Online Real Estate Advertising to Pass Newspapers by 2009

There is some significant research released today about trends with respect to Real Estate advertising and newspapers. According to Borrell Associates’ 2005 Update, Online Real Estate Advertising to Pass Newspapers by 2009. Is this troublesome for our friends in the print world, absolutely.

The Internet has evolved into the most powerful consumer research tool in the entire process of soaring real estate sales. At any given time, the report says about one percent of the adult population is actively seeking a home that they will purchase within the year. In April, nearly 20 percent of the population had visited a real estate site.

Further to the report from Borrell, overall real estate advertising has been sluggish. This year Borrell is projecting that $11.4 billion will be spent, up just 2.2 percent from last year. Inside the numbers, though, a major shift continues to erode the traditional advertising foundation of newspapers, homes magazines, direct mail and directories, while the online segment gobbles up share.

This year’s online ad sales will hit $1.8 billion, for a 15.7 percent share of ad dollars. If the trends continue, by 2009 the online media share will surpass that of the long-time leader, newspapers. Online advertising spent per home sold has already reached $210, more than one-third of the newspaper ad spend. .

Is this trend really a surprise? Looking at my personal experiences in buying real estate and going through the process again looking for investment properties, I can say that neither my wife nor I have ever purchased a newspaper to search for a home. Many of my friends and family have told me that usually the first place they start when looking for property is the MLS listings. In terms of purchasing new property, clearly this is driven by the desire to select an area first, and then simply to follow to all the showhome signs and flags.

Before I discuss some specific Calgary based real estate sources, another release today from by Veronis Suhler Stevenson titled, “Communications Industry Forecast” is echoing the findings above but in a more aggregate way.

Advertising is expected to grow at a rate of 6-7 percent per year through 2009, reaching $260.9 billion, “driven primarily by the migration of advertising dollars from traditional to new media. Moreover, consumer spending for media is expected to exceed $1,000 per year, per person for the first time in 2009 – having surpassed the $1 trillion mark in 2008 – with the average consumer expected to spend 10 hours per day with media, largely DVDs and the internet.

The “new advertising media” category is forecast to grow 20.7 percent this year to $37.9 billion, compared with traditional media advertising that is expected to grow 3.2 percent this year. New-media advertising is projected to grow at an annual rate of 16.9 percent through 2009, while traditional media advertising grows at a rate of 4.3 percent.

The report’s classification of “new advertising media” includes cable and satellite TV, satellite radio, the internet, and ads on movie screens and in video games.

All advertising together is forecast to grow at an annual rate of 6.8 percent through 2009, surpassing the 3 percent growth rate of the five years leading to 2004.

However, consumers are expected to spend less of their media time with ad-based media (e.g., TV and radio) and more on consumer-supported media (e.g., cable, the web, books), which will account for about 46 percent of consumer time spent on media in 2009, up from 36.4 percent in 1999.

The report last week from Ipsos Reid, Young Canadian surfers cut radio/TV, is echoing the same effect that the Internet is having on these traditional media resources. However, going back to the Real Estate example that we started with, what is a realtor suppose to do.

Here is a quick outline of how I would approach this:

1) Admit you want different results

It amazes me that many realtors, in fact more business owners, complain about results, yet are willing to try different ideas. Here is the fact, if you are happy with your current results, don’t change, if you are not happy with your current results you really have 2 options, a) explore other possibilities or b) if you don’t plan to change, shut up.

2) Set an objective. For this example, I will use the objective of increasing “net” revenue at the end of the year

This objective can be accomplished by 1 of 2 methods. The first consists of generating more sales from the current advertising budget, basically make your advertising work more effectively. The second consists of generating the same number of sales from a reduced advertising budget.

3) Determine current sources of advertising and the percentage each has relative to overall budget

Where do you currently advertise? Bus Benches, TV, Yellow Pages, Radio, Newspaper, Real Estate News, Internet (no, your website does not count) in terms of banners or pay per click, etc. Hopefully you have been keeping track of exactly where leads are coming from. Keeping in mind that leads from word of mouth and referrals, need a follow-up question of “where did you get my phone number?”. See my post on directive vs. creative advertising.

At this stage, ask yourself what percentage is for Internet advertising? I advise my clients not to count their cost of web site design, hosting, or domain registration in your advertising budget. Remember, a website is nothing more than a more interactive business card / brochure. In itself, a web site does not generate leads, what generated leads is people visiting your website from word of mouth, TV, radio, Yellow Pages, Newspapers, Internet, etc. Hopefully you see the distinction I am making.

4) Examine your budget percentages. If your Internet budget (pay per click, pay for placement, banners, etc.) does not account for 10-20% of your total advertising spend, I would suspect that some of your advertising dollars are not as effective as they could be.

I have many posts that examine this further in terms of numbers, that I encourage you to read. Here are some links to those posts:

Putting Numbers into Perspective
2 Killer Strategies for Local Online Marketing

Here is a quick list of sources, outside the MLS Listings, that I recommend real estate agents have a link to their web site: – Canada’s #1 Online Commercial Directory – A strong list of local real estate agents – Another strong list of local real estate agents

One Reply to “Online Real Estate Advertising to Pass Newspapers by 2009”

  1. Jim Messner - Calgary Cochrane Realtor says:

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