The world is very different than it was 10, 20, 30 years ago. Businesses used to pour money into print advertising and marketing with few ways to determine exact reporting, ROI or the ability to effectively A/B test. That has changed drastically in the last decade with the emergence of online advertising. With innovative and advanced ways to constantly report and shift messaging to better reflect consumers’ needs, it’s no wonder most industries reallocated their marketing budgets almost exclusively to web. However, in the case of real estate, the shift to web has been much slower because historically, the industry hasn’t been forced to adapt and innovate like others have, despite the growing presence of tech-driven companies like ours and many others.
Today in the United States, only 1% of homebuyers find their homes via print advertising, while 50% find their homes via the internet. That statistic alone begs the question: Why are brokerages still spending precious advertising dollars on print?
Running ads across multiple channels is key to every great marketing strategy, but some (who perhaps have grown too attached to print advertising) are allocating unhealthy percentages of their budgets to that channel. Here’s why I believe that can be an issue:
1. Margin pressure: Brokerages’ margins are under immense pressure. To add perspective, the average retained commission by a brokerage today is half of what it was decades ago — as recently as 2012, the retained company dollar nationally was at 22.4%, while today it sits at a mere 14.8%. Putting precious funds into print advertising means more likely than not they will see no tangible ROI. Any wasted marketing expenses like these only contribute further to margin pressure.
2. Generational gaps: Brokerage owners and their agents demographically are more than likely a generation ahead of the customers they most want to reach. Most brokerage owners and agents look through their own lenses, and for them, print is still relevant. But millennials now make up the largest homebuying audience out there, and they are predisposed to digital (even less impacted by print than the generation prior and more impacted by digital).
Brokerage owners and agents can’t use their own sense of how important print is; they must look at the data for where most millennials are spending their time and where they are most likely to look in their home search.
3. Measurement: One of the key reasons why digital marketing of all types in all industries has become so dominant is because, unlike print, it’s highly measurable and therefore very efficient and very quickly refined. You can iterate quickly and easily, come up with faster and better A/B test results, and more. With print, you’re almost never able to get accurate measurement and you’re not able to adjust quickly.
Where Print Is Still Highly Valuable
If digital advertising is all about direct response, then print is primarily about branding. Even as CEO of a company that provides digital marketing, I acknowledge that print is still very powerful in a specific context, and that is any person-to-person setting. That could be an agent sitting in front of customers with a beautifully printed listing presentation for luxury home. Or the business cards agents are constantly handing out and leading at homes. Or holiday cards or even handwritten thank you notes.
All of these things are still expensive and hard to measure, but at that point it’s not about direct response, nor should it be. At that point, it’s all about a branding and leaving that lasting impression.
How Going Digital Will Help
As I mentioned above, real estate was largely able to slide on by when the digital age first came around, mainly because it is a relationship business, so consumers have been tolerant of the lack of technology. Now, there’s a fine line between enough innovative technology and too much. Since real estate is a relationship business, replacing agents with AI and other advanced technology won’t work, just like replacing the doctor with AI wouldn’t work. However, we can automate everything else so that the agents can concentrate their time and energy into the relationships and transaction expertise.
My advice is to start slow. A little goes a long way, and too much complexity at once will cause agents to get frustrated and stop using the technology that your brokerage is providing.
When it comes to picking out your tools and services for digital marketing, make sure you are weighing your options, doing the research needed and speaking to multiple vendors. The tools and services you choose need to be able to integrate with your existing technology deck, to further automate your agents’ busy, day-to-day work so they have more time to focus on their clients.
The Bottom Line
Over the next five years, the Borrell Associates’ “2019 Real Estate Advertising Outlook” report projects healthy increases in annual ad spending, rising to $41.4 billion by 2024 with online media accounting for nearly 77% of all spending. There is no increase predicted for print and broadcast media, which should speak volumes to brokerages’ 2020 allocation of budgets.
I advise brokers to do all of their lead-generation and nurturing digitally and apply their precious print dollars where they’re really going to matter most, which is making real estate agents look great face-to-face so that they’re unforgettable to their clients and prospects after the fact.