Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Real Estate Ad Worries: Is the Category Due For a Fall? (Dinosaur Media DeathWatch™)
Editor & Publisher ^ | August 25, 2006 | Jennifer Saba

Posted on 08/25/2006 12:30:47 PM PDT by abb

NEW YORK Classified real estate revenue has been the one saving grave for newspaper results over the past several quarters yet Wachovia Equity Research Senior Analyst John Janedis believes the category will soon show cracks.

In a report released this week, Janedis notes that real estate advertising has “dramatically increased its share of total newspaper advertising” jumping from 6.5% in 2000 to a forecasted 11.3% in 2006. In 2005, the firm estimates that the category contributed $1.4 billion to the companies in Wachovia’s coverage universe.

Thanks to real estate revenue, many companies have been able to report low to mid-single digit overall ad growth as opposed to flat or down.

The category also outperforms Internet ad revenue in terms of contribution to overall growth -- real estate classifieds (print and online combined) represent twice the amount of revenues, according to the report.

If the category falters, which is forecasted, it could seriously impact overall revenue and earnings per share. “A decline in 2007 could further weigh on newspaper ad growth, assuming other important categories like autos, movies, and department stores do not recover, or help wanted deteriorates further,” he wrote.

While many companies have recorded double digit increases in the category over the past six to seven months, they are starting to hit difficult comparisons.

The companies in Wachovia’s universe most exposed to any downturns in real estate advertising are The New York Times Co., Journal Register Co., Tribune, and McClatchy. “On average for the group,” the note explained, “every 5% change in real estate revenues is equivalent to a 0.7% change in EBITDA.”

Jennifer Saba (jsaba@editorandpublisher.com) is associate editor at E&P.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: dbm; newspapers
Friday Afternoon Good News
1 posted on 08/25/2006 12:30:49 PM PDT by abb
[ Post Reply | Private Reply | View Replies]

To: abb
Raoul's First Law of Journalism
BIAS = LAYOFFS

2 posted on 08/25/2006 12:31:14 PM PDT by abb (The Dinosaur Media: A One-Way Medium in a Two-Way World)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PajamaTruthMafia; knews_hound; Grampa Dave; martin_fierro; Liz; norwaypinesavage; Mo1; onyx; ...

Ping


3 posted on 08/25/2006 12:31:47 PM PDT by abb (The Dinosaur Media: A One-Way Medium in a Two-Way World)
[ Post Reply | Private Reply | To 2 | View Replies]

To: abb

I think the dinasaur media and newspaper bubble is about to burst.


4 posted on 08/25/2006 12:32:28 PM PDT by Always Right
[ Post Reply | Private Reply | To 1 | View Replies]

To: Always Right

Somebody alert George Soros: here's another use for his billions.


5 posted on 08/25/2006 12:36:20 PM PDT by BelegStrongbow (www.stjosephssanford.org)
[ Post Reply | Private Reply | To 4 | View Replies]

To: abb

The Denver Rocky Mountain News and Denver Post, which are actually the same paper after a merger, raised classified rates by about 150% after they merged. Now, instead of 35 real estate adds relating to a particular part of the metro area, there will be 7 to 10.

The math is easy to do.


6 posted on 08/25/2006 12:43:47 PM PDT by SaxxonWoods (Free Iran! WARNING! Forbidden Cartoon: .. . *-O(( :-{>. . . .)
[ Post Reply | Private Reply | To 1 | View Replies]

To: abb

Actually, the real estate company that I work for has started this year to reduce the amount of newspaper advertising because it just isn't effective. Most of today's buyers start out on the internet. In fact, last year our company setup special phone numbers for newspapers ads only to track calls on individual listings. It was surprising (or maybe not) that hardly any calls came in on those numbers.

In a recent meeting, our VP of the company mentioned that in the Chicago market, 80% of the ad revenue at one point for the Chicago Tribune was from real estate related advertising. According to him, a lot of the companies have pulled out of newspaper advertising in that market and seriously impacted ad revenue for the Tribune.

Interesting stuff. I would have thought car ads would have been just as high of a percentage of total ads.


7 posted on 08/25/2006 12:45:00 PM PDT by dubious1
[ Post Reply | Private Reply | To 1 | View Replies]

To: dubious1

A little over 3 years ago, our son and dil listed their home for sale in a very hot market. The sign went up and the flyers were in the box. They had nothing for about aweek. The realtor was pushing for an open house that weekend, and our son and DIL weren't that excited about an open house.

A realtor friend, who knew that market said the agent there was probably playing games and hadn't listed the house on the internet and "missed" the weekend real estate ads. Their house wasn't on the internet.

We notified our DIL, and she went after the agent and told the agent, she had 24 hours to get the house on the internet or their contract with her was cancelled. Then our DIL called back and told the agent, she wanted their home listed on the internet before the business day ended.

It hit the internet that night, and they had several interested people who saw the house over the weekend, and they had a mild bidding contest from them to buy the house. The ad didn't appear in the local fishwrap that weekend.

They didn't have an open house and will never use that agent again. That area and the buyers are computer and internet oriented, and many if not most of those now living in the area don't subscribe to the Frico Gayrhonicle nor the local fishwrap.


8 posted on 08/25/2006 12:58:55 PM PDT by Grampa Dave (There's a dwindling market for Marxist Homosexual Lunatic lies/wet dreams posing as news.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: dubious1

Car ads are leaving newspapers in wholesale numbers, too...


9 posted on 08/25/2006 12:59:49 PM PDT by abb (The Dinosaur Media: A One-Way Medium in a Two-Way World)
[ Post Reply | Private Reply | To 7 | View Replies]

To: abb

The local and bigger dinosaur fishwraps are taking it in the shorts with lowered apartment ads. Craig's list is devouring them.

Car, truck, rv and boat sales are going to the internet instead of ads placed by individuals.


10 posted on 08/25/2006 1:00:46 PM PDT by Grampa Dave (There's a dwindling market for Marxist Homosexual Lunatic lies/wet dreams posing as news.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: abb

When I sold my house in California, I ran an ad in the newspaper for it. It had just two lines:

2 br 1 ba cottage
www.myhouse.com (not the actual URL)

The newspaper charged me double for the ad because it had a URL in it. I thought that was pretty funny.

I did an entire website for the house. I ran the ad, starting on Wednesday, for three days. I had over 50 people come to the open house, and sold the house on Sunday to one of the visitors. I got three other offers for it, as well.

But the newspaper thought they were getting at me by charging me double. Silly newspaper.

I also bypassed the real estate brokers, selling the house myself and letting the title company handle all the paperwork. Saved myself a few percentage points.

When the house went into escrow, my wife and I invited the buyers over for dinner. Very nice young couple. We still stay in touch, and they have our wedding picture hanging next to the front door.

Not all real estate deals have to be nasty.


11 posted on 08/25/2006 1:13:28 PM PDT by MineralMan (Non-evangelical Atheist)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MineralMan

When I sold my house in California, I ran an ad in the newspaper for it. It had just two lines:

2 br 1 ba cottage
www.myhouse.com (not the actual URL)



I did the same with an SUV. Short ad, URL (I bought a good, short domain), and lots of gorgeous photos and description at the site.

What really cracks me up is that the papers are giving away their content for free on the net.


12 posted on 08/25/2006 1:18:09 PM PDT by Atlas Sneezed (Your FRiendly FReeper Patent Attorney)
[ Post Reply | Private Reply | To 11 | View Replies]

To: Beelzebubba

Yeah, and they still can't compete with Craigslist. I've run a lot of ads on Craigslist, both selling and looking for stuff. Super effective. I quit using newspaper classifieds altogether. They're a waste; they're expensive; and craigslist gets results for nothing.


13 posted on 08/25/2006 1:22:21 PM PDT by MineralMan (Non-evangelical Atheist)
[ Post Reply | Private Reply | To 12 | View Replies]

To: MineralMan
Indeed, Craigslist is THE major reason why newspapers are taking a beating--the newspapers' biggest source of revenue, advertising and classified ads, are quickly vanishing as people with online access can find, buy, and sell things faster. Indeed, why do you think the big real estate companies like ReMax and 20th Century are putting up web sites for house buyers to peruse?
14 posted on 08/25/2006 1:28:34 PM PDT by RayChuang88
[ Post Reply | Private Reply | To 13 | View Replies]

To: dubious1; Grampa Dave; MineralMan; Beelzebubba; RayChuang88
It pays to get off the beaten path. A plain old search returns more hits for me than craigslist or any other online site. You typically get lots of photos along with lots of documentation about the property.

Proud member of the Dinosaur Media DeathWatch™ Crew of the FReeping Parasitic Information Gatherers Brigade.

15 posted on 08/25/2006 7:57:11 PM PDT by Milhous (Twixt truth and madness lies but a sliver of a stream.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: abb

Yeah, but most of these car and real estate sites are owned by newspapers.


16 posted on 08/29/2006 3:28:24 PM PDT by mom4kittys (If velvet could sing, it would sound like Josh Groban)
[ Post Reply | Private Reply | To 9 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson