BIA/Kelsey is releasing its new comprehensive forecast on local media spending for the coming year. On the eve of the release, we spoke with BIA/Kelsey SVP and Chief Economist Mark Frantik.

What’s the big picture with spending on local advertising?

It is looking relatively strong. We’re seeing overall spending increasing three percent a year for the next five years. But the growth in advertising, while healthy, is not keeping up with the nominal growth in GDP, which is growing at 4.5 percent to 5 percent. Advertising has become increasingly efficient, and advertisers are also putting their money into other marketing areas, which we call “non advertising,” such as loyalty programs.

Which areas are growing faster than others?

Within local advertising, there are definitely pockets of faster growth. Online/Digital advertising is going up 12 percent a year. Traditional advertising, however, is decreasing by 0.5 percent a year.

Are any traditional media “going off the cliff,” given the fast changes in the industry?

Most traditional media remain very relevant. As mass media, they are great for extending the reach of a message. Most digital media are more about specifically targeting users. National and local advertisers will always want a mix of messages. That said, newspapers are in the most precarious position. We are estimating they’ll see a decrease in print advertising by five percent a year — and it will be even more severe if they limit the days they publish to three days a week, which is the current trend.

What are the big trends in digital spending?

What we are continuing to see is a speedup of digital marketing vehicles especially mobile, and the way they are used. All advertisers, whether larger or small, are taking advantage of digital benefits in big way. While traditional media remains an important part of the picture, generally, several segments have become much more oriented towards digital online.

In the new forecast, which indicators have gained more weight?

We’re monitoring everything on a weekly basis. Right now, we are banking on social ad networks becoming increasingly important. We also keep upping the growth rate of mobile advertising. But mobile starts with such a low base that the percentage of increases are a bit misleading. But by 2019, mobile becomes a BIG player in the local advertising marketplace

Can you point to a specific vertical segment that has moved to online?

One of these is real estate, which previously used newspapers for the vast majority of its spend. Now, real estate is all about vertical Websites, and the Websites of individual Realtors and brokerages.

Advisory Service clients can log in now to view the forecast. For more publically available information from the forecast, click now.

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BIA/Kelsey is releasing its new comprehensive forecast on local media spending for the coming year. On the eve of the release, we spoke with BIA/Kelsey SVP and Chief Economist Mark Frantik.

What’s the big picture with spending on local advertising?

It is looking relatively strong. We’re seeing overall spending increasing three percent a year for the next five years. But the growth in advertising, while healthy, is not keeping up with the nominal growth in GDP, which is growing at 4.5 percent to 5 percent. Advertising has become increasingly efficient, and advertisers are also putting their money into other marketing areas, which we call “non advertising,” such as loyalty programs.

Which areas are growing faster than others?

Within local advertising, there are definitely pockets of faster growth. Online/Digital advertising is going up 12 percent a year. Traditional advertising, however, is decreasing by 0.5 percent a year.

Are any traditional media “going off the cliff,” given the fast changes in the industry?

Most traditional media remain very relevant. As mass media, they are great for extending the reach of a message. Most digital media are more about specifically targeting users. National and local advertisers will always want a mix of messages. That said, newspapers are in the most precarious position. We are estimating they’ll see a decrease in print advertising by five percent a year — and it will be even more severe if they limit the days they publish to three days a week, which is the current trend.

What are the big trends in digital spending?

What we are continuing to see is a speedup of digital marketing vehicles especially mobile, and the way they are used. All advertisers, whether larger or small, are taking advantage of digital benefits in big way. While traditional media remains an important part of the picture, generally, several segments have become much more oriented towards digital online.

In the new forecast, which indicators have gained more weight?

We’re monitoring everything on a weekly basis. Right now, we are banking on social ad networks becoming increasingly important. We also keep upping the growth rate of mobile advertising. But mobile starts with such a low base that the percentage of increases are a bit misleading. But by 2019, mobile becomes a BIG player in the local advertising marketplace

Can you point to a specific vertical segment that has moved to online?

One of these is real estate, which previously used newspapers for the vast majority of its spend. Now, real estate is all about vertical Websites, and the Websites of individual Realtors and brokerages.

Advisory Service clients can log in now to view the forecast. For more publically available information from the forecast, click now.

The post Inside BIA/Kelsey's New Local Spending Forecast: Q&A with Mark Fratrik, SVP and Chief Economist, BIA/Kelsey appeared first on BIA/Kelsey - Local Media Watch.

2012 Real Estate Ad Spending by Media

So nearly 28% of real estate ad spending goes to newspaper and 24% goes to online, according to Media Ad View Plus, but where are home buyers actually looking for homes? According to National Association of Realtors in their 2012 Profile of Home Buyers and Sellers, “nine in 10 home buyers today rely on the internet as one of their primary research sources, and 52 percent turn to the web as their first step.”  As you can see below, while 90% of home buyers might use Internet as a primary research source, the National Association of Realtors reports that only 27% use newspaper ads.

• Internet: 90%
• Real estate agent: 87%
• Yard sign: 53%
• Open house: 45%
• Newspaper ad: 27%
• Home book or magazine: 18%

In a joint study by National Association of Realtors and Google, entitled The Digital House Hunt: Consumer and Market Trends in Real Estate, they found that 89% of new home shoppers used a mobile search engine and that 68% used a mobile application throughout their research process.

Not surprisingly, given the National Association of Realtors and Google’s findings, online advertising spending is expected to grow rapidly.  By 2017, online is expected to be the medium of choice for real estate, with nearly 41% of the advertising pie, according to Media Ad View Plus. Meanwhile, newspaper’s share of the real estate advertising pie is expected to decline, reaching less than 7% by 2017. Mobile is also expected to benefit from the newspaper industry’s continuing decline, as its share increases from 1% to 12.6%.

2017 Real Estate Ad Spending by Media

BIA/Kelsey is projecting online’s revenue share to start surpassing newspaper’s in the Real Estate vertical in 2013.

More information on Media Ad View Plus is available here.

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With the rise of consumer-facing real estate sites such as Realtor.com, Zillow and Trulia, it seems only natural that Multiple Listing Services would break out from behind the Realtor and brokerage firewalls, and provide truly local, for-profit real estate sites, complete with advertising and features.

Houston Area Realtors has been perhaps the most prominent MLS to do this. Another is MRIS, the mega-MLS covering the entire Washington, D.C., metro area. Another large MLS that has had a consumer=facing site is Multiple Listing Service of Long Island, New York, which has been active on the consumer side for more than seven years.

MLSLI has a friendly site, complete with standard features such as neighborhood and school information. But now, the 20,000 agent-strong MLS, which is owned by the Long Island Board of Realtors and serves Nassau, Suffolk and Queens, says it is ready to overhaul its site for the social and mobile generation. Working with Local Matters, which has been focusing on the MLS market, MLSLI says that its new, locally customized site will be up in 90 days — in time for spring, which is the peak house buying season.

Jim Speer, MLSLI vice president of operations, tells us the site will help spur his members to work more effectively with social media such as Facebook and Twitter. Many Realtors have been effectively using social media, but there is a still huge chunk who don’t. It will also include Zillow-like automated valuation models for homes.

In addition, the site will be more agent-centric. “On our Web site, users will click on a listing and get direct access to agents and their office listing,” he says. “It is really a straight path to our agents and brokers members.”

Speer, however, believes the site will only be enhancing the role of the agents and brokers. It will probably never be a big revenue maker, he says. “Maybe it will offset some of our dues. But we don’t sell anything to our members,” he said. “There won’t be featured listings or advertising.”

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Redfin’s apparent progress is seen by some as evidence that the advantage goes to brokerages that minimize their risk (namely, keeping agents around that underperform). With Redfin, agents are on salary and don’t do prospecting. Instead, they focus on customer service, and are paid, in part, based on satisfaction levels.

“We’ve been doubling every year,” and have had a good run for the past 12 to 16 months, despite the bad economy, said Kelman. The past two months, however, have been flat as tax incentives have expired. Kelman further noted that the Bay Area is Redfin’s most profitable market, although Washington, D.C., and Los Angeles are the company’s largest revenue producers.

Redfin got in the national press recently because one of the 10 Russian spies had been employed as an agent. Kelman noted that the Boston-based agent was “a very dedicated person. It didn’t gibe with the person selling homes for us.”

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Zillow announced today that it will power Yahoo’s “for sale” listings, in much the same way that Cars.com powers Yahoo’s new and used cars listings. Zillow typically carries 4 million-plus listings. The announcement spearheads a slew of online real estate announcements prior to next week’s Inman Real Estate Connect conference (which I am attending).

The enhanced Yahoo and Zillow tie doesn’t achieve the “buy a slot” status of other Yahoo vertical outsourcing — it would have been too expensive for any of the major real estate portals — but it also goes well beyond the current Yahoo-Zillow relationship, which basically consists of Yahoo’s syndication of Zestimate home valuations. That has been in place since 2006.

Under the new deal, the two companies bring together the real estate Web sites that have the second (Zillow) and third (Yahoo) highest number of unique visitors, per comScore. The deal, which is symbiotic for both companies, shows how things have changed from five or six years ago, when Yahoo itself was seen as a major threat to use open Internet listings to dominate real estate advertising. Now, Yahoo is basically content leveraging its sales relationships with national brokerages, while Zillow focuses on the content and local accounts. Real estate remains highly profitable for Yahoo.

While Zillow listings won’t go up on Yahoo until later this year, the two companies are immediately coordinating their sales efforts. Zillow’s “Premier Agent” program will be extended to Yahoo Real Estate. Current Zillow advertisers will be offered the chance to extend their relationship to Yahoo. Additionally, Zillow’s local “Showcase Ads” and “Featured Listings” will automatically be extended to Yahoo, making it easier for both sites to reach a quorum of users. For Sale By Owner advertising will also appear on both sites. One thing that Yahoo doesn’t get is access to Zillow’s growing display business.

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Trulia, which is ranked a Top 7 real estate site by comScore, has followed the lead of Realtor.com and Zillow and added rentals to its site. The rentals section features all Trulia’s functionality, such as neighborhood information, mapping and ratings information, and filters for relevant searches such as “pets allowed.”

The site also offers “search on the go.” Roughly 10 percent of Trulia’s usage now comes from mobile devices. Trulia’s mobile Web site is compatible with the iPhone, BlackBerry and Android platforms.

Trulia rentals covers the gamut from multifamily to houses. Listings will come from Independent Listings Services, as well as from brokerages and landlords. There are “millions” of units on the site at launch, with more than 25,000 in New York City.

One advantage of Trulia rentals, per CEO Pete Flint, is Trulia’s ability to assume hosting duties for listers including the hosting of contact info, images of units and floor plans, and other information. That separates Trulia from some of the rentals aggregators in the market, such as Oodle, he says.

Flint notes that 30 percent of the site’s visitors are typically looking to either rent or buy. The market trends are “absolutely in favor of renting,” he says. Overall, rentals “are as large as the ‘for sale’ business.”

Separately, in an interview with BusinessWeek, Flint deflected rumors that Google has been looking into buying the company. Trulia uses many of Google’s features and it would seem to be a nice fit. But Flint told BusinessWeek that the real estate market isn’t strong enough to appreciate the site’s full value this year.

As an alternative, the company is looking for an outside investor that would let employees and owners cash in their shares without waiting for an initial public offering, similar to Facebook’s arrangement with Digital Sky Technologies, a Russian company, and Yelp’s arrangement with Elevation Partners.

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Rumors have been flying that Google is poised to buy Trulia, “the real estate search engine” that competes with, among others, Zillow (which just said it is aiming to IPO in 2011).

But according to reports by attendees, no information was forthcoming at Inman’s 2010 Real Estate Connect conference in NYC, where Google Director of Local and B2B markets Sam Sebastian addressed the audience. Sebastian did note, however, that “we’re actively looking to acquire one to two companies a month.” (Note: This is a corrected quote, per an investigation by Greg Sterling. A previous version suggested he had specifically said “real estate companies.”)

The Trulia rumors have been partially fueled by the development of Google’s new Place Pages, a merchant profile feature that could theoretically be used to develop a national Multiple Listings Service, competing with Realtor.com. If that were the case, Trulia would probably help enlist agents and brokerages.

But there is “not some evil plan we have in Mountain View, with millions of folks talking about how we want to take over the real estate markets,” said Sebastian, again, according to published reports. And there really are no plans to focus on Place Pages for real estate.

Sebastian did note, however, that brokerages were finding out Google’s advantages on their own. “Agents have always been pretty engaged in buying keywords and targeted ads from Google to drive traffic to their Web sites,” he said.

Trulia, itself, reports that it has come off a gangbuster year, with 62.3 million unique visitors, 45 percent more visits and 105 percent more page views. Along with increased engagement, Trulia reports that “consumer interest in homes exploded, with nearly 1 million home buyer inquiries sent to real estate agents in 2009.”

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