Spending on print advertising continues to rank high among real estate practitioners, though a growing number report that they are advertising at national Web sites, according to a report based on an August survey.
The report, prepared by consulting company Classified Intelligence LLC and real estate publishing company Realty Times, indicates that word of mouth and signs and billboards are the most effective sources of leads, and suggests that “agents and brokers don’t see advertising in general as a very effective marketing tool.” The Web-based survey, conducted in August, had 431 participants from Realty Times’ audience of agents and brokers.
“Agents and brokers appear to be spending their advertising dollars mostly the same way and in the same forms of media as they did a year ago,” according to the report, though there was a 13 percent rise in the number of respondents using national Web sites as a part of their advertising strategy, compared to last year’s survey.
“Of those using such sites, most are devoting 10 to 20 percent of their budget to them,” the report states. The survey also noted a 3 percent increase in the number of participants who spend money on search-engine advertising compared to the 2006 survey. About half of the survey participants said they don’t spend any ad dollars on national Web sites, compared with 61 percent in the 2006 survey.
About 56 percent of respondents said they are “fairly confident” that they are effectively spending their advertising dollars, though only 5 percent expressed a high level of confidence and about 40 percent reported that they are “overwhelmed by advertising choices,” according to the report.
And about 58 percent stated that the investment they made at their Web site or sites “doesn’t bring the return I hope for,” while 31 percent said they do see the expected return.
Less than half (47 percent) of survey participants said their ad budget is larger this year than it was last year, compared with 58 percent of respondents who said they were spending more in 2006 than in 2005.
Respondents, when asked to estimate their share of ad spending at various media categories, rounding up to the nearest 10 percent, said they spend about 17.2 percent of their advertising budget on their own Web sites; about 14.7 percent on fliers, yard signs and billboards; 12.5 percent on direct marketing; 11.2 percent on print ads in local newspapers; 9 percent on print ads in local niche publications; 7 percent on local-search advertising; 6.9 percent on ads at national or regional online services; and the remainder on local online niche publications, online local newspapers and other ad media.
Peter Zollman, executive editor and a founder of Classified Intelligence, said actions speak louder than words when it comes to print advertising. “Clearly, the agents and brokers would like to think they’re moving away from print. But, in fact, they’re staying with it — in part because buyers want it and in part because old habits die hard,” he said.
“We think, to a degree, this indicates that the downturn in real estate advertising in print is much more due to the cyclical forces and the recession in real estate than it is an actual shift to online (advertising).” Even so, he said the survey results indicate that ad dollars are slowly and surely moving “more toward online than print.”
The report states, “Certainly, (second-quarter) results of the U.S. market leaders indicate print advertising is anything but healthy.” As examples, the reported noted that Gannett Co. in July reported a 9.9 percent decline in real estate advertising in the second quarter ended June 30, publisher Tribune Co. posted a 24 percent drop, and McClatchy Co. reported a 19 percent decline in real estate ads.
And a separate third-quarter classified advertising report by Classified Intelligence states that real estate advertising “fell in virtually all markets” in the third quarter compared to that quarter last year. McClatchy, for example, reported real estate classified revenues fell 26.1 percent compared to the prior year’s quarter, including a 27.4 percent drop in print real estate ad revenue and a 5.8 percent drop in online real estate ad revenue.
Zollman said the real estate survey results indicate that real estate professionals are not yet paying much attention to the return on investment they are getting from advertising. “If you’re a real estate agent or broker, your real job is selling real estate. Tracking advertising effectiveness is just one tiny piece of that,” he said. “Very few of them are doing it.”
The most substantial change in the survey results this year compared to last year appear to be a result of the housing-market decline, he said. “That has, to a degree, changed everything. A lot of real estate companies have substantially curtailed advertising this year because of the real estate recession — it’s almost a real estate depression.”
Another significant change is the rise of blogs and online networks among real estate professionals — 21 percent of respondents reported that they have their own blog and 25 percent said they participate in at least one social-networking site. “A year ago, blogging and social networking were relatively unknown. Neither registered in our 2006 survey,” according to the report.
“This indicates agents and brokers are increasingly willing to try new forms of advertising, particularly when it comes to networking and relatively low-cost alternatives. With free sites, blogs and social-networking sites gaining popularity, publishers of print and other types of paid advertising likely will find it even tougher to attract agents and brokers.”
About 86 percent of respondents reported that they have their own Web site or sites.