Three brokers share their media buy rationales

By Roger Cruzen

The headlines are in black ink, but the balance sheet is all red. Not only are newspapers suffering from the real estate market decline, but circulation and ad revenues are collapsing as readers and advertisers move online. Consider The McClatchy Company, publishers of the respected Bee newspapers. In California alone, real estate advertising has plunged by 65 percent, the company reports.

Ironically, REALTORS® haven’t stopped spending money—they’re just moving it online. Nationally, by some estimates, they are expected to spend $8.5 billion on online advertising and $5 billion on online search in 2008.

Here’s how three prominent California REALTORS® have altered their media-buying strategies:

Company: Intero Real Estate

Profile: Founded in 2002, and headquartered in Cupertino, Intero has 2,000 California agents in 50 offices. Recently expanded outside California.

Media Strategy: It’s all about online syndication.

If you want a glimpse into why newspapers are struggling, consider that Intero once spent as much as $30,000 a week—about $1.5 million a year—on print advertising in the San Jose Mercury News. Today, what little print Intero buys is strictly aimed at driving eyeballs to its supercharged Web site. There, consumers from around the world can see every available property, search listings using their iPhone, or chat online with a live agent.

“It doesn’t make sense to spend 80 to 90 percent of our budget on print when research shows that’s not where consumers are,” explains Chief Operating Officer Tom Tognoli (pictured left). Beginning in mid-2007, Intero began diverting almost all its advertising dollars to the online channel. Today, the company syndicates every listing to Realtor.com, Zillow, Trulia, and more than a dozen other sites where buyers go to start their home search. “Probably 90 percent of people in the Silicon Valley start their home search online,” Tognoli explains. “We did our own research, and the numbers were staggering: The top five real estate sites alone generate 19 million unique visitors a month, but how many newspaper readers actually go to the real estate classifieds and see a two-line ad?  The reality is that we all probably should have done this five years ago.”

Intero does post its listings on mercurynews.com. However, only a tiny fraction of visitors to the Intero Web site originate with the newspaper’s site. “Less than three quarters of 1 percent of Mercury News page views are real estate content. At 300,000 circulation, that’s less than 3,000 people. The numbers just don’t make sense to us.”

Company: Sereno Group

Profile: Founded in July 2006, this single-office independent headquartered in Los Gatos serves Santa Clara, Santa Cruz, and San Mateo counties

Media Strategy:  Leverage print advertising to build a new brand.

When former Coldwell Banker/NRT executive Chris Trapani (pictured above) formed Sereno Group, he knew that an online presence would be a critical factor in his new company’s success. But with the major Silicon Valley brokerages abandoning traditional print advertising, Trapani saw an opportunity for a small brokerage serving a large geographic area to make a big impact.

Sereno Group listings today cover the front page of the weekend pull-out real estate section in the San Jose Mercury News.  For 2008, he ramped up his print ad budget by 35 percent and consolidated listing ads from across his 80-agent brokerage. He also buys four pages a month in the upscale San Jose magazine.

“With the others pulling out, this gave us the chance to gain a much larger share of the remaining eyeballs,” Trapani explains. “We don’t want to build a bricks and mortar presence, so the Mercury News gives us broader exposure and makes us visible in communities where we don’t have an office. Plus, in a more challenging market I believe you need to do more, so we created a new Web site and are doing more with video and blogging and SEO and syndication. It seems to be working, because we’ve seen a notable surge in call activity.”

Company: Lyon Real Estate

Profile: Family-owned brokerage founded in 1946; 1,000 agents in 16 offices serve the five-county Sacramento area.

Media Strategy:   It’s the medium and the message.

Mike Lyon (pictured left) doesn’t advertise to sell real estate—he advertises to drive consumers to GoLyon.com. The URL is on 5,000 yard signs and featured on radio spots he purchases on ClearChannel stations. And it’s all over the Internet, because that’s where buyers go before they are ready to talk to an agent.

“Home buyers start on the Internet for one reason: because they really don’t want to talk to an agent,” says Lyon. He spends 80 percent of his marketing dollars on the Internet and radio and will shift another 10 percent there within a few months.

But as important as where the message appears is the message that is communicated.

“Agents in this market need to be able to speak a different language,” says Lyon. “They need to use words that are empathetic when talking to a seller about a price reduction.”  Lyon now produces his own short videos on topics like negotiating price and accessing the FHA program, which he distributes throughout his system via e-mail. “I feel like my money is finally going toward garnering an actual client,” he states.

Roger Cruzen is a freelance real estate writer.