Following from Charlie’s great little article yesterday I want to turn your attention to the so called ‘glossy wars’ being run across Australia.
Over the past few weeks I have been receiving emails about a ‘heated’ war between Antony Catalano (MMP Holdings) and Fairfax’s Real Estate Print Guides. You can read a great little article on Crikey here and also The Age article here.
It seems some of eastern Melbourne’s agents including Jellis Craig, and Kay & Burton, are defecting from Fairfax Media’s Melbourne Weekly Real Estate Guide to a new publication being led by Antony Catalano (MMP Holdings) and some law firms with some the local agents taking a stake in the publication.
Now where do I start?
Yesterday’s article by Charlie pointed to a percentage of agents that claim that vendors are somewhat begging to be included in print publications. I call this segment of the market ‘truth stretchers’ or maybe ‘agents with interests in print publications’ is a better phrase. Seriously? Vendors are knocking on agents doors to advertise in print? Surely you jest!
Print Advertising
Print Advertising is a barrier market these days. Convincing a vendor to shell out thousands of dollars for a one day advert that only competing agents look at (a little harsh yes), is hardly a good advertising investment for your vendors. The barrier market I refer to is at about $700,000, this means very few people with properties for sale under this figure would look at a print campaign, hence the ‘barrier market’. This barrier is rising by the year and in a few years print publications and interested agents will only survive on the multi million dollar vendors.
This is not to say print advertising is dead, it will survive in exclusive pockets of Australia, but to middle Australia and below, it is finished!
MMP Holdings
But wait! Why have MMP Holdings and others invested in real estate print media? You only need to read Charlie’s article from yesterday to understand why – dumb money! For some reason real estate agents in Australia are still infatuated with print media and whilst print advertising is in decline it is still a very lucrative market.
Going up against Fairfax is a tough deal and one that may play out for years. The problem for MMP Holdings is that incumbent newspapers will not give up their market share without a long costly fight and most of these publications cannot stand the heat or successfully sell back to the newspapers within a few years.
MMP Holdings will have need to make an impact fast. Having a group of agents owning a share of the publication is not the smartest move either. We have seen how far that will get you with competing agents in the past – especially if this is disclosed to competing agents.
The biggest problem faced by MMP Holdings aside from money is infrastructure. Fairfax have so many other perks it can offer agents with zero real costs that it will make competing in the long term difficult. Remember Fairfax are combining their print and online divisions, so offering bonuses on the web for ‘loyal’ agents can make life difficult for MMP Holdings.
Funny Money
Something tells me everyone involved in this is playing with other peoples money. There are hundreds of opportunities out there to make money, why would you spend millions of dollars on an industry that will most surely die a slow and painful death?
All over Australia new glossy print companies are going up against incumbents like Fairfax and every time I read an article on this subject I just think why? Are agents that dumb that they will just continue to throw money at something that offers little value for money?
Maybe I am a web snob, but these glossy wars get a little boring after a while.
16 Comments
James
The whole space of offline and online real estate marketing has changed and will continue to change.
As for your last comment I personally think you have a very blinkered view of the whole situation especially from an agents perspective.
Peter Ricci
Hi James, thanks for the comment. If you can let me know how I have a blinkered view of print advertising for agents?
Nick
I’m only mildly interested in that side of things, mainly because it doesn’t have much impact elsewhere.
Wish I had some popcorn though. It should be interesting to watch. 🙂
Simon
ahhhh yes a web snob – good description. Not a totally bad attitude I suppose…one that narrows ones perspective a little, but thank you for your honesty.
How about some pro print articles – there is plenty to write about. Widen your own blinkers a little and you will find them.
The truth is out there!
PaulD
Hi Peter. The answer to your last question is a very firm YES !! The salesperson who lets themselves get pushed around by a vendor, is not much of a salesperson. It is their job to show how the vendor can more effectively promote the property. Newspapers just don’t cut it anymore. But – hey what would I know, I’ve only been an agent for over 20 years, and have seen the birth of property advertising on the internet, and the quickening decline of the relevance of newspaper advertising. Any agent who can’t see that, better start looking to do something else.
Peter Ricci
Hi Simon
A friend of mine has indoor archery and axe throwing at his home. He has hundreds of yellow pages books stacked tightly against the wall.
He replenishes this each year around delivery time from all of the books left out the front of apartment blocks.
So there you have it, a positive print story 🙂
On a serious note. if you have a multi million dollar home and you want some immediate impact then yes, go for print as well, but it has been relegated to second class with a first class price.
Paul, thanks again for your input 🙂
Robert Simeon
There are many marketing concepts threatening print – and I agree with Peter that Yellow Pages is a great example. Does anyone keep them in their homes any more or, do they do as I do and toss it into the recycling bin.
I believe video will eat into print revenues Note: I said eat into and once the leading agencies start moving with the times advertising budgets will be remodelled accordingly.
Don’t forget the revolutionary iPads that launched last weekend in the United States. Apple sold 700,000 iPads in the first two days a 680 gram, 24cm x 19 cm dynamo. Look at the capitulation of the newspapers in the United States to gauge public sentiment. Media companies are hoping that it will be their lifeline where consumers will read newspapers from their tablet.
This is probably a correct assumption although it should be noted that consumers won’t turn 120 pages of real estate – the content will require major modification to suit what many are calling the 21st Century printing press – iPad.
Once or if they do modify their advertising templates this will resonate back through print – so the newspapers would then be seen as shooting themselves in the foot. With online big is not always best – which is evidenced with the online models with the real estate portals where up to eleven properties appear on a page. This is the template of the future – just try telling the newspapers that!
iPads will assist some newspaper demographics and simply destroy others – you can get your iPad in Australia next month 🙂
Andrew Blaxland
The article yesterday mentioned that 55% of all property enquiry now comes from online advertising. My experience from running both online and print at seperate times for the one property is that the figure in our part of town is closer to 80% than 55% (like most of your clients) . I can’t help but think that companies such as MMP are barking up the wrong proverbial tree indeed… What on earth are they thinking?
I will be using this information in vendor presentations.
Jeff Rodgers
Could it be that agents are going to promote a new ,as yet,unproven medium that they coown to reap the profits.Is there a duty of disclosure to the vendors? In Victoria a requirement under section 48A of the Estate Agents Act is that a company cannot retain any rebate or benefit (monetary or non monetary) When it is obtained it must immediately paid back to the vendor (48C)
Should the REIV /of whom these media owning agents are members step in do something if it inappropriat ie A conflict of interest or should Consumer Affairs Victoria step in.Secret commissions and advertising rebates,aka kickbacks are illegal.The question is,does pushing the vendor to use “your own”paper trancend these areas and is it fair and equitable?
Glenn Batten
Jeff
I would think that disclosures would be the norm but remember that there are no kickbacks. The agents concerned are actually shareholders in the new venture.
This concept is hardly new and has run successfully for the benefit of owners and agents in a few areas around Australia. As long as you are transaparent everything is fine. Its when you try and hide things that there are problems.
Whilst print still remains an option, albeit one on a slippery slope downwards, I personally would rather support an industry owned solution. Every agent I know that has made the switch can’t speak highly enough of the model.
Traditional media has no problems slamming property and agents on the front page to sell papers and then put their hand out for an ever increasing advertising costs. Similarly the difference between mates rates offered to some and what other offices pay can be obscene. In the Sunshine Coast that appears to be one of the driving factors for the mutiny of most agents from the local daily to http://www.mypropertyreview.com.au which is still going strong and approaching its 100th edition.
Robert…
Reports are they were expected to sell up to 700,000 but thats change now and the claim is only around 300,000 iPads were sold. Still remarkable mind you for a single day. I believe the Australian has an iPad application ready for an Australian launch as well.
The only thing that is holding me back is quite a few reports that the wifi has a few problems and whilst most can probably be fixed in software one issue is the signal is quite weak which is normally a hardware issue. For those on 3g it matters little but I am on acreage with no 3g signal at home so would have to rely on the wifi so hopefully they can fix that soon.
Also on the issue of Yellow Pages .. we just did the annual signoff.. I was interested in the Yellow Pages online but wanted the stats.. For the Gold Coast Real Estate section the latest traffic was much less than half that of the prior year. I assume that would be typical with Yellow online for everywhere and just further proof that Telstra cant do anything online no matter how much money they throw at anything….
James
Peter, I was taking from an overall marketing perspective I also believe agents should be talking some of their spend out of offline marketing and putting it into online marketing.
Shane Dale
Print will survive when it represents a cheap enough option, to use. This would be a fair margin over the print and distribution costs, then it can be used effectively to reach that aspect of the market that appreciates it.
Sure its always going to be more expensive than internet per enquiry, but if it influences a sector of the market that responds only to print – then the evaluation of its value is up to the agent. I personally think the print media is primarily aimed as a profile tool for agents themselves. If you dont value those people who like the print media, then ignore it and pocket the savings, the majority of buyers are clearly on the internet. Its not a matter of choosing one over the other, they do different things. Its perfectly acceptable to ignore print if thats your style.
Having said that – its self evident that the vast majority of agents dont behave purely logically, and tend to follow a group mindset – doing whatever is considered normal for their area. I suspect this forum represents the cutting edge of internet devotees – most agents wouldnt get what is being discussed, nor would they be interested – you guys are strategically minded, and most agents are sales people, not strategists. Its not an insult, its simply a fact. Hence print will survive if its cost effective for some, even if its wildy more expensive than internet per enquiry.
Charlie
Great discussion – I put a link to my ‘$1bn dollar black hole’ post on my facebook page and got some interesting feedback from agents: one said this:
“Charlie – I think a lot of agents still do the ads for branding and for generating new listings and not so much about selling. I recently lost a $2.6 listing to a company that spends s*loads on branding themselves in the local papers – I believe they got the listing because of this paper profile – is it real? Don’t think so – but they got it and I didn’t – perception created that they are the dominate player by big 2-3-4-5 pages of ads every week in local papers”
Another agent said “You’re on the money there!”
Can we help answer this?
PaulD
There is no question that print is sliding down the slippery slope into oblivion as far as real estate advertising is concerned. We come across the argument that bigger is better (in terms of space in the newspaper) every day. One of the answers is to sell the internet to the vendor. Plenty of agents just accept what the vendor says. You have to prove to the vendor that newspaper advertising is meaning less and less. If you don’t do that, then the vendor will accept the premise that the agent with the biggest exposure in the newspaper, is the one to list with. It is really as simple as taking along a laptop and showing them what you can do with their property in terms of information. The big problem (rather, advantage as far as I am concerned) is that most agents treat the internet like a newspaper. They put a jumbled collection of poor quality photos, no address, no price, no floor plan, no video, no NOTHING, and expect the internet to perform miracles. And, sometimes it does. Agents love big pages in print, because that is the easiest way to get a quick fix for their own ego. The buying public generally couldn’t care less. They look for the property, not the agent, as amazing as that may sound to some out there.
Shane, Your “aspect of the market that appreciates it” (print that is) is the sector that is the reason print is bound to fail. The reason that is, is because they are dying. There is NO way that you will ever get someone who has grown up with computers to all of a sudden change to print. The people who don’t understand the digital world will very soon fade into insignificance in terms of numbers. There is no point in spending 80% of your marketing dollars on 5% of the population. It never ceases to amaze me that 60 something people email us and ask can we do an appraisal on their property. Their knowledge of the market, and where and how to source comparative sales is fantastic. So even that sector of the market has seen the light.
Greg Vincent
Whilst I am very biased towards the internet because I teach agents about internet marketing & Social Media marketing, etc, B2 readers may be quite surprised to read that I still believe that Print Media within the real estate industry has its place and will continue to for a long time to come.
Print Media drives people online searching for more information about the properties but unfortunately even though the advertisement features the agents website address, a large percentage of the traffic generated from a Print Media advertisement for a property will end up going across to the major portals like REA & Domain. (simply because learning how to navigate through all of the different real estate agent websites advertised in the paper is too cumbersome, so most browsers will tend to use the major portals to search for more property info, mostly because they are familiar with navigating these sites).
Which means that a hell of a lot of the 1 billion+ spent in Print Media actually helps to send more traffic to REA, Domain, etc.
One thing is for sure. There are definitely more effective and more efficient ways that agents can use Print Media than they currently do.
Shane Dale
PaulD – yes the print budget is sliding down fast, and the cost per enquiry is very high. Yes – people familar with computers will use that medium first – and in fact as I have said before – many people who are not big web users, will learn the browsing skills when it comes to choosing property – because its such a huge impact on their finances, and lifestyle, they have a big incentive to become web savvy.
But still – apart from when you are actually searching for property, you dont get brand awareness of individual agents. Being in print, and having signboards helps with that. Its fun to browse printed glossy property pages. It brings out the voyeur in all of us. It has a place, and it will always be disproportionately expensive, even if prices go down – when you compare with internet – and I dont see internet prices ever matching print.
Some people just like printed pages, and some people dont like using keyboards and mice. It also drives traffic to websites of agents direct to see their listing presentations. Its “the vibe” that some people like, its not plain logic, because if it was – there would be no print or signboards or window cards – and everyone would have an iphone and use interactive floorplans and virtual tours.
Speaking of which – alot of people say a shopfront isnt needed anymore – which is true, but you can still effectively use a shopfront for the benefits it does bring, its just not absolutely essential.