With properties moving slower, brokers are reexamining where to put their marketing dollars.
Some are changing their advertising mix, while others are cutting back on spending. Others are planning to ramp up, as is traditionally the case, once the summer ends.
“We’re spending less on certain things,” said Jorden Tepper, sales director of Manhattan Apartments, “but looking more intensely into what’s effective and shifting the money into those.”
Phyllis Pezenik, sales director of DJK Residential, said autumn should provide the real litmus test of where ad spending will be at for the year.
“August is normally a quiet time in the market,” said Pezenik. “Come September, agents and firms start to put more effort and money into advertising. That’s when we’ll see if they start cutting back.”
Pezenik said it’s important to keep ad spending high in a slowing market. “Especially in a market like this, I don’t see the advantage of cutting back,” she said. “You have to keep your name in front of the public.”
But Paul Purcell, co-founder of Braddock + Purcell, an independent broker referral firm, said brokers may find it hard to pour money into advertising for products sitting longer on the market.
“Advertising represents one of the largest expenditures for a brokerage firm, after they pay their agents,” Purcell said. “With inventory twice what it was a year ago, the firms have to start cutting back. I just heard from one of the top agents in one of the two largest firms in Manhattan that they’re going to clamp down on runaway advertising expenditures.”
Taking it online
Tepper said listings in the New York Times, the biggest recipient of real estate ad dollars in the city, remain a necessary advertising tool. “But,” he says, “they’re not enough.”
A lot of ad dollars have instead shifted online.
“In fact, nytimes.com has probably surpassed the Sunday Times as the number one resource,” Tepper added.
More than 80 percent of people start their search for a home online, according to the Corcoran Group, leading even print advertisers to be mindful of cyberspace.
“Even on the print advertising we do, we like to put the focus on the Web site,” said Corcoran CEO Pam Liebman.
The popular Web site Craigslist, which recently began charging brokers $10 per rental listing in New York, has seen volume on the site drop, so legitimate ads get more attention, Tepper said.
Cliff Finn, director of new development marketing for Citi Habitats, also said more money is now being spent to develop an Internet presence for new condo projects. With new luxury condos opening every day, nobody can afford to scrimp on the Web.
“We spend a lot more money on interactive media for each project,” said Finn. “I’ve done Web sites for anywhere between $16,000 to $50,000. Plus, we have to budget for items we never had before, like keyword buys to get more hits on searches, and Web hosting, animated tours and virtual reality.”
Print still big
Print advertising remains the dominant medium, however, and it’s where branding campaigns are most fully fleshed out and developed.
“We advertise and market real estate,” said Michael Shvo, principal of the Shvo Group, “the same way Mercedes sells cars or Tiffany sells diamonds.”
With interiors by Armani/Casa, the condo 20 Pine The Collection, for example, is targeted to a refined, wealthy audience. Shvo put ads for 20 Pine in the Wall Street Journal, Robb Report, Forbes and Life, as well as Chicago Magazine, D Magazine (which covers Dallas), the International Herald Tribune, the London Times and the Financial Times.
Jade, a Chelsea boutique condominium also marketed by Shvo, is aimed at a younger buyer — it has smaller apartments and interiors by Jade Jagger. Accordingly, Shvo placed ads in W, Details, Interview and Wallpaper. (Both projects were also advertised in The Real Deal.)
Selling emotions
Figuring it takes money to make money in soft or hard markets, some firms invest in elaborate videos costing six figures.
“When you’re trying to sell a $4 million apartment, what’s a hundred grand?” said Arthur Gallego, vice president of communications for the Shvo Group. “It’s such an emotional buy at some of our price points, you need to do that.”
Liebman also said emotion plays a big part in Corcoran’s advertising approach. “We used to sell apartments,” said Liebman. “Now we sell emotion.”
Corcoran spent heavily in a re-branding campaign recently, hiring J. Walter Thompson to design their brand and placing ads in the Times, Town & Country and Vanity Fair and on phone kiosks and billboards.
All this passion is a drastic departure for real estate advertising, which until very recently was too cautious to so much as feature a real live person in their ads.
“It was taboo,” recalls Brey Brownlie, publishing director of New York Living, a luxury residential real estate magazine. “There was never a face on real estate. You didn’t want to exclude anyone so you didn’t include anyone. You just included the facts.
“Now,” she adds, “it’s people, bodies, sex, sweat — everything.”
Buying PR buzz
Still, some brokers, like Michael Chapman at Stribling, take a more laid-back approach to advertising, preferring to let word of mouth sell a project. Of course, buzz costs money.
“I’m a big believer in public relations, especially for small buildings,” he says.
Chapman hired Quinn & Co., a PR firm with a specialty in real estate, to represent the Hit Factory, a conversion of the historic recording studio building in Midtown.
PR aims to get a building a marketing advantage money can’t buy: coverage in the editorial pages. Quinn & Co. won media attention for Extell Development’s Avery, a luxury condo under construction on Riverside Drive, by booking the pop star Seal for its opening party, for example.
By putting event-driven marketing onto the editorial pages, public relations has helped turn real estate into entertainment.
“Everybody’s obsessed by where people live and how they live,” says Brownlie. “It’s not 30 Crosby Street, it’s the Lenny Kravitz building. It’s not 173 Perry Street, it’s the Nicole Kidman building. It’s good gossip.”