As most media companies know, the real estate advertising industry is largely local. Earlier this year, Borrell Associates predicted that real estate agents would spend about $21.8 billion on advertising in 2011, an 8% increase over last year. Attendees at the Local Mobile Advertising Conference, hosted by Borrell Associates in Chicago this week, heard that 44% of a typical realtor’s ad budget is spent online. And now, the spending is going mobile, a trend that could pose a challenge for media companies that haven’t yet entered the mobile fray.
Several digital real estate media company representatives explained to their strategies to audience members and described opportunities that are available for traditional media concerns. In a brief overview of the market, Scott Dixon of Network Communications said that about 5 million residential homes will be sold this year. A prospective home buyer spends about 12 weeks looking for a property. During this time period, these buyers are hyper-vigilant about their search. And these days, the search is often taking place through mobile devices. Zillow’s Greg Schwartz said that on a typical weekend, 30% of their traffic comes from mobile devices and on sunny days, that statistic jumps to 40%.
For realtors, marketing is all about raising their profile in their community as well as to show home owners that they are actively promoting their listings. Several pure play real estate marketing services firms, including Zillow and Trulia, use a pricing model that charges a realtor about $250 a month, or $2,500 annually, to list a property with them. When the mobile platform is used, the service providers must deliver an optimal experience. For end consumers, that means presenting quickly loading images, easy to find contact information and uncluttered displays. For realtors, the advertising experience, whether it’s mobile, digital or traditional, is all about leads – and how many calls they receive.
Some of these pure play companies, like Zillow, are partnering with traditional media companies. The company provides its app at no cost to the media firm. The sales reps are then challenged to sell display ads on Zillow’s mobile site and the ad revenues are shared between the media company and Zillow.
The advantage the media companies have is their connection with real estate agents in the local market. While the reps may have been selling print ads in the local daily or weekly publication, they can now partner with an online firm that has the technological challenges worked out and sell mobile advertising. For many sales reps, a bit of training to understand the world of mobile advertising will be in order. Once the expertise is developed, companies like Zillow believe the sky is the limit with respect to product innovation as they partner with local media companies to sell mobile solutions to real estate agents.