Richard A. Smith, president of Realogy Corp., dropped a bomb on the newspaper industry this week when he told Bloomberg News that the Coldwell Banker and Century 21 branding budgets for newspapers will shrink by as much as two-thirds next year from 2006.
The company intends to slash its newspaper advertising budget to 70 percent of its home-sale ad spend by 2010, down from 84 percent this year, Bloomberg reported, as it shifts more ad dollars online.
Realogy is the largest real estate brokerage company and franchisor, with company-owned and franchise brands including Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s International Realty.
The move should come as no surprise to the newspaper industry, which has struggled with waning advertising revenues in each of its classified categories — real estate, automotive and jobs.
According to the National Association of Realtors, more than three-quarters of consumers now start their home searches online. Real estate brokers are increasingly partnering with Web services to market their listings to a wider audience.
Research company Borrell Associates found that online real estate advertising grew from a $1.2 billion market in 2004 to a $1.7 billion market in 2005, increasing in its share of ad spending from 10.3 percent to 14.7 percent. And the company projects online ad spending to grow to a $3.1 billion market by 2010.
Realogy dropped hints last year of its intent to move more ad dollars away from print when television commercials started airing in which a real estate agent emphasizes the Internet to a couple asking about newspaper ads.
The 30-second television commercial was developed by NRT, a Realogy subsidiary, for it’s more than 1,000 company-owned real estate offices operating under the banners of Coldwell Banker, ERA, The Corcoran Group, Sotheby’s International Realty and the Sunshine Group. (See Inman News story.)