With house-selling season upon us and Century 21, after a two-year hiatus, poised to advertise on TV again -- during the Super Bowl, no less -- it begs the question: Is real-estate advertising back?
Century 21 Is Returning to TV, but Real-Estate Ads Aren't Springing Back Yet
Don't get too excited.
Marketing spending seems ready for a slow slog back to normal levels after a four-year plunge brought on by one of the biggest housing busts in the nation's history, analysts and industry insiders told Ad Age. "There's not a boost in ad spending coming in our industry right now. Nobody sees any results yet that advertising creates more sales," said Steve Murray, editor of a leading industry newsletter called Real Trends. "They have to do some to stay competitive, but that's it."
Measured media spending by real-estate companies, home builders and related firms dropped from $3.1 billion in 2006 to $968 million in 2009, before ticking up slightly to $1 billion last year, according to estimates from Kantar Media. (The figures don't account for companies moving money from traditional advertising to digital ventures.)
Spending won't likely fully return until the market picks up steam again. And so far the recovery has been uneven, with mixed messages coming from forecasters. "We may not see notable gains in existing-home sales in the near term, but they're expected to rise 5% to 10% this year with economic recovery, job creation and excellent affordability conditions," Lawrence Yun, chief economist for the National Association of Realtors, said in a statement last week.
Financial tech firm MacroMarkets gave a more bearish assessment, citing its survey of more than 100 economists and market experts who predicted only a weak recovery for home prices -- and not until 2013.
"This uninspiring view must be influenced by the persistently weak market fundamentals -- high unemployment, supply overhang, an unbalanced foreclosure crisis and constrained mortgage credit," MacroMarkets chief economist Robert Shiller said in a statement.
With uncertainty lingering over the spring season, real-estate companies are unleashing ad campaigns showcasing agents who can guide buyers through potential pitfalls. Consider Coldwell Banker, whose ads by independent agency McKinney of North Carolina dramatize the hidden dangers of buying. The spots include scenes of one home sinking and another so close to a runway that a speeding jet nearly clips the chimney. The kicker: "If the wrong house was this easy to spot, you wouldn't need us."
"We wanted to make sure people knew that with a Coldwell Banker agent that they have a trusted source that's going to help them to make a smart decision," said David Marine, Coldwell's director of business-to-consumer engagement.
Around the kitchen table, that sometimes means looking owners in the eye and telling them their home is worth $20,000 less than what they owe on it, said Eb Moore, CEO of Coldwell Banker, Howard Perry and Walston, a 575-agent franchisee in North Carolina. With the market sinking, his firm has cut marketing spending about 55% since 2007, although he expects the budget to "gradually climb as the market begins to resurge."
Century 21 will make a splash with its first Super Bowl appearance next year on NBC. The 30-second ad, which will likely cost more than $3 million, will cap a TV campaign debuting this week by independent shop Red Tettemer & Partners, Philadelphia, that promotes agents as "smarter, bolder, faster." The campaign marks a return to TV for Century 21, which beginning in 2009 pursued an online-only strategy. The company painted the move as a way to raise awareness with young buyers.
Real Trends' Mr. Murray said the spots may be a reaction to Re/Max, which has kept a steady TV presence with spots featuring CEO Margaret Kelly. The two franchisers are among eight companies that control more than 40% market share, Mr. Murray said. (Share data is not publicly available.)
Going forward, the ad battle will likely be over who can drive the most traffic to franchiser-run websites, Mr. Murray said. The sites are taking on greater importance in the wake of a policy change late last year by National Association of Realtors that cleared the way for national franchisers to display listings from all of their franchisees on one central search-results page.
Century 21 said earlier this year it was the first franchiser to take advantage, using search functionality that "enables one-click access to more than 3 million Multiple Listing Service listings."