A few months ago I wrote a blog post on the dramatic shift in real estate classified ad revenues away from newspapers. We all knew it was coming and getting worse for print media. Last week the Q2 figures were published, which shows an even more challenging view; I thought I’d take a look at what’s going on in real estate.
Here’s the summary:
• Total print ads in Q2 were down 16% year-over-year
• Online ads came to only $777M in Q2, down 2.4% from the year before
• Real Estate Classified ads were down 36% over the prior year
WOW! That’s a pretty incredible drop in overall advertising revenue for the newspaper industry.
Let’s look at the real estate classified portion, the bit that I’m most interested in. Revenues here have halved in two years and it is not clear that there is a light at the end of this tunnel.
The dramatic change is seen in the chart below.
At Trulia, we believe a good portion of this expenditure will transition to online advertising products (from our perspective that’s Trulia Pro, Trulia Ads and Trulia Ad Network) but some of it will just evaporate as it is free to get exposure for listings on many large online real estate sites, including Trulia.com.
Sure, not everyone is smiling, but we think this is great news for the real estate industry and consumers. Removing costs and shifting ad spend to more efficient means will help brokers and agents build profitable businesses and also benefit home buyers and sellers as it helps take unnecessary costs out of the process. It is fascinating to watch the Industry change so quickly before our eyes.
Have you shifted your spending during the past 12-months? Share your stories in the comments; we’d love to hear them!
Update: I was interested in the changes in automotive and recruitment. You can see them here on my personal blog.
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October 2nd, 2008 at 8:14 pm
More and more real estate professionals advertising budget will move towards the Internet. I haven’t spent a dime on off line advertising in over 2 years as I direct all my efforts on line! The Internet is where the consumers are searching and that’s where real estate industry professionals need to be!
March 15th, 2009 at 11:52 pm
I’ve been in Real Estate for 25 years and have done tons of “out of the box” and “grass roots” marketing. I’ve done everything from door to door hangers and used companies such as http://www.carvehiclemagnets.com
custom car magnets.
June 9th, 2009 at 12:42 am
I own a national classified ad placement agency and have been in the newspaper industry for 19 years. It is true that trends are not at all good for print, but I must say that I blame a lot of the decline of print ad sales on the newspapers themselves, not just the internet as they would like everyone to believe.
As advertising revenue started to fall, many daily papers across the country have forced customers to pay inflated rates to cover their print product and their forced online buy. As a result, many of the ads aren’t as cost-effective as they once were. Higher ad rates and more competition from the internet is not a good combination, but publishers do not seem to get it!
At some point in time, I would like to think that the newspapers will realize that the best way to compete with the internet is to lower their rates and find a new price point. Possibly even offering their online classifieds as a low or no-cost bonus.
In general, I find that the problems with the print industry are focused more on the medium to large daily papers. The smaller community papers and shoppers across the country have been steady performers all along. Let’s hope the larger newspapers wise up and get competitive before they’re obsolete.