Real Estate agents and brokers plan to spend more than 17 percent of their 2007 ad budgets on their Web sites, though 58 percent said their sites don’t bring in the number and quality of leads they expected. The advertisers plan to spend on a variety of ad formats, including some they deem relatively ineffective, like print newspapers. According to a new report, the portion of the advertiser segment that plans to spend less on ads this year is up almost 20 percent since last year.
However, confusion abounds. Around 40 percent of those surveyed for the “Classified Intelligence Real Estate Advertising 2007” report said they are overwhelmed by the plethora of ad options; 56 percent are fairly confident about their ad decisions, and just 5 percent said they are confident about them.
For instance, 67 percent said they weren’t sure how effective blogging and social networking sites are, but only 5 percent said the same about word-of-mouth, the marketing form respondents deemed most effective. A quarter of survey participants have a social networking site and 21 percent have a blog.
“If there were more certainty, we believe a stronger leader in effectiveness would emerge, and ad dollars would shift accordingly,” noted the report.
One survey respondent who suggested Web advertising should be less complicated stated, “I’m just overwhelmed with everything that is out there and making sure that the information is getting to the Internet public.”
According to the report, agents and brokers plan to allocate their total 2007 ad budgets to several media, including national Web sites, search and local paper sites. Compared to last year, 13 percent more advertisers will use national sites such as Move.com and Trulia; spending on those sites will account for almost 7 percent of ad budgets. Still, half of participants spending on national real estate sites say the results are below expectations since they don’t generate enough leads.
The report also shows 7 percent of real estate ad budgets will go towards local search this year, 4.9 percent to local niche sites, 4.5 percent to local newspaper sites and 1.7 percent to various mobile formats.
These advertisers expect spending to be more conservative than last year. Compared to 58 percent in ‘06, 47 percent will increase budgets in 2007. Around a quarter said they will spend about the same amount, compared to 34 percent who said they’d spend the same amount in 2006. And the portion of real estate advertisers who said they’ll spend less has risen significantly from 8 percent last year to 27 percent this year.
As demonstrated in recent earnings reports from newspaper publishers, revenues from print advertising and classifieds continue their descent, but old habits of real estate advertisers are tough to break. Eighty-five percent of study participants still buy print advertising, and many do so because property sellers want them to. Indeed, many say the Internet will become the medium of choice.
Other report findings reaffirm the apparent conflicts advertisers experience when it comes to print. Even though agents and brokers panned print ads when commenting for the report, they ranked it in the top three most effective formats, after word-of-mouth and signs and billboards. In addition, just 14 percent of those using print said they do so primarily because it is effective. The report concludes real estate advertisers may consider all advertising somewhat ineffective.
“The downturn in print is more, we believe, cyclical and due to the real estate recession than due to a migration to online,” Classified Intelligence Founding Principal Peter Zollman told ClickZ News. Still, he continued, “The migration to online is inevitable.”
Of the 431 agents and brokers who participated in the August survey, 70 percent said they base decisions to try a new ad format on their own experiences with it. Recommendations from colleagues also ranked high in decision making factors.
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