According to the Borrell Associates report ‘2013 Real Estate Outlook’, real estate advertising as a whole is projected to grow by 9.7% overall to $27.2B, while the online/digital category is projected to grow by 16.9% in 2013 to reach $15B in spend. This makes the real estate industry the number one spender in the online advertising marketplace, surpassing the automotive industry for the second year in a row.
The industry’s shift from traditional (offline) marketing to online marketing has reached new levels of disparity. Legacy marketing mediums such as newspaper ads now only account for 14% of the overall market spend while online ads account for over 56%. This trend is expected to continue as newer digital platforms such as social media, mobile, video, paid lead generation portals and contextual display advertising all continue to develop, rapidly.
The Borrell report goes on to explain that future growth rates in real estate advertising are directly correlated with the number of “planned purchases” by consumers, which is expected to increase for every home type into 2014. As demand exceeds supply in many markets, the National Association of Homebuilders reports single-family residential new construction starts are forecasted to increase 26% and 30% in 2013 and 2014, respectively. These significant economic indicators calling for consistent market growth, coupled with the substantial shift of cash moving from traditional into online advertising, clearly point to a continued and unprecedented digital marketing spend from the greater real estate industry.
According to www.emarketer.com, overall online ad spend is projected to steadily increase year over year:
• 2013- $42.5B
• 2014- $47.8B
• 2015- $51.9B
• 2016- $55.2B
If the real estate industry simply maintains its current share of overall online spending, using www.emarketer.com data as a baseline, the relative yearly spends would equate to:
• 2013- $15B +9.7% Year over Year (YoY) growth
• 2014- $16.7B +19.2% YoY
• 2015- $18.1B +8.3% YoY
• 2016- $19.3B +6.6% YoY
Digital Marketing Failures
The REAL Trends 2013 Online Performance Study reveals some shocking statistics around how the greater real estate industry effectively throws its online advertising budgets to the wind.
• 90% of consumers did online research before they bought their last home
• 45% of consumers expect an initial response from an online inquiry within 15 minutes
• 56% of consumers expect a response from their agent within 30 minutes
• 89% of consumers said response time was very important when choosing their agent
• 45% of inquiries on real estate websites never receive a response.
...billions of dollars are being wasted on digital marketing products and services.