I did a little legal spying to find out what the real estate industry is saying about newspaper advertising. The results were distressing.
"For the first time ever, according to the National Association of Realtors, more American home purchasers used the Internet as a key information source than used newspaper advertisements," says an article in Realty Times, which bills itself as the "Internet's largest independent real estate news service."
The Aug. 21 article, written by columnist Kenneth R. Harvey, adds: "Fully two-thirds of all recent home purchasers in the first half of this year used the Internet to search for their home versus just 49 percent of buyers who reported using traditional newspaper ads."
Another article on Realty Times Web site, this one written Aug. 15 by associate editor Blanche Evans, talks about the rebound of Realtor.com.
Realtor.com had been considered a casualty of the dot-bomb crisis of 2001-2002. The stock of its parent company, Homestore, was de-listed by NASDAQ, about half Realtor.com's staff was laid off, some of Realtor.com's bills weren't getting paid on time, etc.
On Aug. 12, Homestore's stock rearched a "year-long high following the incredible run-up of its stock shares on … closing with a whopping 46 percent increase to $2.62 per share."
Evans reported that Realtor.com posts 2.1 million listings from 880 multiple listings services (MLSs), and drew over 15 million page views per day.
"That makes it the single greatest source of real estate classified ads that there is," Evans wrote.
Newspaper executives also should note this statement from Evans' article:
"Realtor.com's goal is to beat newspapers at their old game - to become the only advertising medium of choice for Realtors at the local level for listings and personal agent marketing."
Evans also wrote, "In most markets, there is only one newspaper or leading newspapers, and most have done poorly at embracing the Internet to extend their services. That's a tremendous plus for Realtor.com, except for a small problem. The fact that the newspaper is the only print game in town makes it very attractive to Realtors, who have shown no signs of curbing their spending on newspapers…
"The irony of this is that some Realtors don't want to pay the high cost of print, but they do - to please sellers, and because it is easy… "Unlike the local newspaper, Realtor.com isn't the only game in town, and it competes with a variety of business models that not only confuse Realtors, but dice their advertising budgets in more pieces…. The sheer variety of advertising opportunities through directories, search engine placement companies, portal advertising, banner ads and more is exhausting to sort through, and the more choices there are, the less likely Realtors are to be loyal."
"Realtor.com's future is to overcome a formidable task - to convince agents (and sellers) that their addiction to print can be cured with a patch, and that the clear choice for advertising listings online is Realtor.com," Evans wrote.
My take on real estate advertising is this:
Buyers depend more and more on the Internet; the major trade association for the real estate business is overtly trying to encourage its members to move from print advertising; sellers and (especially older) agents remain loyal to print; there is lots of competition and confusion in the online advertising field; and newspapers who produce a combination of strong print and online products can win this battle.
Technology is available to newspapers (through TownNew.com or other vendors) that is as good as any product on the market. However, many newspapers don't have strong relationships with their local MLSs or boards of Realtors. Without data (listings), the technology founders.
Newspaper success with online real estate products has been limited by two main factors:
1. Indifference, inability or unwillingness on the part of the newspapers to do what it takes to create online real estate market places.
2. MLS and realty boards - under the influence of the National Association of Realtors - typically want to reduce the newspapers' dominant position in real estate advertising. These groups often fight to prevent newspapers from gaining access to real estate listings.
To win this battle, newspapers will need to work much harder or see a major portion of its advertising revenue erode away.