As the property market has awoken in the past year from its enforced slumber brought on by the Global Financial Crisis and the consequential recession, the attitudes and practices of the real estate profession has changed.
One of the noticeable changes is the attitude-to; and usage-of media for advertising property. Heading into the downturn in 2007 the usage of the web by home shoppers was in relative terms, already high – the annual Nielsen survey at that time found that over 70% of active home shoppers judged that the specialist real estate websites of Realestate.co.nz, Trade Me Property and AllRealestate (no longer in business) were the number one choice for home shoppers when looking for property information especially over the past 7 days.
At that time based on industry analysis, the total industry spent around $125 million per year on all forms of advertising. Despite the dominance of online searching for property the amount spent online only represented just under $7 million, a mere 5% of the total industry spend. The lions share going to the print media – newspaper property supplements and specialist property magazines.
Now fast forward 5 years and the question is; have things changed?
Not surprisingly the active home shoppers judge even more highly the value of online search, now encompassing both the web and the mobile platform – that 70% figure above, has pushed out above 80+%. Most significantly though the attitude and behaviour of agents has changed. They are now using and valuing the web as an advertising medium not just as a classified listings site.
A noticeable change driving this, is the engagement the agents are having with statistics. Whereas 5 years ago agents would only (and in some people’s view “could only”) judge interest in property by how many phone calls they had had or how many people visited the open home; nowadays there would be many more active agents who quote the daily and weekly visitor traffic to each listing as well as analysing the make up such traffic, as to geographical source as is detailed on the realestate.co.nz website.
Such data was never, and will never be available for print media. The ads on the page generate awareness but have no tracking mechanism as to their value in generating interest or enquiry. Nowadays it is common to see vendors as clients are keeping a close watch on such stats and tracking them themselves as discussing them with the agent.
Recognising this growing focus on performance of advertising is driving a rapid uptake of online premium property advertising. From barely 5%, 5 years ago the representation of online advertising has already grown to around 12% of the total industry spend on advertising. That still means print media amounts to over $90m as compared to online at just $13m. It is very likely that expenditure online for real estate will grow significantly faster in the next 5 years to exceed 25% and power on towards 40% – the current level seen in Australia. That would see a diversion of some $35m flow from print media to the online world.
The proof of this hypothesis and analysis can be seen in all of the Featured and Showcased properties on the website at this time – vendors recognise the value in being more visible to ensure that they provide the best professional marketing to their clients. A great recent example of the effectiveness of online premium advertising is live on the site at this time. An almost perfect case study of 2 nearly identical brand new homes marketed on the same day by the same agent in the same suburb – one with premium advertising and one without.