by maladiets

There’s no doubt it’s a bad time to be in the newspapers classifieds business. They’re probably wishing they could back in time too. Revenues are down – with real estate classifieds advertising being hit especially hard. Mega publisher McClatchy is down 29.4% in real-estate classifieds revenue. Likewise, Gannett’s real estate classifieds revenues are down 13.5%. Not a pretty picture.

Advertising dollars are slowly and surely fleeing print. A recent report from Borrell sums up this flight.

“There are less homes being sold, but at the same time advertisers and real estate brokers are looking for the most effective use of their dollars. And everybody agrees that the most efficient means is online.”

I think the flight is not just a flight from print advertising however. I think it’s symptomatic of a larger move away from the sort of fire-and-forget advertising done so much in the past, that just doesn’t work in a Web 2.0 world.

Carson Coots, writing at agentgenius.com, sums it up this way.

The funny thing is, effective online marketing in real estate doesn’t involve spending money on ads as much as it involves spending valuable time.

Carson is right. And if you look deeper into the report you find that spending on online ad is only 16.7 percent of total Internet marketing budgets. That number is only poised to grow to 17.3 percent in 2009. That’s less than one percent growth! The real bulk of online spending will continue to be in web site design, communications and database services.

So if the future growth isn’t really just more advertising options online, what is it?

At NAR, I sat on a panel in front of a group of newspaper execs who were trying to figure this all out. I suggested that simply adding new ad products into the mix (see Zillow and the Newspapers Sitting in a Tree) won’t solve their woes.

I proposed they needed to radically change their focus away from product-based mentality towards a new platform-based approach.

Real estate professionals these days are looking for marketing partners, not sales people, and the smartest thing for the newspapers to do would be to ape some of the models being pushed forward by the Real Estate 2.0 crowd and give agents a unified local real estate marketing platform. Here’s a few ideas how they could do this:

Providing the Platform

Leverage existing publishing infrastructure to provide agents/brokers with a web presence, but free the database from the design so it is totally customizable (Ubertor) and retain a unique top level URL and easily create single property web sites (RealBird). Agents have complete control of their presentation of these sites but traffic can easily be fed both directions. Make the data exportable so if the agent wants/needs to leave they can.

With control of the source of the listing data, it can then be pulled back to enhance the mothership’s search results. There is an opportunity to up-sell featured listings (Trulia) or even premium placement for the agent’s sites on search results (Zillow). Don’t get greedy either – help agents get these listings elsewhere on the ‘Net too (Point2NLS, vFlyer).

Give the agents a blogging platform (Move.com, ActiveRain) and allow the content to be rolled up into a hyperlocal information source (Outside.In, Localism, YourStreet). Bonus – you can use this approach to find talented writers that can build out into group blogs (RainCityGuide, BloodhoundBlog), e.g. the PI’s Seattle Real Estate Professionals.

Packaging the Right Tools

Give agents the tools they want to get video tours of their properties and connect the agents with the producers (RealEstateShows, WellcomeMat) but don’t confine the distribution to your site – following the listing model, help the agents syndicate those videos out across the web (TubeMogul).

Promoting the Brand

The package should include various levels of self-service advertising network (with CPM, CPC advertising options) – with options to centralize ad buys on other sites as well. The package could also include placement inside an enhanced local service provider directory (MerchantCircle) in the real estate section. And it should give the Realtor the tools they need to manage their online reputations on other local directory destinations (CitySearch, Yelp, etc.) as well.

With this approach, brokers and agents ultimately would benefit from the one-stop-shop for all their marketing needs as well as playing off the paper’s still resilient brand with local real estate consumers.

If they can see this opportunity, the papers are the only ones that (for now) have the local market penetration to pull something like this off. And at each of the step, there are clear and obvious ways that the newspapers could monetize this – far beyond selling simple classifieds ads.

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Newspapers ad spending is still strong, but for how much longer?

According to the NAA’s print classified ads breakdown, real estate ads jumped 18.5 percent to $1.2 billion.

While print still has a stranglehold on most local advertising dollars – I suspect it won’t for very much longer. Traffic to online classifieds web sites is booming right now, according to new report from Comscore. Over 37.4 million internet users visited an online classified site in the past year. It should be no surprise to anyone then that real estate classifieds are moving online.

Craigslist is the uncontested category killer, but Oodle was a surprising ninth place finisher with a startling 463% growth figure. edgeio, another of the new crop of classifieds sites, is nowhere to be found however.

In any case, getting your listing onto any of the sites is great marketing exposure for your listing. Remember, you can also use postlets to help you submit your ad to these and many more sites.

More Reading:

The Real Estate Tomato: 13 Ways To Post Your Listings For Free

sellsius° real estate blog » New York Real Estate Listing Sites

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Realty Times is reporting from a joint survey with Classified Intelligence, that US Realtors are still buying print advertising, but most would prefer not to. According to RT, the Internet has also made marketing more expensive for Realtors as it has added another arena in which they must advertise. The main reason for the shift towards online advertising:

“the lion’s share of advertising will follow the audience, and the audience is online.”

I suppose this bodes well for the Trulias and Zillows of the world, despite my earlier protestations to the contrary.

You can download an executive summary of the report here.

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