May 14 2008

Internet Advertising Strategies 1


Online Dilemma - Forrester Research reported a few years ago that consumers spend 1/3 of their time online, while only 4% of total ad dollars go toward online media.  Today, comScore reports consumers spend at least 17% of their media time online, online advertising only accounts for 7% of advertising spending.  comScore, a platinum sponsor of The Advertising Research Foundation’s 54th Annual Meeting and Convention in New York City, March 31 - April 2, 2008, presented a special session called “Online is the New Primetime,” and addresses the growing size of the online audience and its evolution as an advertising medium. Here is a webcast that was broadcast on April 16th.

(Updated June 30, 2008 - recently posted an article entitled Advertising’s Digital Disconnect. This references several reasons for the slow adoption of online advertising; very powerful.)

Conclusion - There is an enormous opportunity and upside for builders to incorporate more effective and integrated online marketing programs, thus reaching a wider range of home buyers.

While Internet ad spending has gone up considerably and continues to go up year after year, businesses are still struggling to figure out how much of their advertising budgets on traditional forms of advertising and how much to spend on Internet advertising. 

INTERNET STRATEGY #1 – Spend a greater percentage of your budget on Internet advertising.

There is no media in the world like the Internet. The Internet is always on. The window to reach consumers is ALWAYS OPEN. It’s like a store that never closes. It’s an ad that never goes away. 

Today’s real estate market has driven new home marketing professionals to look more closely at ad spending than in the past. With new home sales plummeting and marketing budgets being slashed, marketing directors are paying much closer attention to what yields are returned from their advertising dollars.  Consequently ad spending has shifted from the long standby, Newspapers and Magazines, to the cheaper and more effective Internet.  This is just the beginning.

Newspaper and Magazine advertising, in the new home sector, is struggling to stay alive. Why?

  1. It’s so expensive.  A full page color ad in a Newspaper can cost $30,000 for one single day. For $30,000, you could advertise 11 communities for a full year on $30,000 for one day or $30,000 for 365 days. To any bean counter, the answer is clear.
  2. The window to reach consumers is tiny. Sure, Newspapers will tout a distribution of hundreds of thousands or millions, but how many people are looking on that one particular day you spent $30,000 for your ad?  Exactly. I met with the marketing director for Standard Pacific Homes of Orange County a few years back. She said they spent $30,000 on a full page ad in the Orange County Register for a Sunday and that she was not able to account for one single person coming into any sales office because of that ad.
  3. Tracking print effectiveness is near impossible.  Website log files can record whether consumers just type in your website address or if they click from another website to yours.  This feature can more accurately track the return you are getting from advertising on other websites.
  4. Poor Return On Investment (ROI).  When Newspapers and Magazines were the only real options for consumers to find new homes, they were effective. Expensive but still effective.  The Internet has changed all that.  It’s cheaper. People spend more time on the Internet than read Newspapers and Magazines combined.

Newspapers and Magazines will always have a place in advertising, but the shift we are seeing is only the tip of the iceberg.  We have only just begun to see the transfer of power.  Newspapers and New Homes Magazines, if you are listening, you will do well to have an Internet presence just as powerful as the presence you had in the pre-Internet world.


  1. Advertise on 3-4 of the most visible ‘New Homes’ websites.  Remember, over 80% of home buyers are starting their home search on the Internet and consumers will visit several different websites in their search.
  2. Spend money on the website. A powerful and professional website will cost anywhere between $30,000 and $150,000.  Your website represents the entire company. If the website looks like a teenaged neighbor kid down the street built the website, then that will be the image consumers have of the company.
  3. Spend money on maintaining the website. The Internet is a real time environment. Make sure it is up to date at least weekly; daily is best.
  4. Spend money on human resources to manage the Internet leads that come in.
  5. Spend money on a system that will capture Internet leads and provide a way to EBlast those same leads in order to keep the relationship progressing toward the sale.

The Internet is the best dollar you can spend on advertising. The Internet is not just a place to advertise, it is a place of commerce.  No other media can you advertise and do business at the same time.  You can’t do that with T.V., billboards, newspapers, or magazines.  The Internet is the most powerful media in the world. 

Jim Adams - CEO
New Homes


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