Tanking real estate classifieds represent the leading edge of 2007 ad revenue woes at newspapers, and the boom that went bust, especially in Florida and California, gets most of the blame.
I'm reminded of a second dimension of the problem, non-cyclical and thus more disturbing. Friday's Today Show had a segment, as introduced by Meredith Vieira, inviting viewers "to forget everything your agent has told you." Newspapers were not mentioned specifically, but top of the list was to focus on the Internet because "that's where the buyers are."
The guest, Glenn Kelman, of Redfin.com, an online brokerage, might be considered self-interested in making that case, but not so the source of his claim that "72% of people buying a home now find the home that they are going to buy while they are searching the web." That is from
a survey earlier this year by the California Association of Realtors. I would have expected such a group to be pretty invested in the traditional way of doing things, especially the fee structure. The study said that the percentages had exactly reversed since an earlier study in 2000 when 72% of buyers were traditional, starting their search with print listings.
Online advertsing enthusiast
Randall Rothenberg claims that advertising budgets are lagging the change in consumer behavior in both auto and real estate markets. In the case of real estate, newspaper ads still constitute "proof of service" to the client, but if this is more for show than for results, the business will swing further away from newspapers over time.
So the industry is now in roughly the same spot with real estate advertising as with the sharp decline in jobs listing during the recession of 2001. Some of the losses are cyclical, some, as the analysts say, "secular." Only when real estate rallies will it be possible to sort out what share of this once-lucrative category is gone for good.
