[NOTE: This section of the book can do with an update, given the dramatic changes in social media, search and AI over the last few years.]
When you ask most agents for their marketing strategy they send you an advertising budget. Advertising is not marketing. Advertising helps you spread your message whereas marketing is about creating and massaging the message. Of course, the two are inextricably linked — your marketing strategy helps determine what advertising you will use and the form of advertising available in the market influences how you present your message. Advertising mediums include:
- Direct selling — agent or developer targeting existing contacts, or simple old canvassing and cold calling.
- Internet — agent website, market wide multiple listing websites, online adverts, social media.
- Specialist real estate magazines.
- Signage — bus-backs, bus shelters, billboards, on-site advertising boards.
- Newspaper real estate sections — national, regional, local, ethnic.
- Target market publications — flight magazines, community publications, foreign magazines, home design magazines, financial and investment publications.
- Advertorials in publications and newspapers.
- Flyers and postcards — distributed around the neighbourhood, mailbox drops, placed in retail shops.
- Radio advertising.
- Television — mainstream channels, cable, community or ethnic channels, on-demand internet TV
- Sponsorship — local sports teams, charities, radio or television programmes partnerships.
Advertising needs to be budgeted for accordingly. Have your agent provide a breakdown of all proposed advertising mediums and their cost over a one, two or three month sales programme. Challenge the agent on each medium asking them to present the evidence to justify you paying for this advertising. Listing your project and individual sections or homes on multiple listing websites is very cost effective and let’s face it — everyone who wants to buy a home is looking at web listings every day, throughout the day. Therefore, do you even need a newspaper or print publication advertisement?
Maybe, as it can help reinforce your project in light of the competition and great advertising can be lost on the internet as compared to in print. In addition, when you list on the internet you have to define specific categories about your homes or sections and therefore you are relying on the buyer’s search criteria finding your project. If yours are the only sections being sold in your area, potential buyers who have not considered buying a section versus buying a home and land package may not even know your option exists.
Establish a way to measure how effective your advertising is. Ideally you will determine your cost per sale for each form of advertising. With real estate advertising typically utilising multiple channels (and many building on and reinforcing others) this will be near impossible to calculate. However, make your best effort to record the data and measure over time. When the agent holds open homes or gets contacted by a potential buyer get them to ask and record ‘how did you find out about us?’ A second more powerful question is ‘what made you contact me today?’ Try to determine what advertising is best at attracting buyers and what advertising has little effect.
When placing print adverts the location and prominence on the page is important and the publication will price accordingly. Expect to pay more for a right hand side page than a left hand. A full page costs more than a half page which costs more than a quarter page (but not necessarily proportionally). The cover is prime advertising real estate, often accompanied by the inside cover and first page for a three page spread. The rear page is also sought after. A typical approach is to launch your development with prime adverts and continue with full page adverts in the first month. Then, if sales are progressing according to expectations rely on smaller adverts. Expect to do more advertising in a softer market.
Agents like to profile themselves as much as possible and love having their photo attached to all advertising — it helps them get facetime in their market and win their next listing. This is not necessarily a bad thing for your development but you must be careful to balance the development branding so it does not unduly compete with the branding of the real estate agent or their agency.
Whichever medium you use you need to employ your price setting strategy to advertise your price. Price positioning can include several techniques to draw buyers, for example:
- Prices start from $500,000
- From $500,000 to $750,000
- 4 Bedrooms $600,000, 5 bedrooms $750,000
- One left at $499,000
- First release pricing $399,500
- All priced below $599,000!
You may decide not to present a price and use by negotiation, tender or auction. However, you definitely want to instil a call to action. One way is to advertise how successful the development is and how many units you have sold. Overtime, buyers who look at the same advert each week see available stock decreasing — this can act powerfully to create a sense of urgency. Advertising ‘call to action’ examples:
- 30% sold out!
- 30% sold out first weekend!
- Only seven left!
- 15 sold, 3 remaining!
- Averaging 10 sales per week, only two weeks inventory left!
- All four bedrooms sold out — only five bedrooms remaining[1]
[1] Be careful this doesn’t create a negative reaction in a buyer — why does no one want the five bedrooms?
Andrew Crosby
+64 21 982 444
andrew@xpectproperty.com
