Thanks to Internet Data Exchange (IDX,) broker permission-based consumer access to MLS listings, consumers can access MLS databases that are roughly 15 times more comprehensive than newspaper or homes magazines classifieds or display ads. This is dramatically changing the balance of power between advertising mediums and advertisers, says a new report by Borrell Associates, Inc.

"The 2004 Update: Online Real Estate Advertising Comes Of Age" is a special report written for Suburban Newspapers of America, and is offered for sale to non-subscribers. Among its findings:

• In 1996, agents and brokers and developers spent $755 on newspaper advertising for every home sold. This year, they are spending $605 per home.

• For the same period, online ad spending per home went from $14 to $148.

• Newspapers and homes magazines controlled 70 percent of all real estate ad spending in nthe mid-1990s. But newspaper market share erosion has been masked by record home sales, rate hikes and inflation, and hasn't kept pace with housing sales. This year alone, newspapers may lose as much as two points of share.

• For total unique visitors, according to Media Metrix in July 2004, brokerage firms hold nine out of the top twenty spots on the Internet.

• IDX has opened the door to individual promotion of listings that has affected "how agents and brokers spend their advertising dollars," which has caused the newspaper industry to sit up and take notice.

• It has also affected the way MLSs operate. After surveying 30 of the top MLS executives in the country, representing 18 percent of 2.1 million MLS listings in the U.S., Borrell Associates found that MLSs have shifted from publishing listings data to facilitating the delivery of listings electronically to brokers' and agents' Websites.

• Fifty-three percent of MLSs make listings available directly to the public.

• Ninety-seven percent of MLSs provide listings to Realtor.com, while only 27 percent provide them to local newspapers.

• Less than 17 percent of MLSs receive money for listings anymore.

• Nearly $11.5 billion will be spent this year by real estate advertisers to reach home buyers, sellers, and apartment renters, down from 2003. About 11.2 percent will be spent online, while about 40 percent will be captured by newspapers.

• While newspapers will lose an estimated 6.1 percent of print real estate revenue, they'll make up 43 percent of the loss with online operations.

• Newspapers derive 94 percent of their online revenues from listings or listing enhancements, but the trend in online real estae advertising is away from the paid listings business, and toward lead-generation and paid search.

• The greatest competitors to newspapers online, say general managers surveyed, are the newspapers' own customers (agents and brokers) and Realtor.com.

Peter Conti, Jr., author of the report and spokesperson for Borrelll Associates, Inc. says, "What we are finding is that for the ad dollars spent for new homes and existing, newspapers are losing share. Everyone is targeting them. Agents and brokers are moving towards spending online. They have the listings now on their sites so they don't need newspapers for listings, and classifieds become less important to agents. But the brokers are looking for image advertising to pump up their brand, and they can still do that in print. The brokers are paying less for print classifieds, but they are buying more display ads, so they aren't taking dollars away yet."

But it may not be enough to mke up the difference in the shift. "Just weighing the cost of exposure, print has fallen victim to 'disruptive technology,'" explains Conti. "As with the Help Wanted ads in the newspapers, the production and delivery can't match the efficiency and delivery of the Internet, so Help Wanteds dropped from $8.7 billion in revenues to less than 4 billion in less than three years, due to undercutting of price and features. Real estate is about $6 1/2 billion; it's in the middle phase of disruptive technology."

The three phases of disruptive technology is early: when adoption is in its peak period; middle: when disruptive technology nibbles at growth, but the traditional form still grows; and late: when the adoption rate declines rapidly.

"As inventory has increased," he explains, "existing and new homes sold at record highs and that has masked some of the decline for the newspapers."

The Internet ranks number two only behind the yard sign in reaching homebuying consumers, and 3/4 of the public use the Internet in their home search, so Realtors don't need newspapers to expose their listings.

"Traditionally, newspapers have focused on how to aggregrate listings on their sites," says Conti, "but now the balance of power has shifted, and agents and brokers aren't interested in giving listings to newspapers. So newspapers have to do something new. Lead generation is in the pure online world, and companies are finding that lead generation is more important than banner ads and tradtional types of advertising. Ninety-four percent of online revenues are from listing enhancements or online display ads, but the growth trend is toward paid search.

"Housevalues generated $20 million in lead generation programs, and $88 million for Homestore and none of it is from listings," Conti continues. "Newspaapers need to start shifting to that. A variety of things work - in print, the biggest opportunity is in image advertising. Most brokers are focusing on selling their brand, so the newspapers have to help promote the agents' and brokers' sites."