How do you know how much to spend marketing real estate?
Some interesting survey data that just became available should be of help. A video marketing company in the US surveyed 1,304 real estate agents to see how much they spent. There isn’t a lot of info here, but what there is is gold.
One thing that jumped out at me: The agents surveyed said a significant portion of their listing budget was spent on newspapers, even though only 20.4 percent said they think this medium is “effective.”
Yet, 49 percent felt that online ads were “very effective.” The reason more agents aren’t putting their money where the results are is that they feel the vendors want print advertising.
25 Comments
Peter John Mericka
Isn’t it more likely that the estate agents who use their clients’ money for print advertising know that print advertising is good for advertising agents. If a vendor “wants print advertising” it’s usually because it’s recommended by the estate agent.
Gemma Duff
Peter, I disagree. At least in our market (i.e western sydney), our vendors who can’t tangibly hang the copy of the newspaper with their house photo on the wall, believe were doing a substandard job. No matter how much we try to push our vendors to maximise the use of the internet and where our enquiry comes from. It seems that traditional advertising, even window cards, reign supreme.
Glenn Batten
Ahhh.. maybe all those buyers who respond from a print ad have it all wrong! What do they know… the agent wasn’t advertising for the property they were just advertising their own office so why are they ringing on that property. Is that how it goes Peter?
I don’t think even REA would claim Print is dead and both portals have their alliances with print media. Internet is on the rise and print is on the decline but print is still an effective means of attracting potential buyers and for a large percentage it is the only viable option. Not everybody is on the net by a long shot.
adam
I could argue that the leads who come from Print advertising are ‘generally’ time wasters and that the ‘Net Leads’ are from more genuine and cashed up buyers. This is only based on anecdotal evidence, but I should get some hard numbers on this to see. Print allows a much better attempt at branding an office than online, no benefit to the vendor, but tons to the agents. And lets face it, vendors are easier to convince to pay for offline media ads than online, due to the percieved costs involved.
brett
I agree with adam re easier to get vpa out of vendor for print.
In WA you cannot profit from advertising so it is hard to get $ out of a vendor for online without compromising this. For example if I have two fixed rate subscriptions (monthly) to real estate websites and 20 listings I essentailly have to divide the subscriptions by 20 to assume a monthly cost for the vendor to be online if I want vpa. The problem is my stock can fluctuate inside that month and my subscriptions are less cost effective if I am carrying very little stock. Subsequently, it is more expensive for the vendor if I am charging vpa based on listings divided by subscription cost. This means you are going to the market with inconsistent online vpa costs. a fixed cost will have you in trouble if you are overcharging, which may not be your intention at all. Also, not all vendors are paying vpa so spending more online is not attractive. There is no doubt online is a better way to go (results & cheaper) but if I need vpa to keep my cash flow and margin healthy, I need vpa to grow my online strategy.
please excuse the tangent – long time reader, first time poster 🙂
Greg Vincent
Offline real estate advertising helps to drive people online.
Arguably, the size of the advertisement may be where some of the money is wasted, but a large amount of traffic to the major websites is quite simply driven by a persons curiosity for more information & the ability to view more photographs before having to contact the agent.
I know agent’s can find it hard to find the true source of a buyer enquiry without appearing to interrogate them.
But, instead of just assuming that the buyer only saw the property on realestate.com.au or domain.com.au, it would be interesting to hear if any agents ask buyers the real question – ‘Where did you ‘first’ see this property?”
Dave Platter
Brett, welcome to the blog. It’s great to have you posting. I think your comments are certainly relevant. Thanks for sharing.
Lisa
The Sydney Morning Herald has 1.2 million readers on a Saturday. Why do they ‘buy’ the paper?… predominantly for the real estate section…Any need to say any more??
Robert Simeon
Gotta love those Fair Facts chicks !!
Greg Vincent
Apologies, in my earlier post I meant to include this article.
Advertising URL’s Offline Drives Traffic Online.
According to a Google commissioned survey from Clark, Martire & Bartolomeo,
Peter Ricci
“44% of people who saw a product or service advertised in a newspaper in the past month researched it”
Hmm, if this was the case the Sydney Morning Herald would be about 4 foot thick every Saturday.
PaulD
I didn’t realise the Sydney Morning had a circulation of 1.2 mill on Saturday (The Sydney Morning Herald has 1.2 million readers on a Saturday. Why do they
Glenn Batten
Print companies have as much creativity in their statistics as internet portals 🙂
Robert Simeon
I agree they need to take a hard look at themselves and adopt the same code of ethics that real estate agents display 🙂
PaulD
You got that right !!!! It amazes me that we have to put up with so much bull$**t when it comes to statistics regarding a business that has to be measured by the very statistics they produce. A newspaper is allowed to say whatever they want with respect to readership, as long as they produce some trumped up statistics to back it up. They don’t even have to be realistic. The worst thing is that people just accept it and move on, they rarely question it. As you said Glenn, the internet statistics are similar. I guess as long as everyone is guilding the lilly, it comes down to whoever can produce the most credible lie.
adam
Apparently 58% of all statistics are made up anyways 🙂
adam
I hope Fairfax deduct all the agents who buy the paper looking for listings to cross ? That’s got to add up 🙂
Michael McNamara
“The Sydney Morning Herald has 1.2 million readers on a Saturday. Why do they
Robert Simeon
Interesting thoughts and more importantly not exactly correct. We currently have 29 homes and apartments for sale on both REA and Domain. The online responses are at their worst that I can remember and quite a few agents in our area have mirrored exactly the same sentiments.
Without print we would be in enormous trouble as at the moment this is without a doubt the dominant magnet for buyers. Yes, we have tried electronic open for inspections only and this failed miserably. When we have a print open for inspection the numbers quadruple.
At the end of the day the agents are the ones at the coal face! Online is cheap there is no doubting that and we all know what happens when you offer peanuts!
Michael McNamara
Robert,
Interesting…
Have online enquiries dropped proportionately to the overall drop off in buyer numbers or have they taken a bigger hit?
Cheers
Robert Simeon
Michael,
There is absolutely no doubt that online enquiries have declined significantly over the last twelve months from the property portals. Buyers have declined as a direct result of global and local financial market corrections.
One significant criticism that buyers tell us of the portals is that today they lack relevance as everytime they go there it “is like reading the same book over and over again.” This is very true as agents keep placing old properties back up in priority placements so it then gives an impression that nothing is happening. I would like to see a trial where each property is given a six week life in priority and see if this changes consumer sentiment.
The portals need to start thinking more in left field as against doing absolutely nothing as presently consumers don’t find the portals all that interesting at present.
Michael McNamara
I find it interesting that when realestate.com.au had their recent e-mail issues there was quite a bit of furore.
Just read back on this forum to the thread called “summary of realestate.com.au e-mail fiasco” and you will see how seriously the real estate agent industry takes e-mail leads. It is obvious to me why Robert, Craig and others were so riled about this.
The fact is that on-line is invaluable.
So I don’t buy the peanuts = monkeys argument.
I suggest that there is a disconnect between the utility of some classifieds products in the market and their comparative prices.
Cheers
adam
Open Home times are extremely hard to find on any of the portals for buyers (I know, I asked them). The portals do not have a function where you can sort by open home times, so some buyers (or tyre kickers) consult the papers and look at the sections where all the open homes are listed, bu suburb, for a weekend (Such as in the Gold Coast Bulletin).
If REA and DOMAIN could sort by Open Home Time/ Suburb then more people would use the portals for OFI’s
My 2.2c worth
Robert Simeon
A large part of the “furore” (as you put it) was directed to the simple point that REA was charging agents and failing to redirect email enquiries which when delivered were actually well past their use-by date. No doubt many opportunities were lost as a result and the manner in which they handled themselves was a disgrace. Even after saying that they contacted all those whose emails sat on their server I received telephone calls from a few who advised that they had received no such contact from REA.
If you look at the leading real estate agencies around Australia you will observe one common denominator in that they all run large and successful e-businesses. Each and every day is spent working on their databases which explains ahy the majority classify their own online business first and REA and Domain on the secondry tier.
Which identifies an interesting scenario when Google actually launch here in Australia what direction the current pay to display business models will take. Also, with a large number of real estate agencies closing the landscape is forever changing. Where obviously revenue streams will be on the decline for quite some considerable time to come.
Sal Espro
Google vs REA & Domain portal
Property vendors, buyers & renters will only benefit from Google’s 70+% share of users using it to find property when;
1. agencies demand that their website providers e.g. Hubonline, PortPlus etc etc SEO individual listings so they can be found in searches. i.e. Currently a search for a 3 bedroom home in South Yarra Victoria returns all the REA and Domain (and some individual agency) spam catalogue listing results and none go straight to the individual properties!! Both vendors and buyers want to get to listings more easily, so let’s help them! (And agencies playing this game are just frustrating their clients when they don’t need to!)
2.Google needs to act on all sites that use SEO ‘spamming’ to get higher rankings – Just like they cut-out Meta tag spamming to make their mark on the search engine World. However, now we are now back to the olden days when the sex & real estate sites could spam search results with Meta tags. Highly ranked results for 3 bedroom homes in South Yarra should link to those home listings not to the endless REA and Domain catalogue listings that users still have to trawl interminably. All that is happening at the moment is that REA & Domain are laughing as they pick-up more ad revenue from Google.
Need any more info from an old timer happy to assist for a small fee? Drop me a line.
Sal 🙂