With the slowdown in the real estate market, it’s no wonder that industry watchers are beginning to wonder when online real estate sites like Trulia are going to begin to feel the pain. Already we’ve seen companies like Realogy announce that they’re cutting their offline spend to 70% of its home-sale ad spend by 2010, down from 84% in 2007, according to a recent Bloomberg story. But what about the online spend?
Without a crystal ball, we can’t predict exactly what is going to happen down the line, but we do know that at a time when companies are being forced to tighten their belts, the efficiency of any advertising spend becomes more important than ever.
We think that the best online advertising plays will see this slow-down not as a storm on the horizon, but as an opportunity. After all, had we been extolling the virtues of online real estate advertising over newspaper classifieds five years ago, our pitch may have fallen on deaf ears. Who re-evaluates their marketing plan when they’re making money hand over fist?
But in these times, the market forces advertisers to evaluate the effectiveness of their existing marketing programs and consider the alternatives. Realtors and brokerages are learning that they can advertise on multiple online sites for a fraction of the cost of a print ad, boosting sales and referrals. Case in point, last month, Alain Pinel Realtors, one of the Bay Area’s largest residential brokers, signed a one-year contract with us that will allow the brokerage to purchase banner advertising for the region.
Furthermore, the oft-quoted report from research and consulting company Borrell Associates found that online real estate advertising grew from a $1.2 billion market in 2004 to a $1.7 billion market in 2005, increasing in its share of ad spending from 10.3 percent to 14.7 percent. And the company projects online ad spending to grow to a $3.1 billion market by 2010.
This isn’t to say that all online real estate advertising is created equal. There are plenty of options that are as effective at reaching consumers as flinging a pile of business cards out your window. Online real estate sites now have a window of opportunity in which to prove to advertisers that every dollar spent provides a real monetary return.
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January 17th, 2008 at 9:30 pm
This is happening all over the world. Soon you will see boost in real estate business.
August 26th, 2008 at 10:15 pm
I’m not sure what’s being recommended in this article. The author seems to tease more effective means for advertising in a tighten-the-belt economy…but what are they?