One area of the real estate industry that will be changed forever as a result of the economic down turn is advertising. Most notably newspapers will be wounded and are unlikely to fully recover.
Realtors/agents around the world are facing enormous financial pressures and they are, perhaps for the first time, really trying to understand the true value they are receiving from their various advertising efforts. Through this analysis, realtors will realise that print no longer delivers the results that it once did and they will therefore abandon much of their traditional advertising. There is only so much they can afford to pay for vanity.
As the volumes of ads in the papers decrease, the public will also begin to abandon them as a useful source for hunting for a new home. The print publishers will chase the market and drop their prices as they have huge fixed assets and distribution channels to keep fully occupied. Financially stable realtors will realise that this and turn the screws on the papers and negotiate deals that were once unobtainable. Newspaper margins will be squeezed and publishers will either merge or go out of business. These are definitely tough times for the traditional media players.
As if on queue for this article, it was announced today that the US media giant, the Tribune Group, has filed for bankruptcy citing an industry wide slump in advertising revenues as the cause.
On the other hand, property portal sites will probably do well out of the downturn. Some of the money that was going into traditional media will flow to them as realtors will realise that portal sites are delivering a strong flow of low cost leads. Leading realtors will also look for ways to stand out from the crowd (i.e. their competitors) and will invest in premium products from the portals sites as they chase more leads at lowers costs.
Some of the more enterprising realtors will improve the quality of their own websites and will drive traffic through advertising on search engines (ok … Google) and on social networking sites. The aim will be to drive even more low cost leads.
Finally agents will fundamentally rethink how they handle leads within their businesses. The increased use of online advertising will result in significantly more leads flowing into the business. While not all of these leads will be high quality, they will need to utilise technology to help manage these leads in a timely manner.
Those that don't adapt to the changing market and hold onto their old ways will cease to exist. Those agents that do adapt and see this as an opportunity rather than as a problem will be the winners. As in many aspects of life, it is the survival of the fittest and the fastest.