The question was posed on this blog earlier this year as to the future of newspaper advertising for the real estate industry. Well the facts seem to be piling up especially given the latest information from the US released this week.
In the 2nd quarter total US newspaper advertising by real estate companies was down 36% on the same time last year as seen from the graph below. The figures compiled in the blog post by Trulia CEO Pete Flint shows that whereas in the first half of 2007 close on US$2billion was spent advertising real estate in newspapers the same period of 2008 saw just US$1.2billion.
As he points out this is good news for the real estate industry and the consumer, providing as it does a means for the industry to operate more effectively leveraging the greater reach and efficiency of the web to provide a far more cost effective advertising medium for property.
In NZ it is clear that media companies are concerned about declining ad revenue – the recent news of job losses must have been influenced in part by declining ad revenue. Added to this was recent statistics released by Nielsen Online in July showing that when it comes to real estate information online newspapers are loosing relevance. The online survey undertaken in May and June asked respondents how useful they rated differing forms of media for real estate research – specialist real estate website such as realestate.co.nz where rated as useful or very useful by 93% of respondents, by comparison metropolitan newspapers were similarly rated by only 48% of respondents, falling behind real estate office window displays and for-sale signs which were rated by 53% and 54% respectively.
Whilst the benefits of this more efficient and cost effective medium should benefit the consumer, it is concerning that whilst media companies so dominate the market place, the loss of business in print has driven dramatic price increases in online advertising.
Examine for a moment the cost of a property listing on trade me. Just over 2 years ago a listing cost $49, in intervening period the cost has increased through $99 and $149 to the current price of $199 – a 300% increase! all adding to the recent profit result of $70 million from the website. By comparison this website of realestate.co.nz which is owned by the real estate industry has not altered its fees to the industry at $200 per office per month for an unlimited number of listings since it launched in August 2006.
I think this is a valid concern. I know my local paper offers a free online advertisement that lasts for 30 days. One has to wonder how long it will be before there are no more home ads in newspapers at all.
I am not sure where I read it but about 2 months ago the New York Times cut its weekly real estate publication which cut 140 odd jobs. This was contributed to the online presence for advertising real estate.
In New Plymouth the Daily News is now offered online which has cut the paper delivery on the print by 20%. This means that the blueprint that we put in on saturdays has dropped from a readership of 76,000 to approx 69,000.
But on the other side of this it is also now costing slightly more to send less as well.
Will be interesting to see how the Print media take on the impact of the net for compition and ease of reproduction.