Peter Kafka

Recent Posts by Peter Kafka

No Surprise: Real Estate Ads Shrink From the Web. Big Surprise: Real Estate Ads Are Still Growing.

housingNot surprising: The battered real estate industry will spend less money on Web ads  this year.

Quite surprising: The battered real estate industry will spend more money on ads in general this year.

Wait a minute: Aren’t ad dollars supposed to move from every other venue to the Web? And aren’t battered industries the ones that are supposed to move the fastest, since they’re the ones most in need of the Web’s efficiency?

Not in this case, says research firm Borrell Associates, which predicts that the real estate industry’s spending on Web ads will drop four percent in 2010, while its overall marketing spend will increase by two percent. ClickZ:

Colby Atwood, president of Borrell, said that real estate advertisers–typically among the more savvy of display clients–are moving away from Internet advertising in favor of more cost-effective channels, like promotions and direct marketing, and are not expected to come back in any significant way.

“Advertisers across the board are beginning to flatten out the amount of money that they put into advertising per se, and they are increasing their investment in promotions,” he said. “Once companies learn about how to contact an individual, if they’re savvy, and many of them are becoming this way, they remarket directly to that individual using e-mails and other directed forms of promotions.”

I haven’t seen the full report (I’ve asked Borrell for a copy), but I’m assuming that Borrell’s projections distinguish between different kinds of Web advertising.

For instance, I’d be very surprised if spending on search engines like Google (GOOG), which ought to be as cost-effective as any direct marketing campaign, is shrinking; I can definitely see general display ads withering though. I’ll update if I get more.

[Image credit: infrogmation]

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work