It's shakeup time for one major Valley newspaper. The East Valley Tribune is blaming the current economic downturn and stagnant Real Estate market for a recent decline in readership. According to an article on azcentral.com, the Trib is cutting 142 positions and pulling out of Scottsdale and Tempe in January. The paper will also scale back to a four day delivery schedule.
By and large, slumping advertising revenues are being blamed for the woes of several local publications. As the market has softened with properties becoming increasingly difficult to sell, Real Estate agents and brokerages have largely spurned such traditional forms of marketing for the cheaper, more effective reach of the internet.
As a working Realtor in the Scottsdale, Phoenix and Paradise Valley area, allow me to interject my 2 cents into their depleted coffers.
I have read and heard many mentions over the course of the past year regarding the hesitancy of agents to plunk down advertising dollars in this treacherous market. It is widely theorized that my fellow entrepreneurs have shied away from the expense due to the diminished likelihood of producing the sale that would justify all of the upfront expense. While the logic is sound, it is of flawed construct.
Now, more than ever, promoting a property is critical to the goal of standing out from the sea of competition. Productive agents know that they must not only employ the tools which have been successful in the recent past, but explore new frontiers in the adapt or perish landscape that dots our profession.
We have adapted, and the periodicals have not. That is why they will continue to perish.
Newspaper advertising has not been a successful medium for marketing property in the 10 years I have been a licensed agent. Forget a measure of "bang for the buck," as there is, and was, virtually no bang. The papers were artificially propped up during the heights of 2004-2006 because agents were making money hand over fist. Knowing that properties were going to sell in a heartbeat, thus negating lengthy marketing expenditures, it was a no-brainer to offer weekly advertising to sellers as an appeasement, even though it was well known to be an ineffective medium. Buyers simply do not go to the morning paper to look for homes anymore. Everything they need is available online, 24 hours a day.
To be sure, the advertising rates in the local rags have become exorbinant to the point of hilarity, but it is not the price tag that has driven Realtors away. It's the value. There is none. Quarter pages, full color pages ... we've tried them all. None make the phone ring. Believe me, agents are always looking for the new mousetrap to catch buyers. While preferably that would entail a medium that doesn't require so much sharp cheddar, I hazard the assertion that my fellow agents and I would shell out even more than the barbaric rates currently charged if the medium proved effective in any way, shape or form.
Buyers want digital pictures. They want virtual tours. They want a fully searchable multiple listing service which allows them to browse at their own leisure. They want maps and tax records. And they want it all in one place. As such, the agents who are truly earning their keeps have pulled their resources out of failed avenues and reallocated expense to the more fruitful virtual world. We engross ourselves in SEO and we churn out post after post to keep ourselves and our properties front and center before the eyes of our intended audience.
Most papers have spawned online versions of their publications. I urge them to pursue this medium fully, and gradually phase out antiquated physical delivery. A recurring internet ad is one which is much more palatable to agents like myself who intend to reach beyond the borders of local readership. Even those ads will remain prohibitively costly until the revenue stops subsidizing the dead medium of the paper version. Streamline operations to make costs more manageable, and the advertising department can bring fees more in line with results. More to the point, the efforts will be geared towards actually reaching buyers where they lurk: online.
We'll spend the money if it produces results.
Especially in a city like Scottsdale, with our high volume of tourism, we need to reach those potential new residents in other parts of the country/world. I've always liked to sit down with the morning paper as part of my ritual, but I finally halted my subscriptions a few days ago. Everything I want to read is free online, and I don't have to murder any more trees unnecessarily. I offer that a radical departure from the fundamental circulation strategy is necessary if periodicals are to survive this 2.0 world into which we have all been dragged.
The papers aren't failing because agents aren't spending any money. The papers are failing because agents aren't spending any money on frivolous, nonproductive means.
Anybody still buying ribbon for their typewriters?
Your source for Scottsdale Real Estate since the dawn of time ... or thereabouts.
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Paul - I'd like to say I'm surprised, but I'm not. Print media, for the most part, has just not been flexible, or open to change.
Heather - It's interesting to note how the fortunes of print media and our industry are intertwined. Much like the rigid, inflexible agents who stubbornly cling to outdated methods, the papers that refuse to adapt to today's environment are floundering greatly.
AMEN, Brotha' Paul! It's ALL about the ROI and they just don't get it! They've been on a sharp decline for years but, I guess I'm okay with them using us as a scapegoat--doesn't hurt my feelings a bit, nor does their decline. We've been asking them for years now, to lower their rates and provide internet presence, hence advertising and prices that are competitive. However, they remained too greedy. Their loss, not mine!
(Can you tell I've been in the same fight with you?! Tag, you're it...)
The only reason I know that an agent will still use print advertising is to impress the seller. A lot of seller's like to see their home in the paper/magazines. It is up to us to educate our sellers about the truly effective virtual world of advertising.
Buyers are online -- a professionalagent knows how to effectively market to put the seller's home front and center in the buyers' online searches.
Debe - I find it exceedingly amusing that the very driver of the story of the inevitable collapse of the Real Estate market (before there even was a story) is one of the largest casualties. While they were so gleefully trumpeting the pending demise of our industry and plight of the greedy Realtor, they forgot the simple law of symbiosis. By and large, they laughed as they cooked their golden goose. Lo and behold, where did all our advertising revenue go?
Elaine - I agree. There are certain publications/magazines which may work for particular properties, but as an effective general medium, the papers fail miserably. Even the agents who run a litany of ads will be the first to concede that it is merely a campaign to impress sellers. Call me crazy, but considering that we are all working with finite resources, I'd go with the effective means rather than the materials designed to just make an agent look busy.
Paul--You're right on the money there (did I just say that?)! It's a bit difficult to be gleeful in this market, albeit I'm not closing my doors but, just wait until next year! I don't wish for anyone to be unempolyed, of course; it's the higher-up, decision-makers who began ruffling my feathers long ago, then the entire publication here became, what we call the Charlotte Disturber! Writers began their blatant left-wing, negative Nancy material, therefore sending our real estate market in a downward spiral, then they wonder why REALTORS no longer contribute to their publication! Go figure.
Okay, one last thing--not a rant this time! (Can you tell you struck a cord with me?! I don't generally comment more than once on a post--I guess I'm pulling one of TLW's 'hijacking's huh?!)
I featured you on Dedicated Bloggers and flagged for a feature! Thanks for the great post, Paul!
Typewriter ribbon? Great ending, perfect point. I guess I'll go ahead and get rid of the rotary dial on my cell phone too...
Debe - Why thank you for the nod. It has become somewhat en vogue to lampoon the media, but it is warranted in this case. Sensationalistic coverage coupled with a nonproductive advertising mechanism does not endear the print media to our profession. I don't expect favorable coverage in return for ad revenue, but I do expect fundamental fairness. I would swallow it, though, if running ads in their pages would serve my clients. It doesn't, so I don't.
Mara - You have a phone? I'm still using two sticks and a lighter to send my signals.
Newspapers reaped in Billions from agents and brokers before the Internet. When a 3 line Open House ad would cost $250 for one day, who can blame agents for innovating? The decline in the popularity of Open House activity appears to coincide with the decline in the popularity of newspaper advertising.
Agents and brokers have a tremendous took in our MLS/IDX sites. It's beats the newspapers hands down. To me, a newspaper is just too dang inneficient.
Lenn - Inefficient. Unresponsive. Antiquated. Irrelevent. Indigent. Indefensible.
My old neighbor worked for the Tribune over the last couple of years. Before that he spent 25+ years at the Republic. It was a tramatic time early on this year, as being the head of his department, he had to let all his staff go. Then a month later his boss let him go. There response was times are changing....not everyone wants to read a newspaper anymore they read there news online. The Tribune can't compete. For my neighbor this was extremely tough, not only is he having a hardtime finding a job, but at 55 his skills are not marketable. With a family to feed and being out of work for 6 months.....
Cheron Lange
Cheron - That is a rough situation, indeed. Makes me think of our out of work colleagues in the Real Estate profession. Some brokerages and agents haven't adapted and will sadly be looking for new employment. Given the state of the overall economy, landing another sales position with strong earning potential will be no easy feat. I truly hope the papers heed this wakeup call and begin to adapt in earnest to the new technological world of marketing or your neighbor's story will be repeated time and again.
As someone who worked for over a decade at one of the US's largest newspapers before getting my Real Estate license in 2006, I was keenly aware of the lack of value in print advertising. Yet I still coughed up money to advertise in the local community paper when I was trying to get started as a Realtor. Fortunately, it became cost-prohibitive before I could throw away too much money and I quickly learned the value of Internet advertising. Now, two years later, every client I have served has come from my Internet advertising and my sphere of influence. I don't think any of my print ads ever even resulted in a single phone call.
A great blog, deserves a comment. Your absolutely correct about print advertizing. It's a thing of the past.
The East Valley Tribune is blaming the current economic downturn and stagnant Real Estate market for a recent decline in readership. Of course they are. It would be un-American to do otherwise. It's not the homeowner's fault that they misstated income to get a loan they couldn't afford, it's not the lender's fault that they accepted applications without verifying anything beyond the applicant's name. It's not the agent's fault that they allowed clients to overpay when a CMA and common sense said to walk-away. Why the heck would it be the newspaper's fault that they can't recognize and adapt to a changing world?
It has been years since I have used print ads - Zero response is all they get - blaming the economy for their inefficiency is pretty lame.
Paul, I wonder when all the Home Magazines are going to be obsolete?
Paul, for two years my two friends and I maintained a 1/2 page ad in the local Homes Magazine to appease our sellers. In the 2 years, I did not receive a single call or, as far as I can tell, a single showing by a another Realtor as a result of those ads. The internet is the place to be.
Love the new picture. You are your son look so sweet together. xxoo
Paul- As I was reading your post I was thinking of all the trees we would save by halting the ancient ritual of a morning paper and then BAM you made the point in the last paragraph. You are right on the money with this post! I have to tell you I used to run a 2X2 add in the classified that stated..."if you want to see all of our listings with full color photos go to www. blah blah blah." It was still very expensive. And no response! Needless to say I stopped that nose bleed also!
The newspapers beat down the Real Estate market with articles that contained inaccurate information then turned around and raised the advertising rates in their medium that is not producing. I think I'll go cry for them.
Typewriter? What's this newfangled thing you call a typewriter?
YOu are like me I don't mind spending money if it works, and the print media is a dinasaur.
Gee, while we're tossing 'out' out-moded inventions guess I don't need this intergalactic anti-matter replicator. The Jello always tasted tinny out the darn thing anyway.
Buyers, the very people we are trying to appeal to, do not, for the most part, use the newspaper to search for homes. It is too cumbersome. You have to dig through the entire haystack to find the needle you want. In less than 2 years, the newspaper real estate ads in my area have decreased by almost 75%
exorbinant to the point of hilarity...it's a good thing it's late or those people in my office would say...there's that funny noise again...Shannon must be reading one of Paul's posts! :)
It has lot to do with not being competitive with the ROI newspapers and magazines offer. Not sure what they were charging but up here in Las Vegas, the ROI is terrible compared to other forms of advertising far more effective.
Paul,
I've been in the biz for 10 years and dropped print ads about 5 years ago except for Norman, OK which is a small town where newspapers ads work and are dirt cheap. I have seen no adverse effects from not running print ads and enjoy the massive savings. The Oklahoman has always been outrageous when it comes to what they charge and I don't feel that many people use the papers to find a home or an agent.
I do have a Yellow Pages ad which does quite well and I budget for Internet media, website, etc since that is where most of my leads and sales come from. In short, the paper has been a dying breed for quite some time and I think they will continue their downward spiral as the market stays a little slower. I have read where there have been larger papers actually cancel their real estate sections due to the loss of revenue and I suspect that the loss has been there a while but even more so lately.
Antiquated without a doubt. Indubitably something one uses only to make seller happy. We should work harder on educating sellers to the wonderful world of the world wide web! Cute new picture! KM
Paul - Newspapers are victims of their on scare tactics. They are getting paid back.
Question:If the NAR has been saying for a couple of years that 70-80% of buyers come from the internet, why are folks still using newspapers?
Answer: Because homesellers expect to see it in their newspapers - and most agents are too afraid/lazy to educate their clients.
I just flat out tell them I do not advertise in the paper other than a free ad my company puts in there to advertise new listings. It's a waste of money and they know it. Heck, most people don't even get the paper and the ones that do still know it's a waste of money.
Let's be honest, even during 2004 - 2006 the newspapers did not do anything to sell homes. Those homes sold before the ad was even in print.
Here on our little island, if you put an OPEN HOUSE in the paper, and I've done it four or five times, nobody shows. I enjoy the aesthetic of sipping a cup of jo and reading the paper, however, in terms of effectiveness in the business world of today, Newspapers are less effective than ever from my POV.
I have said for years to my sellersthat newspaper ads don't work, and sometimes - depending on the location- I will do an open house ad. However, there is a local paper/Gazette. I tell my sellers I would rather drive down the interestate and throw $250 out the window of my car than advertise there, same result.
Back in the early 90s, the real estate community got so mad at The Washington Post because they would drag down the market, tell people not to buy homes and then expect us to pay big bucks to advertise. Many companies pulled ads and look, we found a different mouse trap? Sometimes the media is not as mighty as they might think. Good post.
Ron - What's with the billboard?
Is that the copy for Ron's next newspaper ad?
Oops, forgot to comment on the post! 3 words - waste of money. 'Nuff said.
Awesome post Paul!! All Realtors nationwide can relate to the complete waste of money that newspaper ads usually are, but the East Valley Tribune was in a class all of it's own. I hate to bash a specific entity, and I do have issues with PNI (or the AZ Republic as it's called), but the East Valley Tribune was a dinosaur in the 90's, and continued its decline.
I am still an advocate of referral business and warm leads, spend money on those who already know you and love you, not ads to attract blind phone calls from someone scanning a paper who can only meet you within the next hour and is leaving town for a few weeks. The buyers scanning the papers and calling Realtors are too often the prospects that a) can't get a loan or b) are so picky they've been looking at homes for over a year! NEXT!
Paul ... thanks for your article here. We stopped buying ribbons for typewriters years ago ... and are moving toward the news media that provides us with the best information. Best wishes. Harrison
Great post, the media is its own worst enemy and if it would wake up, it can also be the answer. But since their business model doesn't react to change very well, all I can say is, sorry to see you go!
My son lives out there currently attending ASU. i have only been out once it was very different from Florida...
Most agents that I know are not using print media anymore. I get emails every day asking for me to advertise in the print media. However, I am more inclined to put my advertisement where the consumers are actually looking . . . online!
Paul - I learned a long time ago that newspaper ads are ineffective and wasteful, although I still (very) occasionally run an ad for an open house here. It generates a little bit, but not much. I can't actually remember the last ad I ran in the Statesman (Austin's paper). I would also be in favor of doing away with the printed version altogether if my mother-in-law didn't enjoy reading it so much. She doesn't use the internet at all.
I have significantly reduced my print media buys with no negative effects. I did change my ad campaign up and no longer do classified ads at all. I do a display ad 2x a week in the classifieds and my rep gave me 75% off the rate card just to be in. They're desperate. And since everyone else just plain cut their ads, I at least stand out in the crowd and look like I'm the aggressive advertiser.
Without evolving and changing, it makes it difficult to be effective. Sometimes you can lead the way by having new and creative ways to market, apparently the print media have refused to adapt and therefore may find their way out the door. I think that is a tedious process to go through print media, far more difficult than using the internet to search for homes. Interesting to me that the marketing professionals for these companies don't/can't/wouldn't see the writing on the wall in the early 90's. Great post.
Newspaper is perfect for wrapping fish or muzzling a rat. You can saunter over to your local bookstore and pick up "101 Household Hints From Remo." I give you the inside dope about most any common item.
Mase! What's up, buddy? You were there. You saw it. That thing was begging for it.
And how did you get the typewriter font in your comment?
REMO - What can I do with this useless keypad now that everything is on non-MLS REO lockboxes?
As much as I enjoy newspapers, I don't think this is going to be a rarity...when's the last time you saw a Town Crier?
Running a special on used ball peen hammers. Bricks are marked down 50% too.
Holding out for 75%, Remo. Only a sucker jumps on the initial sale.
So eloquent, once again. Thank you for saying it so perfectly. Now if only I had the guts to cancel my own subscription to the second rate paper. You're right, the news is all available for free on the internet, even the local trash the trib is known for, but I still can't part with the 'habit' of coffee and the paper in the morning. Maybe in time. Maybe when I see what I waste my subscription dollars are (and yes, I know my subscription doesn't pay for the paper) when they go to a stupid 4 day format. What is that anyway? Keep up the good work, Paul!
Hey Jessica! It is a tough habit to kick. We finally did simply because I couldn't jusfity the subscription given the cuts we are making to the budget elsewhere. I don't really get to sit down much anymore with these two climbing up my leg anyway, so I might as well save the dough. Jim tells me everything is well with you guys, which is great to hear. Maybe we can get the boys together down at Schnepf Farms in Queen Creek? They are holding their Fall Festival now with pumpkins and the whole bit. Meanwhile, I haven't forgotten about looking at cabins up north. Hoping to have some info to send you today or tomorrow. Talk to you soon.
I agree! I have eliminated print advertising as well, and once the power of internet advertising is explained to my sellers, they "get it". I've had NO problem.
Another interesting factor is the clear indication that RE "offices" are going the way of the dinosaur. There is a new business model whereby the agents are working only from home offices, paying less in office fees (much less), and keeping more of their commissions. Floor calls are routed to the agents home office. My Prudential office has adopted this model, with over 200 agents, and it's working beautifully.
Debi