Real estate ad publishers must get more competitive with their pricing and services or they will lose, whether they serve print or online advertisers, according to a recently published report.

More advertising dollars are migrating online, often to unexpected locations, but U.S. newspapers are still reluctant to sell home sellers online-only ads, according to the report published in July by Classified Intelligence, an 8-year-old consulting firm for the interactive classified advertising industry.

Belden Associates and Inman News also contributed to the 2005 Real Estate Report, which included two separate original studies and a panel discussion, as well as other, earlier studies.

The first study, done in concert with Inman, concluded that real estate agents anticipate spending more of their marketing dollars online in the years ahead. This was based on feedback from 44 active agents in cities coast-to-coast.

Where the agents intend to spend those dollars was a surprise.

In 2000, respondents said, only 14 percent of their ad budget was spent online. This jumped to 22 percent in 2004, and 28 percent in 2005. The real estate agents who participated in the study expected their online ad spend to hit 29 percent in 2006 and 2010, and 33.6 percent in 2007.

Unexpectedly, those Realtors said they were investing big portions of their online ad budgets in their own Web sites and in pay-per-click local search advertising.

“On average, respondents were only spending 4 percent of their online budgets with online newspapers – and they didn’t expect to spend significantly more over the next five years,” noted the report.

Instead, the single-biggest spending category was the maintenance of Realtors’ own Web sites – an average of 25 percent in 2005, the report said. The group anticipated that this would jump to 30 percent in 2006 and 27 percent in 2007.

The second-biggest category was local search advertising. For 2005, Realtors said 19 percent of their spending was going to the likes of Google’s and Yahoo’s search-term, pay-per-click ad programs, a trend that would continue in 2006 and 2010.

While traditional methods like yard signs and door flyers remained popular, grabbing 16.1 percent of 2005 ad spend, radio and telemarketing were the losers, scoring in the 1 percent or 0 percent range. But, the agents said, nothing was ruled out.

“We’re still experimenting,” one Realtor wrote. “Keep what works, get rid of what’s not working, replace the old with new alternatives and test for results.”

The second study in the report focused on how newspapers price and package real estate advertising. The conclusion: “It’s still darn tough to buy an online real estate ad from a local newspaper,” the study said.

This study was done in concert with Belden Associates and involved 700 U.S. newspapers across the country contacted in May and June 2005.

“They (online real estate ads) are available of course, but likely are packaged with a print ad at a total cost that far exceeds other online-only options,” the study said. “In a time when all newspaper classifieds are threatened by the exploding growth of online free-ad marketplaces, we’re dismayed that so many newspapers are still leaving easy money behind…”

The study was done by calling classified ad departments at newspapers all over the country and asking about ad rates. Of the 700 newspapers surveyed, “the folks at the other end of the phone presented few unbundling options,” the study said.

“Fewer than one-half of the newspapers in our sample said they would downsell to a print-only or online-only offering. Among those in the top 100 markets, about one-third would quote us an online-only option, while 44 percent offered a print-only option,” the study said.

In the smallest markets, the study said, only 12 percent of the papers would quote an online-only option.

Participants in the panel discussion featured in the report concluded that real estate agents need better results from all ad publishers: better data, better feedback and better leads.

The participants were Peter Ill, general manager of Trader Publishing; Robert Kempf, Internet product development director, Ottaway Newspapers; Steve Ozonian, national home-ownership services executive for the Bank of America; Joel Singer, executive vice president of the California Association of Realtors; Leslie Appleton-Young, chief economist of CAR; and Bradley Inman, publisher of Inman News.

“Forging effective partnerships with people already in the space” is the single most important improvement that real estate ad publishers could make right now, according to Appleton-Young and Singer. “Obviously comes to mind, but others are in that space as well,” the two opined.

“They should go on the Internet with boldness, with willingness to experiment, and a really targeted, methodical approach,” Inman said. According to Inman, this means working with real estate agents and brokers, and working with new business models that offer real estate sales and services differently than in the past.

Along the same lines as Appleton-Young, Singer and Inman, Kempf said he felt “the improvement we need to make is in lead generation, tracking and management. Publishers need to improve those systems and offer more in that area.”

Ozonian said consumers need to get “much more detail as it relates to the specifics of the neighborhood.”

Real estate ad publishers should better connect with home buyers and provide better data and feedback to real estate agents to show them those results, said Ill. “We are doing that by launching new publications, by more closely tying the Internet into all our publications, and by developing multiple standalone Internet models that get better results.”


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 140.

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