Real estate advertising is set to rebound in 2010, after a devastating decline in 2009, and traditional media such as newspapers and print catalogs will be a surprising beneficiary, according to a forecast released this month by Borrell Associates, a long-time observer of the local advertising market.
Borrell has been in the business of analyzing local advertising trends since the 1980’s. I actually competed with Gordon at Communications Trends, Inc. in the late 1980’s, when both our companies began to look at the emerging competitive trends in the yellow pages industry. Gordon’s work is solid, and his firm has been on target more often than not with their forecasts. He accurately forecast the scale of the shift to online in the real estate business, for instance.
As a result, I was particularly interested in seeing his firm’s forecast of real estate advertising for the next year. There are three big take-aways from the analysis and surrounding discussion: An over-correction in ad spending disproportionately hit traditional print media; the share shift between print and online is essentially over, with a slight correction back to print in the year ahead; and a new secular shift is underway moving real estate marketing dollars out of media and into other promotional spend.
Overall, advertising by real estate agents and brokers is set to increase 2.7% in 2010 to $8 billion, following a 19% decline to $7.8 billion in 2009, according to Borrell. Newspapers and other print (including home catalogs) are set to have strong rebounds in 2010, following dramatic declines in 2009. In fact, in 2010 traditional print media will recover a small percentage of the share that it lost to online media over the past several years.
In a webinar discussing the forecast, the Borrell team addressed the factors driving the recovery of print. Agents and brokers recognize that the Internet has become a free source of distribution, but that investing in internet media provides only a minimal lift in business activity. Print advertising remains the most effective way to stand out in a local market and drive leads, Borrell’s research with agents and brokers shows, and in the next a number of realtors will return to using print in order to help drive their market presence.
Since we publish The Real Estate Book, the forecast obviously was music to our ears. But more importantly, it was confirming to what we’ve been hearing from a lot of our customers and consistent with what our internal research was showing. While print advertising doesn’t deliver the total market, like the Internet does, it does deliver a responsive market, giving our customers market recognition, brand awareness and a valuable source of leads.
To reinforce their observation that the market shift between print and online is essentially complete, Borrell presented a projection through 2014 of the relative share for both media across all real-estated related ad spending, including realtors, financial services, multi-family and commercial.
A third market shift is occurring, Borrell cautioned.
Within online real estate advertising, money iis moving into marketing activity that do not rely on a media company to bring buyers and sellers together. Thanks to the proliferation of inexpensive database marketing tools and techniques, real estate advertisers are developing direct, one-on-one relationships with their prospects and customers through e-mail marketing, social networking and various promotions and public relations efforts.
You can order the full report, with detailed forecasts of each category, a demographic analysis of the home shopping consumer and local observations and projections, here.
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