Real Estate Advertising in South Lake Tahoe: The Down and Dirty on the Effectiveness of Traditional Methods.

September 3rd, 2007 categories: For Buyers, For Sellers, Lake Tahoe Real Estate

Advertising is one slice of the overall Marketing Pie.This is the third post in a four-part series about real estate marketing and advertising. The first was about the inability for anyone to sell something that any market, and a housing market in particular, determines to be over priced. That’s especially true here in our South Lake Tahoe Market these days. We took a humorous look at this in our post about our failure to sell Crest toothpaste for $35 a tube. (click "read the rest of this entry" below.)

 

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Next we discussed the difference between marketing and advertising, and detailed the nine pieces of the marketing pie, advertising being one of them, that have to work together to produce a successful marketing result… a sale!

Nobody has been in the real estate business long enough to know everything, but we’ve had our real estate practice here in South Lake Tahoe long enough to know a little. Plain and simple, some advertising works… and a whole lot of it doesn’t. So now lets take a look at advertising in and of itself… the “getting the word out” piece of the marketing pie. We’ll look at traditional advertising, and you just might be somewhat surprised at the outcome. We know we were.

TRADITIONAL REAL ESTATE ADVERTISING:
Some call the following “marketing”, but it’s all advertising. Most everybody will recognize each of these “traditional” advertising methods to sell a house. Generally they are not as effective as one might think. (The statistics below are from the National Association of Realtors® profile of home buyers and sellers from 2004 to 2006.)

The Local Real Estate Television ShowThe Local Television Show:
Every market has a few of these. We have about four that appear here in South Lake Tahoe. This is normally a weekend show featuring an agent talking about one or more of their listings.

The Fact: Only 1 out of every 100 Buyers finds the house they buy from a local television show, 99% do not.

What’s Good: Some Sellers have a “perception” that a local real estate television is effective. As such the local television show is good for the agent(s) involved. It attracts listings from future sellers, but rarely do they produce sales.

The effectiveness of the Open House as a Real Estate advertising method.The Open House:
Virtually every real estate market in the country uses the open house. Here in South Lake Tahoe, they are normally held on weekends, and may be promoted in the local newspaper, and/or by direct mail, or not. We have tried every method, and all seem to produce similar results, or traffic. We meet new people, and often not, which is good, but not once for us in the last 6 years has an open house produced a direct sale.

The Fact: Only 2 out of every 100 Buyers finds the house they buy from an Open House, 98% do not.

What’s Good: The Open House is good for the agents involved. It creates opportunities to meet, and make a good impression on the neighbors. It also creates opportunities to meet Buyers, who normally buy elsewhere (98% of the time). If direct mail is used, that too increases the opportunity for the agent to make an impression on those that receive it. Rarely does an open house benefit the Seller as much as it does the agent.

The effectiveness of the Newspaper as a Real Estate advertising method. The Newspaper:
This includes both space ads and classified ads. Increasingly print advertising of any kind is becoming less effective when compared to online media. This is particularly true in resort markets, like ours here in South Lake Tahoe, whose real estate demand is primarily fueled by out-of-town Buyers… who do not take nor read the local newspaper.

The Fact: Only 10 out of every 100 Buyers finds the home they buy from a newspaper ad, 90% do not.

What’s Good: Newspaper ads are more effective than a local television show and an open house, though not by a lot. The news print ad can have longer shelf life, though the newspaper ad too seems to help the agent in the long run more so than the Seller of the house in the ad. We have not seen a newspaper ad produce a direct sale for us in 6 years. (They have brought more than 150 people to our real estate seminars, which have produced listings that have sold.)

The effectiveness of the local Real Estate Magazinie as an advertising method. Local Real Estate Magazine:
Every market has these. They are usually free, found in racks around town, and are glossy, color monthly or bi-monthly publications containing ads for current listings. Here in South Lake Tahoe this is “Homes and Land”, “Premier Homes”, “Homes”, and “Luxury Homes”, among others.

The Fact: Only 3 out of every 100 Buyers finds the home they buy from a local real estate magazine, 97% do not.

What’s Good: Some Sellers have the perception that this is an effective advertising strategy, but like most traditional real estate advertising methods, this too has greater benefit for the agent than a particular Seller.  Ads in local real estate magazines produce more listings for an agent, again as a result of future Seller perception, than direct sales.

The effectiveness of the For Sale Sign as a real estate advertising method. The Yard Sign:
The yard sign is more productive than the other traditional forms of real estate advertising. It is certainly more effective in neighborhoods that are conducive to drive-by activity than those that are not. For example, gated communities, and resort areas, have far less drive-by activity than do suburban subdivisions. As such the yard sign works better in busy neighborhoods in primary home markets, and less so in markets driven by out-of -town demand, like ours.

In South Lake Tahoe, of our 40 or so neighborhoods, there is one that is far more conducive for Yard  Sign produced sales than any other. That is The Tahoe Keys. Most all other neighborhoods have significantly less drive-by activity.

The Fact: About 15 out of every 100 Buyers finds the house they buy from a Yard Sign, 85% do not.

The Good: While the Yard Sign does better than other traditional forms of real estate advertising, it still provides greater benefit for the agent than it does for a Seller. Agents will traditionally create more opportunity from the neighborhood good will and recognition from a sign, which creates future listings, than from the sale of the house that has the actual sign.

SO WHAT DOES WORK (kind of)?
We have found that DIRECT MAIL works better than any other form on traditional advertising. It works for listings primarily, not for finding Buyers. It is also costly. Many books have been written about it, and there is much to know about how to best execute direct mail campaigns. For our purposes here, for direct mail to be effective it must::

  • be short, clear and to the point.
  • offer something of interest or value.
  • appear consistently over time.

The next post, the last of this four-part series on marketing and advertising will explore what works now, and it’s all online.

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This entry was posted on Monday, September 3rd, 2007 at 11:52 pm and is filed under For Buyers, For Sellers, Lake Tahoe Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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