Ah, real estate. It used to be such a wonderfully profitable sweet spot for newspapers, back in the dear, now-dead days before the Web. And now it’s just a shadow of its former self.
The real estate business itself is doing OK these days, although it always has its ups and downs. It’s print real estate advertising in newspapers that’s been deeply and permanently disrupted.
The question I’m trying to answer these days is: Isn’t there another model through which local media companies can play key roles in the real estate market?
This year, local real estate advertising is projected to be a USD$5.6 billion a year business in the United States, down 6.7%, according to a recent Borrell Associates report. And the newspaper share of it is down to just 12.5%, while online/digital advertising is now at 53.4%.
The migration of real estate ad dollars from print to digital happened with shocking speed beginning in the late 1990s, along with automotive and recruitment advertising. The Big Three, as we called them back then, simply work much better online than in print.
It’s much easier to search, filter, and compare homes, cars, and jobs online than in print. And the ability to post scores of photos for each home and car makes online listings far superior to the little bitty images available in print. No wonder consumers quickly learned to take their home, car, and job searches to the Internet.
Now, almost 20 years later, the patterns of consumer behaviour are well established. Online searches, social media, and e-mail are fully habitual for most people. And, therefore, real estate agents and brokers have to spend the bulk of their advertising and marketing dollars in an attempt to be found in digital channels.
In the media business, we know this. But what are we really doing about it?
Early in the Web era, we created our own online listings platforms, hoping to win a meaningful share of the online traffic in the Big Three verticals.
Except for Cars.com, created by newspaper companies, that strategy has been a notable failure. With precious few exceptions, local media companies have not been able to compete in their local markets against the dominant online powerhouses in these verticals.
At Morris Communications, where I’m vice president of strategy and innovation, we’ve decided it’s time to step outside the old boxes and look for a new real estate business model.
To see where that business is, what solutions today’s agents and brokers are using, and where they need help, I decided to attend the giant National Association of Realtors conference in Orlando, Florida. I was accompanied by Michael Romaner, our executive vice president of digital.
The show included a full schedule of conference sessions. But for us, the best action was on the expo floor, where several hundred vendors were showing their products and solutions to agents and brokers.
How many agents and brokers? I heard one estimate of 20,000, and NAR has about one million members — hundreds in every mid-sized market in America. That’s one reason to believe we should be able to carve out a better business in that space.
Another reason is what we saw on the show floor. Imagine several hundred booths, the large majority of which were offering solutions designed to help agents and brokers win customers through digital channels, using digital solutions.
Such as what? We saw and talked to multiple providers in each of these categories: Web sites, mobile apps, customer relationship management (CRM) systems, lead generation programmes, social media marketing solutions, Web advertising tools, e-mail solutions, video tools, brokerage management platforms, digital signature services, and more.
If you’re in a local media company that’s taking good digital solutions to market, most of this is familiar. But the tools we saw were designed specifically for the real estate business, and the resulting differences in features and functions were significant.
One of the most crowded product categories was centered on various combinations of a public-facing agent Web site, with some sort of lead generation tool (“Enter your name, address, and e-mail address and get a free estimate of your home’s value!”), with a CRM system and marketing tools behind it.
The CRMs varied a lot in sophistication and price, but all provided tools to manage incoming leads and customer contacts. Some of the CRMs included marketing automation features, so agents could do e-mail “drip campaigns” to prospects and keep track of responses and interactions with each lead.
Between us, Michael and I talked to 60 to 80 vendors, in categories where it seemed we might be able to take these solutions to market in our local communities.
Some of these solutions looked very attractive. We could easily imagine a sophisticated digital real estate ad rep presenting them successfully to local agents and brokers. And very few of these companies have feet on the street in local markets, so that’s where we could fit in.
Many of the vendors have designed their products as DIY (do-it-yourself) solutions for agents and brokers — tools they could adopt and use via the Web without much help from the vendors. But the vendors admitted that most agents and brokers are slow to adopt these digital solutions. They don’t want to spend the time it takes to learn and constantly manage digital marketing, CRMs, and effective social media tactics.
That was another promising sign. If we took the right solutions to our local agents and brokers, offering options of “do it yourself,” “do it with me,” or “do it for me,” it seems very likely we could help reluctant agents and brokers do what they know they need to do to win in the digital space.
In the last five years or so, many local media companies have done their best to create or become digital advertising and marketing agencies for small and medium businesses in their markets. I described an advanced version of that model in an earlier post. And we’re doing something similar in recruitment at Morris, as described in this post.
It turns out the real estate business calls for the same approach. Our real estate reps would need to be digital real estate specialists, equipped with a suite of the best available real estate solutions, mostly provided through vendor relationships.
We could combine these with SEM, SEO, programmatic display, and other digital advertising and marketing solutions we already have. And we would need solutions and packages agents could afford, as well as solutions designed for larger brokerages.
Can we do this? I’m confident we can.
And, if we want to have a future in a world where virtually all advertising and marketing is digital, this is exactly what we need to be doing. The digital solutions will be coming to our markets non-stop. We can either be the ones who bring them, or we can watch our revenues fade away.