There is almost no gentle way to say it. One of the most challenging realities of today’s real estate industry environment is the fact that brokerages are caught in a squeeze between the pressures being generated by the current economic and marketplace instability and the rapidly transitioning demands and expectations of the emerging new consumer. Beyond the sheer energy required to address these two competing forces is the even crueler realty that it requires two totally different skill sets to meet the threats of the marketplace and the opportunities being created by the emerging consumer.
Combined, these forces are creating an internal conflict between those in the brokerage who are responsible for making sure the firm survives the next 23 months and those responsible for making sure the firm emerges as a relevant, competitive and profitable entity configured to succeed within the new real estate transition.
While it is doubtful that this article will even begin to calm the internal conflict, we hope it sheds some light on the critical need for brokerages to find the resources, innovative energies and creativity necessary to keep pace with the rapidly transitioning world of media.
Many if not most brokerages have significantly cut back on their marketing and advertising expenditures over the past few years. The assumption is that when cash flows return, adequate marketing budgets will return with them. This is certainly understandable given the circumstances. However, what is dangerous is that firms have also cut back on their awareness of what is happening within the marketing world and more specifically what is happening with respect to media.
For the purposes of this article, the term “media” refers to the tools used to store and deliver information or to end-users. In the case of the real estate industry, it refers to the tools used to deliver a firm’s value proposition and inventory to the real estate consumer. From a traditional perspective, this has meant newspapers, printed collateral and various items that could be snail-mailed to the consumer or whispered in their ear. In anticipation of the human cry from those who would suggest that one must now include online media to the mix, one would have to say that it isn’t clear that the industry has yet to fully adopt in this arena. While it is true that most firms have some manner of website, few are really Web 2.0-compliant, and in any event the marketing world is currently affecting a shift to Web 3.0 compliance, which means that even fewer firms are really connecting through the Internet.
That being said, brokers must focus on what is currently happening in the world of media as it relates to real estate marketing. It is critical to understand that today’s transitioning media environment is an absolute reflection of consumer demands and expectations. The most powerful initiatives are now occurring in video. Channing Dawson, a key creative player with the Scripps Network, reports that the American video habit has now reached 200 billion hours per year and shows no sign of lessening. Deloitte’s current research suggests that Americans have added two hours to their weekly TV diet in the last year alone. Forrester Research reports that in the past 18 months, Americans have added half a trillion text messages annually and 1.3 more hours online each week. The Consumer Electronics Association reports that expenditures by the average family to date in 2010 have increased to $1,380, up $151 from last year even before the holiday season.
With respect to classic TV, Americans now spend an average of 35 hours per week. They spend another two watching “time-shifted” programming using digital video recording (DVR) and another 20 minutes watching video on the Internet. Most interesting of all is the fact that the amount of time Americans spend exclusively watching TV is down in favor of the amount of time they spend media “multi-tasking.”
Interaction with the Internet is also increasing with 78 percent of all Americans who have Internet access using that ability at least daily (the Pew Foundation). Thirty-eight percent of this group, increasingly across all age ranges, are engaged in various social media activities.
As predicted, the newspaper and even their websites continue to lose ground as effective media. Only 31 percent report reading a printed newspaper and 62 percent of this group are over 65 years of age (not a real estate target group). Finally, one must take into consideration the new and expanding media like e-books, smart phones, social media and applications.
These shifts in media utilization are bringing with them support for entirely new ways in which to use video, television, cell phones and perhaps most importantly of all, the exploding social media scene.
Note that this article is not about the future. These things are happening right now. So the decision to cut back on the marketing dollar should not include a decision to allow the firm to lose touch with the marketing environment. Brokers must take steps to make sure that their leadership and management resources are taking steps to stay current with the transitioning media and marketing scene. Consider the following interim steps:
• Assign responsibility to someone for reading Advertising Age. Thirty minutes spend reading this weekly publication with a subsequent 10-minute report to staff will work wonders.
• At least quarterly, create a marketing fantasy session that starts with the concept that “we just won a million dollars in the lottery but we must spend it on marketing our firm.” What would you do, what creativity and innovation would you bring to the table? How would you spend the money?
• At least quarterly, assign responsibility to folks on your team (including agents, managers and administrative staff) to collect, evaluate and report on the marketing efforts of your competitors. In today’s increasingly competitive marketplace everyone must be on the marketing team. If you run out of players tap some spouses, they have the advantage of being consumers, too.
The entire industry should be increasingly concerned with the fact that financially surviving the five-year journey across the desert will not be enough to guarantee success. There will be no rest at the other end. For firms that have not reconfigured themselves during the march, they will find themselves aliens in their own marketplace. Use this time to prepare. We can do this.