Real estate companies spent more on newspaper advertising in the early part of 2006 than they did last year, but did so grudgingly, according to a survey that predicts the demise of print real estate ads.
The Newspaper Association of America reports that first-quarter revenue for print classified real estate advertising was up 26.3 percent compared to last year.
But Realtors say they buy print ads because their customers expect them to, not because they produce results, according to a survey by Florida-based Classified Intelligence LLC and Realty Times.
The survey also includes insight from a panel of nine experts — many who work for online companies — who say the Internet is poised to take a bigger share of real estate marketing budgets.
Of 101 Realtors nationwide, 58 percent said they are spending more on marketing this year than last, but 36 percent said they spent 10 percent or less of their total ad budgets on print ads. Nearly one in five didn’t advertise in newspapers at all.
But the Internet isn’t yet siphoning off all of the newspapers’ real estate ad revenue. National Web sites, such as Realtor.com and Move.com, actually received less business from Realtors surveyed than newspapers. Of those surveyed, 69 percent said they didn’t advertise at all on real estate Web sites aimed at a national audience.
Most respondents — 51 percent — are taking advantage of free classified Web sites, with two-thirds of that group using Craigslist and nearly half listing on Google Base.
Only a few Realtors — 33 percent — spend more than $10,000 on advertising, and it’s not print or online that gets most of their dollars. Flyers, yard signs and billboards that get the word out “on the street” remains the leading category for Realtors’ ad dollars.
When Realtors do shell out for online advertising, the biggest chunk goes for their own Web sites, the survey found.
If anything, the survey highlights that there’s no one dominant method of advertising. Although that can be frustrating for agents trying to determine the best mix of print, online and “street” advertising, many experts say there’s no one-size-fits-all solution and that different ad mediums can be complementary.
“Even though it’s now easier than ever to track advertising results, you still have to do a lot of experimentation to determine the right mix,” said Peter M. Zollman, founding principal of Classified Intelligence. “What works for one person in one market is not necessarily going to work for another person in the same market, or a different market. The only way to determine ‘what’s right’ is to experiment and test various options, and to keep testing them because what works now may not be the best approach 6 months or a year from now.”
Zollman and the experts consulted for the survey believe that the recent surge in real estate print classifieds is the industry’s last hurrah, and that the Internet will become dominant.
“We’ll see Internet advertising take on a growing share at the expense of print (but note, I’ve been saying this for seven years and it still hasn’t happened),” Google’s Sam Sebastian, is quoted as saying in the survey. “I think the advertising creative will change a bit as well. You’ll see less listing-based advertising in print and outdoor with more of an emphasis on driving traffic to the broker’s Web site.”
So what’s taking so long for the transition to happen?
“The difficulty is that many sellers value print advertising because they see it, they feel it, and they also feel that there is an investment that the agent is making in their listing with some forms of print advertising,” said Vince Malta, president of the California Association of Realtors. “Ultimately it will be a combination of both print and online, but I see the emerging trend being toward Internet-based advertising now that we have the traditional home buyer in the minority using print advertising. Our surveys show that for 70 percent of our home buyers, their search starts on the Internet. That’s a very important statistic for brokerages as they decide how to spend their advertising dollars.”
Zillow’s Jorrit Van der Meulen sees “an enormous disconnect” between media consumption and media ad buys.
“As an example, 8 percent of media is now being consumed via newspapers, yet 30 percent of media spend goes to newspaper. On the flip side, 34 percent of media is consumed via the Internet, and only 6 percent of the ad spend happens online.”
The disparity may be even greater in real estate, Van der Meulen says, and “This disconnect cannot persist long term.”