They have seen the light! What agents and brokers have know for the last couple of years the big boys at corporate have finally figured out. Newspapers no longer work for home sales advertising. Almost every agent and broker I have talked to about advertising in newspapers has said the same, but the prevailing mentality of sellers and corporate real estate companies demanded the practice continued.
And this has cost the agents a bundle. When things were going strong they could afford to throw the customer a bone and run the ad in the weekend real estate supplement, but now that the market has tightened and homes are taking longer to sell, if they sell at all, agents can not afford to throw marketing dollars away.
And fortunately the big boys led by Richard Smith at Realogy are coming to the same understanding. The 14 percent slowdown in the 1st quarter on newspaper advertising spending is expected to go down even further and never come back according to experts. This is another huge blow to newspaper companies across the country but should provide more opportunities for those who are marketing homes on the internet.
So to all the agents out there who hate placing newspaper ads, do not despair. You know newspapers are dead, now the big boys at corporate have learned that lesson, and soon the customers will to. .
Smith, president of Realogy Corp., the largest residential real estate broker in the U.S., said the portion of his Coldwell Banker and Century 21 branding budget devoted to newspapers will shrink by as much as two-thirds next year from 2006 as spending moves online. Newspapers will receive 70 percent of Realogy’s home-sale advertising by 2010, down from 84 percent this year.
The shift, echoed by executives at Berkshire Hathaway Inc.’s HomeServices of America Inc., the second-largest broker, is a sign that real estate advertising won’t recover fully from its slump this year when the housing market rebounds. Newspaper officials such as McClatchy Co.’s Gary Pruitt are mistaken in predicting a comeback, Smith said.
“It’s going to be bloody,” Smith said in an interview. “The newspaper industry is going to have to adjust.”
A 14 percent decline in spending on real estate ads in the first quarter accelerated in the second period, estimated media consultants Borrell Associates in Norfolk, Virginia. Sales will drop by more than one-third by 2011, Borrell predicted.
The collapse is especially significant because home-sale ads propped up newspapers last year, after automotive and employment spending declined. Real estate accounted for $5.16 billion, or 30 percent of all classified spending at newspapers, where overall advertising totaled $46.6 billion in 2006, according to the Newspaper Association of America. via Bloomberg.com
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My office has been open since December 2003 and we have always had a policy of foregoing newspaper advertising. Almost every buyer out there conducts their initial searches via the Internet and directional signs. Newspaper ads are prohibitively expensive and they DO NOT WORK!
http://mikeelliottsblog.wordpress.com
Newsprint advertising is indeed dead – but many agents are afraid to have this discussion with their clients. We have abandoned print advertsing long ago – and intestments in online space is more more efficient!
Outstanding. Simply outstanding. We've been talking about this in the RE.net for a long, long time. It's good to see a company with Realogy's influence make this move. Now, if they would just make OpenHouse.com functional …
This trend could be a death blow to newspapers who are severely bleeding at the pocketbook now from loss of ad space at all levels.
The real estate factor was their biggest prop, along with motor vehicles. And, car sales, too, are fleeing to the internet.
–Jack Payne
http://www.sixhrs.com
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