Local to National, Traditional to Digital: Advertising Trends

The Real Estate Industry has been largely focused on local advertising, using more traditional means like radio advertising, snail mail flyers, door to door brochures, and even local television commercials. Establishing local prowess and credibility is paramount to a real estate professional’s success. 

But will the recent shift in advertising trends for small to medium businesses in America give real estate professionals something new to consider?

I was interested to read a post from Dan McCarthy’s ViralHousingFix, detailing two recent studies done by BIA/The Kelsey Group.  It seems  advertising trends are moving away from local and going mainstream; this trend is most obvious between the years 2008 and 2009. BIA/The Kelsey Group demonstrates that for small to medium-sized businesses (SMB’s) a shift in advertising is occurring.

Certainly what economists are referring to as the Great Recession in 2008-2009 impacted the amount of money spent on advertising. Yet, even with this taken in consideration, research reveals two interesting shifts:

1. Less local advertising;
2. Less traditional advertising channels and more digital advertising.

BIA/Kelsey’s U.S. Local Media Forecast, released earlier this year, reported a sharp decline in local advertising spend in 2009 and 2010.  BIA/Kelsey does not project an immediate recovery for the local market. 

The question remains, if local advertising is so important to small and medium business, why when budgets are tightest, would they looks to spend their precious advertising dollars outside the local marketplace?

Based on the graph to the left, roughly $27 billion of local advertising dissolved during the recession. With this type of major shift, Polachek, president of BIA/Kelsey says this reveals that a fundamental secular shift is underway.

“The general economic conditions worsened during 2009 causing advertising dollars to remain on the sidelines as businesses — large and small, local, regional and national — reined in spending levels,” said Polachek. “Even with improvements in the overall economy, we do not anticipate a rapid recovery among traditional media over the forecast period, because we believe the structural change in the local media industry has accelerated.”

BIA/Kelsey’s identified the second interesting advertising trend in its Local Commerce Monitor , a local tracking study that the firm has been doing over the past several years. This study noted a shift in advertsing spending by SMBs. Instead of sticking to traditional media, small to medium businesses opted for lower-cost digital/online media.

To quote McMarthy’s recent article, “SMBs decreased spending on advertising and promotion by 23.5 percent, from $2,734 annually (reported in August 2008) to $2,092 annually (reported in August 2009). In spite of the overall decrease in spending on advertising and promotion over the past 12 months, on average, SMBs increased spending on websites and profile pages by 26.8 percent, from $608 in 2008 to $769 in 2009.”

Kelsey Group graphed this notable shift among SMBs (see below). This graph shows that from 2007-2009 SMBs use more digital media than traditional media.

In lieu of these trends, real estate agents, brokers and MLSs, watching their advertising dollars may want to consider the widespread advertising opportunities of digital advertising. Certainly this strategy is more cost effective. 

I would add, as most home buyers and home seller shift in online research, that local marketing for the real estate industry should also take their advertising online. Positioning your services in front of your audience is the key to increasing ROI (return on investment) for your business.

Digital advertising is the newest trend. 

It’s more than jumping on a band wagon; it’s making sure you don’t get left behind.

To read Dan McCarthy’s related post, click here. 

To learn more about BIA/The Kelsey Group, click here.

To learn about online advertising opportunities specifically for positioning real estate services in front of their target audience, click here.

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