The Real Deal
September 1, 2008
Real Estate Ad Budgets Shrink
Brokers switch from print to online advertising
By Helen Hill
Gerry Liguori, broker and owner of Boca Raton-based Premier Estates Properties, halved his company's $160,000 annual real estate advertising budget over the last three years. Andy Weiser, a broker associate with Coldwell Banker in Fort Lauderdale slashed his annual marketing bill from $100,000 to $25,000 and Kevin Tomlinson, an agent in the Miami Beach office of Esslinger Wooten Maxwell Realtors redirected $20,000 worth of print advertising to creating a strong online presence.
Nationwide, spending on real estate print ads is down 20 percent since last year, while online advertising (not including spending for agent Web sites) is up 25 percent, according to Kip Cassino, vice president of research at Borrell Associates, a Virginia-based media research and consulting firm.
Yet analysts say the decline in print ads and rise in online ad spending in South Florida has been sharper than the national average as brokerages and their agents struggle to find media venues where they can leverage slimmer advertising budgets in a bleak and changing market.
Daily newspapers remain the biggest losers in the industry-wide shift. The Miami Herald's weekend real estate insert has shrunk noticeably and now contains fewer listings and has a condensed format. Real estate advertising has also declined in Broward County's Sun-Sentinel and in the Palm Beach Post.
An analysis by Media Choice, an advertising monitoring agency, projected that about $156 million would be spent overall on real estate advertising in South Florida this year, up from $150 million in 2007.
Steep declines continue to be part of the print advertising outlook. Newspaper ad spending is projected to drop about 23.7 percent, from $31.1 million last year to $23.7 million this year. Ads in other print outlets, like news weeklies and community papers, are projected to fall 24.4 percent, from $6.7 million last year to $5.1 million this year.
Conversely, Media Choice projects that spending on online and interactive advertising will surge 35 percent, from $57.8 million last year to $78.1 million in 2008.
Anthony Criscito, a partner in the Criscito Group, said he reduced his print advertising when he saw that most traffic was coming from the Internet. These days his firm uses blogs, YouTube videos and Craigslist to advertise new listings. Criscito also sends e-flyers to a personalized data base.
Kevin Tomlinson of EWM has sold $40 million of Miami Beach property so far this year, all due, he said, to his online marketing strategy.
"One hundred percent of my buyers and sellers found me on the Internet," said Tomlinson. "My Web listings are updated three times a day and live feeds are available. My high visibility on search engines such as Google is key."
Tomlinson sees local online video as the next level in real estate marketing, a tool that can give customers a taste of the lifestyle, flavor and character of a neighborhood. Though the $20,000 video start-up costs are high, Tomlinson likes a marketing tool that works around the clock.
Still, print has its adherents. Kim O'Mahony, another agent with EWM, said she spends between $30,000 and $40,000 per year on advertising, and about 75 percent of that goes to the Miami Herald's weekend real estate section, with most of the rest going to weeklies and the occasional glossy magazine.
"I think a segment of the market wants the physical paper, especially on Sundays," she said. "If the phone didn't ring, I wouldn't do it."
Because so many buyers in South Florida are foreign, Jeff Morr, CEO of Majestic Properties, has shifted much of his advertising to online venues, although he buys print ads for his most expensive listings.
Diana Riser, publisher of Boca Raton Magazine, said that real estate ads are picking up for the winter season as house prices drop. The magazine's broad newsstand distribution and long shelf life work in its favor.
Andy Weiser's switch from print convinced him how valuable online marketing can be in building relationships with his customer base, especially the 50 percent that comes from overseas.
"I can qualify people through my Web site," he said. With $20 million in sales last year, Weiser believes that being online helps reinforce his marketing message. "I am the product, not the property," he said.