By Frank C. Marino
President & CEO,
The Marino Organization
What will it take for developers and brokers offering new residential units to pry complacent owners out of their existing homes and send them house-hunting?
Inevitably, the most-successful marketing strategies will include a strong “earned media” component.
Let’s take a closer look:
In many respects, today’s market seems to send a message to potential home buyers that there are relatively few incentives to seek a new place to buy and live.
Several factors tend to inhibit homeowners from moving.
First, with housing values steadily rising, many owners seem to have concluded that it makes economic sense to stay put — and reap perceived financial benefit from their domicile’s appreciating value. Second, some homeowners – who might otherwise be eager to sell — choose to hold out for the perfect buyer who pays cash – and may even buy their furniture, too.
Third, many homeowners are happy where they are and are not feeling any great urgency to move. Only something very special will motivate them to move. The neighborhood, the amenities, the finishes and the intangibles will need to be highly appealing to trigger interest.
And fourth, homeowners who consider themselves students of the housing market, may perceive that there are not many available and attractive places to move into today. This impression is reinforced by media reports of super-high sale prices.
On Saturday, we read about a Fifth Avenue co-op selling for a record $70 million, surpassing the prior, $54 million record.
But while price ceilings are rising, potential buyers shouldn’t conclude that all housing is too expensive to afford.
Developers and brokers will thus need to differentiate their product. Prospective customers — including many first-time buyers — will have choices to make.
Moreover, many smaller residential brokers are finding it necessary to cross over into the commercial space.
Even for brokerage giants, exclusive listings are significantly down.
Successful residential brokers will need to position themselves as standouts, and perhaps as much advisor as broker. With differentiation never more important, earned media can make a decisive difference.
Considering these factors, what marketing strategies can developers adopt to get prospects out there “kicking the tires” of potential new homes?
Well, now more than ever, developers and brokers should tap earned media to deliver persuasive messages about their new units’ desirability.
By “earned media,” we are talking about editorial coverage carrying the imprimatur and implicit validation of an objective news editor who deems the information valuable for readers.
“Unearned media,” by contrast, is paid advertising arriving unfiltered by an editor.
While the power and value of earned media are widely accepted in the real estate world overall, residential developers in particular should give fresh thought to investing more into the “earned” side of the equation.
Audiences intuitively understand the qualitative difference between messages about residential quality delivered through a respected and disinterested third party – i.e.,
the editor of a daily newspaper or trade publication – versus those appearing in a paid ad.
Study upon study have concluded that earned media is worth every penny it costs.
Plus, in the digital age, editorial placements no longer deliver only one-shot impact. Validated messages reappear repeatedly. Today, virtually all earned media has a permanent shelf life, with endless links and pass-alongs, perhaps comparable to the infinite images cascading throughout an amusement park’s “house of mirrors.”
As founder of a 21-year-old public relations agency specializing in all segments of the real estate market, we are not dismissive of advertising. We often help mount integrated marketing initiatives for clients representing not only real estate but also energy, higher education, financial and professional services, and other sectors.
These campaigns comfortably weave together public relations and advertising. We embrace the role advertising plays in a full-spectrum communications campaign.
Yet worldwide, the level of trust in advertising has been on the decline.
In April 2012, Nielsen’s Global Trust in Advertising Survey collected responses from more than 28,000 online respondents in 56 countries. While 47 percent reported that they trusted paid television, magazine and newspaper ads, their confidence has been diminishing. It had declined by 24 percent, 20 percent and 25 percent respectively since 2009.
Also, when evaluating online advertising in particular, developers and brokers should be wary. Thanks to digital tools like bots that inflate the reported volume of ad visits, some studies estimate that more than third of these ostensible views are in fact “witnessed” by non-humans.
Housing developers and their brokers function in an inventory-constrained environment where many potential house-hunters are happy to stay home. When bringing new product to market, it makes sense to use the most potent tools to animate potential customers.
Earned media generated through a smart and well-integrated public relations program, is just such a tool — and brings the benefit of third-party validation that will hasten sales.