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Real Estate News and Advice |
July 10, 2009 |
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 Make the Most of Your Advertising Dollars
by Blanche Evans
You've put a large display ad in the local homes magazine, but you don't know if anyone called. You put up a Web site, but it doesn't have many visitors. Yet the crummy two-line classified ad you ran in the local paper brought 60 people to an open house. It's baffling - why do some ads work and others don't? Unfortunately for you and this peculiar industry called residential real estate, it is more likely to be factors such as the home's attractiveness, your networking skills and the state of the market that really attracts the right buyer. But that hardly cuts the ice with your seller. They want a big show. They want to see your advertising dollars at work with their home in lights. A classified ad has none of the glamour they envision. A classified ad is small potatoes - it's something sellers see themselves being able to do when they're selling that old jalopy or giving away puppies. You, on the other hand, are expected to use your advertising expertise to "do something special" to market their home. So that leaves your advertising budget caught between a rock and a hard place. You have to spend money where it isn't as effective in order to please a seller who really doesn't understand what factors truly sell the home. Advertising is the one topic that all businesses, even advertising agencies, wish they understood. If ad execs knew what people would respond to, they would all be able to retire. There would be no need for focus groups, no need to launch new campaigns, no agency reviews while clients hunt for someone who can "do it better." Instead we would have a world where everyone has the answer. Ironically, it would be the same answer for every real estate client. The reality is that all kinds of media can be effective - you just have to know to work it. From Web sites to yard signs, how do you get the most bang for your buck? First, Qualify Your Consumer. Who Is It? If you were to work with an ad agency, one thing they can't tell you is which medium of advertising will be the most effective for you. So they take a targeted-yet-scattershot approach which will distribute your money in print (magazines, newspapers,)radio or TV, depending on your budget. All the money in the world won't bring in the right customer, so the ad agency will work very hard to determine just who will buy the product or service of the client and why. They research the demographics to groups of product users and then research which media appeals most strongly to those groups. They know how many whites, Latins, and blacks are likely to use the product, what ages are most likely to buy or use the product and which parts of the country and the world they are most likely to have the disposable income to buy or use the product. They ask these people why they buy or don't buy certain products and what they find out leads them to how to market the product or service and in what type of publications and media. You can do the same thing. Qualify your buyers and sellers with a demographic range. Who do you want to target your services to - first time buyers or luxury home buyers? Urban or suburbanites? Traditional families or singles? This will tell you who your customer is and that is who you want them to be. Break Media Down Into Manageable Bits After all the hard work of the ad agencies, you are left with a fact of life that you may have already known - that you'll do better buying an ad in media proven to be of interest to home buying and selling demographics. That's a targeted buyer and seller of the right age, income, and motivation. So, like the ad agencies, you can determine which forms of media are the most effective, and most of them are right under your nose. But where to start? According to the NAR's 1997 buying/selling survey, buyers say they first learned about the home they actually bought in the following percentages:
Although the NAR clearly didn't have advertising budgets in mind when compiling these statistics, they do suggest a course of action for brokers and agents to follow in terms of effective mediums in which to close sales. So let's do a little relative thinking. How well do these percentages relate to advertising dollars? If you were to budget your advertising according to these percentages, you would spend 50% of your advertising budget promoting yourself, 17% on yard signs, and only 8% percent on newspapers. Will those percentages work? Don't Take Every Statistic You See to Heart Not according to conflicting findings by other organizations and some brokers. Although they lack the empirical evidence of a survey, many brokers agree that the lowly yard sign brings in more revenue than all the "vanity" ads in the world. As few as 50% of calls to more than 83% of calls are generated by yard signs, according to some brokers. What does that mean? Buyers want to see homes, not an agent beauty pageant. So should you still spend most of your budget advertising on yourself? Probably not. According to the NAR's looking-more-outdated-by-the-minute survey, the Internet is in dead last place as the place buyers go to look for homes. But, again, powerful evidence exists to the contrary. Realtor.com, the NAR's own official Web site clearly begs to differ. Six million visitors a month come to the site to view 1.2 million homes over 130 times each. Other home search sites, such as HomeSeekers.com and HomeAdvisor.com, report less traffic than Realtor.com, but their stats are still impressive. Buyers and sellers are visiting multiple sites on the Internet. Obviously, the Internet is the place to advertise to buyers and sellers. Realty Times reported that the Newspaper Association of America(NAA) announced that "nearly 80 percent of those actively involved in buying a home had read a local, daily newspaper in the past week, and five out of six had read a Sunday newspaper in the past month." That's a powerful incentive to advertise in the paper, but is the following statement equally valid? According to the NAA, the study also found that newspaper editorial real estate sections are popular with home buyers. About 75 percent of homebuyers read real estate-related articles or editorials when searching for a home -- an additional 66 percent of subscribers even read real estate articles when they're not in the market for a new home. Naturally the Realty Times staff is thrilled, but does that mean you ought to rush out and buy a banner ad on our site? We wouldn't talk you out of it, but it wouldn't be in your best interest. (But it probably wouldn't hurt to get in on the free consumer newsletter or buy a spot on the Agent Locator service!) Okay, that was shameless, but irresistible. The point is, you can't place your faith solely in statistics - you need to also trust your own judgment and experience. You also need to be open to what works for your consumers. If your customers are reading the newspapers, then you need to be there. If they are using the Internet to shop for homes, then you need to learn how to advertise wisely on the Internet. If yard signs bring you more business, then you need to learn how to make the most of your signage. Track What Works So you're back to square one. Just like the ad agencies, you are going to conclude that you need a targeted/scattershot approach to advertising. Whether you like it or not, you will still have to advertise on the Internet, buy display and classified ads and spend money on signage. But remember, because of the nature of the targeted/scattershot approach, most ad agencies can never tell you which media was the most effective in bringing customers to your door. They can only take credit for the overall campaign, and the reason for this is not necessarily their fault. Media results are simply hard to track. A TV station and radio station can only tell you their broadcast range, they can't tell you how many people really tuned in to your ad. A newspaper can only tell you its circulation, it has no way of reporting how many people actually read your display ad or classified ad. The only media that is really capable of tracking viewership is the Internet. Web sites are equipped with software devices that tell them where a viewer came from (desktop, search engine, or link,) which pages they visited (reveals areas of interest) and how long they stayed (did they read every word?.) Some use address capturing devices that can tell them who the visitors are. These are unique visits. As yet, there is not a way to determine if unique visitors return again and again to a site, except through sign-in software, as provided by loan centers, Intranets, and other restricted access Web sites. So you don't know if the click-throughs to your site are from the same person or assorted individuals. You still have to know what is effective and what isn't. So, you are going to have to do something the ad agencies would also ask you to do - track your own advertising. No way around it. Gotta do it. Painless Ways to Track Advertising:
Incentify your staff with a reward for doing a great job if they truly prove helpful. Meet weekly to assess results. Ask staff to tell you about calls. How did the caller sound? What did they ask first? Did they get the information they needed right away? Turn the advertising campaign into a way to also assess customer service. Special note: If you include the Internet, please make sure that you or a staff member checks your email at least three times daily. The number one complaint of Internet buyers is agents who don't check their email. Statistically, buyers will select the first or second agent they come in contact with, or the first one to respond to their email or call. So check that email!
Part II - Making Advertising Pay Its Way Published: June 28, 1999 Use of this article without permission is a violation of federal copyright laws. 
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Part I of II - How to Choose and Track Which Ads Work
Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68.
