The world is very different than it was 10, 20, 30 years ago. Businesses used to pour money into print advertising and marketing with few ways to determine exact reporting, ROI or the ability to effectively A/B test. That has changed drastically in the last decade with the emergence of online advertising. With innovative and advanced ways to constantly report and shift messaging to better reflect consumers' needs, it’s no wonder most industries reallocated their marketing budgets almost exclusively to web. However, in the case of real estate, the shift to web has been much slower because historically, the industry hasn't been forced to adapt and innovate like others have, despite the growing presence of tech-driven companies like ours and many others.
Today in the United States, only 1% of homebuyers find their homes via print advertising, while 50% find their homes via the internet. That statistic alone begs the question: Why are brokerages still spending precious advertising dollars on print?
Running ads across multiple channels is key to every great marketing strategy, but some (who perhaps have grown too attached to print advertising) are allocating unhealthy percentages of their budgets to that channel. Here’s why I believe that can be an issue:
1. Margin pressure: Brokerages' margins are under immense pressure. To add perspective, the average retained commission by a brokerage today is half of what it was decades ago — as recently as 2012, the retained company dollar nationally was at 22.4%, while today it sits at a mere 14.8%. Putting precious funds into print advertising means more likely than not they will see no tangible ROI. Any wasted marketing expenses like these only contribute further to margin pressure.
2. Generational gaps: Brokerage owners and their agents demographically are more than likely a generation ahead of the customers they most want to reach. Most brokerage owners and agents look through their own lenses, and for them, print is still relevant. But millennials now make up the largest homebuying audience out there, and they are predisposed to digital (even less impacted by print than the generation prior and more impacted by digital).