  I can think of three benefits to paying for membership in the network:

  • Back links to my home site- I can’t quantify what that benefit is but I know it helps my SEO
  • Traffic- I get some 200 visitors monthly from Active Rain URLs
  • Conversion- I receive 1-2 GOOD inquiries monthly, directly from the Active Rain contact forms.

This isn’t too hard to quantify.  The traffic alone is worth $200/year based on a price of only a dime per click.  The 15-20 good inquiries turn into 3-5 loans annually; that’s at least $10,000 in annual income to me.  I like to receive a 5-1 return on my advertising dollar so let’s say that’s worth $2,000 to me.    That’s more than the $29/month it costs to have an Active Rain account.

I don’t understand why everyone praises the value of “free” if free ain’t producing results.  Moreover, if you can trade $350, for $3500, isn’t that a good investment?

Related posts:
  • Active Rain- Happy First Birthday
  • ActiveRain.com: Members Own Content But Can’t Profit From It
  • Active Rain Unleashes Impression Advertising

  • 29 comments

    29 Comments so far

    1. Eleanor Thorne July 9th, 2010 3:27 pm

      Brian – I agree… “I don’t understand why everyone praises the value of ‘free’ if free ain’t producing results.”

    2. Eric Bramlett July 9th, 2010 3:27 pm

      I’m fine with the new business model as long as the original content I’ve provided remains intact (which it sounds like it will.) You won’t see me shell out $29/month for ActiveRain (I no longer see SEO value there,) but if the original agreement we had (free content for free exposure) isn’t retroactively modified, the new offer is simply that. Free advice to AR, though….their site will die a quick death under this model.

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    4. Greg Swann July 9th, 2010 4:01 pm

      I’ve been waiting all along for Active Rain to dry up, but I’m commenting to clue your readers into the meaning of the word TANSTAAFL. The coinage comes from The Moon is a Harsh Mistress, Robert A. Heinlein’s libertarian masterpiece, a retelling of the American Revolution set on the moon.

      So what does TANSTAAFL mean? There Ain’t No Such Thing As A Free Lunch.

    5. Brian Brady July 9th, 2010 4:06 pm

      Thanks, Greg

    6. Teri Lussier July 9th, 2010 5:58 pm

      >I don’t know if I would have chosen to delete my content there. Like any advertising model, it might have been useful to really analyze the costs and benefits.

      When it was free the cost was too high and the benefits too low. Competing against myself was what I was doing, while adding content to my competition. That’s hardly worth the price.

      > I can think of three benefits to paying for membership in the network:

      I’ve always thought that AR must be a little slice of heaven for vendors and lenders. Agents need to carefully consider the ROI.

    7. Kaiholo Hale July 9th, 2010 8:25 pm

      I’m siding with Jay on this one. It’d cost AR an insignificant amount to maintain the status of those grandfathered. Would I have deleted old content? Sure. How much traffic could you reasonably expect from blog posts that are a couple of years old. On his post Jay mentioned that he had received 64 visitors through AR in the past 6 months. If I was in his position, I’d much prefer for people to find me through my own blog rather than AR.

    8. Toby Boyce July 9th, 2010 9:24 pm

      Brian – I did the same thing as Jay and I don’t have one regret. The SEO value for me was negligible. I never found the quality of leads to be worth enough to continue my involvement when it was free. So if it isn’t worth it when the only cost is my time, then I surely am not going to do it when the price is $30/month.

      I miss the “old” days when the network was small enough that the cream rose to the top and a young agent (like I was at the time) could learn something from the people on the site – like you.

      It was great when we had a chance to talk about options and mortgages a few years back.

    9. Jesse D. Moore July 9th, 2010 9:31 pm

      Is anyone surprised by this? I get tired of them talking about their “Google juice” as if they own the corner on the market. Agents are better served doing the same on their own site and owning their content, driving traffic to THEIR site. Farewell AR. I look forward to seeing you in your new incarnation: a dating site for real estate agents.

    10. Joe July 9th, 2010 10:28 pm

      For what it is worth, ActiveRain’s domain authority is quite high when using SEOmoz’s metrics. In fact, the domain authority of AR is the highest I’ve seen of a real estate platform. The individual user’s page authority is also high, usually higher than most Realtor’s websites. I totally disagree with the way AR went about this, especially the part about not notifying folks, but I wouldn’t abandon the platform. I certainly wouldn’t delete content.

      The way ActiveRain makes decisions is very peculiar. I remember studying this type of thing in business management classes while in college,- the individual thinking does not equal the group decision making. Individually, for the most part the folks making the decision at AR are very sharp, helpful, and great decision makers. At least towards me, they have been very helpful and kind. However, collectively, the decision making kinda sucks over there.

    11. Jay Thompson July 9th, 2010 10:35 pm

      Brian –

      I’ve gotten tons of contact forms completed from AR. Without exception, they are from vendors trying to sell me something. Total contacts from real estate buyers and sellers = zero in four years on AR.

      In all fairness, I’ve never attempted to use AR to reach consumers, nor to drive traffic to my site. And I posted two articles there in the last two years. I don’t expect it to do anything for me.

      Could I have utilized it better? Probably. Do I need to? No.

      If I were a lender, a title person, an inspector, I’d be all over AR. You’ve got a captive audience made up mostly of real estate agents.

      For me, the ROI was non-existent. (Though clearly I did nothing to optimize it.)

      Back in Feb 2009 when AR first went to a pay model, “founding members”, of which I was one, were “grandfathered” on premium accounts. (“Rainmaker” accounts in the AR vernacular.)

      At that time, AR founder Jonathan Washburn went on record and said, “Founding members have a free membership for life!”

      Seventeen months later, that promise was broken.

      It’s AR’s site, and they are free to make the rules, change the rules and break promises.

      And I am free to take my content.

      The first half of this year, AR sent me 64 visitors. Google, back links, and direct traffic amounted to 415,089 visitors. I’ll live with 0.01% less traffic. I’ve got 50 – 80K (depending on whose numbers you believe) back links to my site, paying for a few more from AR seems a complete waste of money.

      AR sent a clear message that all they valued was me posting there. I’m not going to waste my time doing that. Since they apparently don’t value my past contributions, why not remove them?

      I enjoyed the early days of AR. I met a lot of people I now consider good friends. From an industry networking perspective, it was a great site. I’m sure one could “work it” and still get that benefit.

      But as a blogging platform? I don’t see it. They tout boatloads of “Google juice” yet I *rarely* see AR posts come up in searches I do for research. TPREG enjoys some pretty healthy Google juice itself.

      I’ve said for a long time that agents need to own and control their content. Adding to a site like AR (or realtor.com, Trulia, Zillow or any other “public” blogging platform) is a risky proposition. Rules can change overnight. Platform suppliers can go under, or be bought. No one but me controls my domain. No one can change my rules on a whim. (Except my wife, but I’ll keep her anyway.)

      My name on this comment links to my post that explains more why I deleted my AR posts, if anyone is interested.

    12. Sean Purcell July 10th, 2010 9:00 am

      Teri nailed it…

    13. Marc Knight July 10th, 2010 9:45 am

      Why should I pay? AR is a great platform, no question about it. However, when you consider all of the free blogging platforms out there – whether as great or not as the ability of AR to produce search engine rankings, there’s actually no reason to stay with AR. I’ve read Jay Thompson’s post and he explained clearly why he ultimately decided to delete all his posts in AR. It’s his prerogative, it’s his content so he can do whatever he wants with it. The bottom line is that the issue is about a little show of respect and gratitude. Apparently grandfathered accounts that didn’t have a post in the last 90 days would be discarded. This means if you haven’t been active in the community, AR would have downgraded your account. Sadly for Jay he hasn’t written a post for quite some time but he actively participated by posting comments which I believe should have been given credit – especially for someone who’s among the original users and long time advocate of the brand. As for the AR staff, they are extremely short-sighted if they believe the only way to contribute to the community is to post articles.

    14. Brian Brady July 10th, 2010 11:32 am

      “Why should I pay?”

      If the numbers work, why wouldn’t you?

      What I didn’t factor into the equation was the opportunity cost of my content development- maybe I have 700-1000 hours invested, over the course of four years. That’s worth…I don’t know…$50,000?…100,000?

      At this point, that content investment is time(and money)spent. If that investment produces $10,000, why wouldn’t I protect it for $350/year?

      This isn’t about Jay; it’s about analyzing your marketing efforts. Jay explained that he DID the numbers and made his decision based on that analysis. I accept that at face value. Likewise, I’ve done my numbers and Active Rain is worth the $29/month.

      Whether the Active Rain owners “lied” is immaterial. Economic conditions change and fees go up or down. Pointing out “cheaper” platforms is immaterial, too. Many of us have invested hundreds of hours into Active Rain and we’re at a critical juncture here. It’s either worth the money or it isn’t.

      I think this is a major problem in our industries. Too many people let emotions or personal preferences dictate how they spend their marketing dollars and efforts.

    15. Brian Brady July 10th, 2010 11:53 am

      “How much traffic could you reasonably expect from blog posts that are a couple of years old.”

      My older posts are some of my best producers. I wrote one about short sales and PMI, some 3.5 years ago, that consistently brings in inquiries. It was meant for informational purposes and attracted a lot of inquiries with no real immediate value to me. Two years ago, I had to figure out how I could make these inquiries pay off. I built a list of people, who sold their home via short sale, and want to buy when they can qualify. I’m about 5-7 months away from reaping the benefits from that list.

      Greg Swann commented to me one time that old posts can be cleaned up, updated, and polished. I took that to heart this year. If you can identify which older posts create the most inquiries, you can polish them up, build new back links for the search terms, and make that URL productive for a few more years.

    16. Greg Swann July 10th, 2010 12:20 pm

      > Greg Swann commented to me one time that old posts can be cleaned up, updated, and polished.

      Or repurposed other ways, for that matter — on your home blog, in your collateral pieces, as elements in your drip campaigns, etc. If people reading this have valuable content on AR, my thinking is that you should harvest it with FeedWordPress before you burn any bridges.

    17. Jeff Brown July 10th, 2010 1:03 pm

      Geez, Louse, Myrtle, people — If AR was worth a damn in producing killer numbers for closed transactions we’d all know about. We don’t. What’s the fuss about?

      As far as I’m concerned it’s been nothin’ but a buncha ministers preachin’ to each other and claiming ‘great Google juice’ as the reason. How many commission checks in a bottle of that special Google juice are there? Enquiring minds wanna know.

      Vendors on the other hand can tell a measurably different and more successful story. For Heaven’s sake, they’re fishin’ in a pond full of ripe agents just askin’ to jump in their nets.

      But brokers/agents? Really? I’m thinkin’ they’ve only lasted this long cuz Barnum was right.

    18. Brian Brady July 10th, 2010 2:10 pm

      “How many commission checks in a bottle of that special Google juice are there? Enquiring minds wanna know.”

      Missy Caulk and Lenn Harley claim here to have had measurable success from Active Rain:
      http://activerain.com/action/signup

      This thread has over 1,000 entries but only 10-15% of them mention specific transactions and/or GCI amounts:
      http://activerain.com/action/testimonials

    19. Jeff Brown July 10th, 2010 2:31 pm

      I see ‘some’ make money there. Guess my point is that if it was a consistently big winner, this discussion wouldn’t be happening. The same 10-15% would be makin’ the money elsewhere as are there. Make any sense?

      AR just hasn’t proven to be special in any way I’ve been able to fathom.

    20. Brian Brady July 10th, 2010 3:11 pm

      “The same 10-15% would be makin’ the money elsewhere as are there. Make any sense?”

      Completely. I’d bet those 10-15% would make money selling time shares in France not knowing a lick of French.

      “AR just hasn’t proven to be special in any way I’ve been able to fathom.”

      Unless you have a lot of content there. That’s more my point. It is special inasmuch as it DOES produce inquiries that turn into money. Should someone walk away from that because of thirty bucks a month?

      Only if it’s working.

    21. Alison Shuman July 14th, 2010 7:23 pm

      Great post. I have been more seriously considering upgrading my Active Rain account (for my real estate agent business, or for my appraisal business), but the $30/month-ish fee stings. Have been wondering what I could realize from the value for essentially $360/year.

      One agent in my office blogs regularly on AR and has for at least 2 years and she sees a LOT of traffic as a result. She has also completely cornered one segment of the local market via other means, so it’s hard to tell which came first – traffic from blogging, or traffic to her blog from her other activities.

      Not cool, however, that AR is not playing straight with founding members. :-(

      Alison

    22. Judy Orr July 17th, 2010 10:09 pm

      I have received 2 listing referrals from AR, so in that respect it has earned it’s zero cost to me. I am a founding member (Rainmaker) and I have posted in the past 90 days so I am not being charged anything to remain in AR.

      Should they have demoted Jay without warning – of course not. Should he have received some slack since he participated by commenting? I think so, although I don’t know how long ago he made his last comment.

      I do not expect my AR posts to rank well. I use them to send one-way anchor text links to my other sites/blogs. A couple of listings, one-way links to my sites and no cost to me? Guess I’ll hang around.

    23. Brian Brady July 19th, 2010 2:25 pm

      “Should they have demoted Jay without warning – of course not.”

      Agreed. It was poor form. I think it was an unintended action from a hastily executed decision.

      “Should he have received some slack since he participated by commenting? I think so”

      Active Rain offered to “make him whole” and restore his account.

    24. Jay Thompson July 19th, 2010 3:42 pm

      “Active Rain offered to “make him whole” and restore his account.”

      Which they did.

      And then two days later it was gone again. Without warning, again. I’m sure they’d re-re-instate it if I asked.

    25. Brian Brady July 20th, 2010 11:01 am

      “I’m sure they’d re-re-instate it if I asked.”

      No doubt.

    26. Paul Francis July 20th, 2010 10:47 pm

      Jay’s decision… He’s probably gotten a lot of link juice to his own site from it..

    27. Jay Thompson July 20th, 2010 11:00 pm

      “Jay’s decision… He’s probably gotten a lot of link juice to his own site from it..”

      Not really. But in fairness to AR, that was never my intent there.

    28. Paul Francis July 21st, 2010 12:48 am

      Just to clarify… certainly not suggesting it was.

    29. Cheryl Johnson July 22nd, 2010 6:19 am

      This is just a quick FYI that I meant to add over a week ago.

      In response to Greg’s comment “If people reading this have valuable content on AR, my thinking is that you should harvest it with FeedWordPress before you burn any bridges.”

      FeedWordPress will only grab the most recent 25 or so posts. To harvest your entire AR content, you can use this plug-in http://zeek.com/import-your-activerain-posts-to-your-wordpress-blog/

      Then set up FeedWordPress to continually and automatically copy anything else new you post on AR.