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Newspapers - A Dead Advertising Medium?

I've read and participated in many a debate (friendly of course) with colleagues, both online and in person, about the usefulness of the local newspaper for advertising a seller's home in today's market in 2009. 

While there are valid points to be made on both sides, my personal opinion is that advertising in the local paper is a complete waste of time and money if a listing agent's goal is to:

"Sell the home for which the ad is being placed."

I would love to see a large-scale research study, that is conducted by a reputable, independent research company where hundreds of thousands (heck, millions, with the number of homes on the market over the past few years) properties are advertised in the local paper (whether a large paper like The Washington Post or even mid-sized markets like we have for The Plain Dealer here in Cleveland) and see how many buyers actually purchased their home from an ad placed in the newspaper.

Any experienced agent knows that the probability of selling a given seller's home from running one or more advertisements in the local paper is like winning the lottery.  If a listing agent has a TON of inventory, they may start working with buyers who first contact the listing agent via a newspaper ad, and end up buying another home that the listing agent has for sale, but this scenario will be described in further detail later.

Think about it:  if it were truly this easy, a home seller would not need a real estate agent.  The home seller could place an ad directly (and many for sale by owners in fact do), and it sells for market value, closes, and the seller is happy, wouldn't everyone be doing it?

The three main reasons real estate brokerages and individual agents place an advertisement for a seller's  home in the local newspaper is:

1. Brand the Real Estate Company.  This is "branding", plain and simple.  It's done across just about every industry in one form or another.  Is this a valuable technique for the company itself?  Absolutely, otherwise, they would not be doing it.  It's the cost of doing business to get business.  But a home seller is paying for this, indirectly.  If you see ABC Realty's ad every Sunday in the paper, the company is achieving brand awareness.  Which is why the Nike logo and Coca Cola are seared into your brain probably even more so than an old family photograph of your great grandfather Uncle Ernie (rest his soul).  It's called "top of mind awareness" and companies and agents are fighting for mindshare in your brain.  They want to be #1 or at worst #2 in your head when it comes to real estate.
   
2. Brand the Individual Agent.  Same concept as #1 except it's at the agent level, not the company.
   
3. Generate New Clients for the Agent.  It's a well-known insider secret that agents obtain new clients from advertisement, both buyers and sellers.

Is there anything wrong with the above three reasons agents advertise in the local paper?  Absolutely not.  My approach is to level with seller clients, informing them the main beneficiary of this newspaper advertising is me, not them.  Even sellers who have heard of a personal success story via this mechanism agree the likelihood is slim to none.  If that's the case, why would sellers expect newspaper advertising?  Several reasons:

• Old habits don't disappear easily.  The simple fact is many real estate companies and agents are reluctant to change, for fear of alienating sellers or losing business - a dicey proposition in the real estate market of today.
  
• Most sellers think this technique works.  Sellers oftentimes think you aren't doing much if you aren't having open houses, as the agent down the street holds my neighbors home open all the time.
  
• It is the main, visible and tangible thing that sellers can touch and feel.  Somehow, many sellers feel that if you are strictly marketing their home on the Internet, and they don't have a very detailed understanding of what we can do on the Internet, that somehow this is inferior to traditional, print advertising.  I think we as agents need to do a much better job both exploiting the online medium and also explaining the ins and outs of the benefits as well.

Don't get me wrong, I am not knocking agents who spend money advertising homes in the local newspaper, as I'm sure, at some level, it works for them to obtain new business.

What is obviously missing here is any kind of objectivity and proven, outside, verifiable results that can directly show a correlation.  Think about it: I know the logistics would be difficult, but it wouldn't be that hard to track, nationally, if a buyer purchased a specific home and found that home through the ad in the local paper.  Since that isn't likely to happen, your opinion is as completely valid as mine.

Happy advertising!

Content and photo copyrighted by Chris Olsen and protected by CopyScape.

Date: Monday, March, 23rd 2009 @ 08:14:16 PM
Views: 590

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