Member log in

Real estate industry's move to digital marketing speeds up

Walk past any real estate office and you will probably see a couple of wire-framed baskets chocked full of the latest copies of the local property magazine – in Auckland these tend to be for Property Press, the Herald Homes and then there are some other local options and usually these days a Chinese language real estate magazine.

I don't need to procrastinate on the visual pollution these create on the high street or the lack of value they represent, nor the fact they never seem to diminish in number of copies until the next week's edition rolls in. The fact is, the world over, real estate marketing is going digital – it's only a matter of time before we see fewer of these publications cluttering up our footpaths.

The scale and pace of this transition is something I am often asked about when providing advice and consulting to businesses. I hold a fairly detailed and what I think is accurate picture of this for New Zealand. So it was with great interest whilst reading the prospectus for the IPO for Zoopla Property Group, the operator of the UK property portal Zoppla, that I found data for the UK market on just this subject.

Quoting from the report:

“According to Ender’s Analysis, total UK classified property advertising spend was £389 million in 2012,
comprised of a 45% and 55% split between digital and print advertising, respectively”
– Zoopla Property Group prospectus (page 48) - June 2014

It is anticipated that during the current year in the UK year the total spent on digital marketing by the real estate industry will for the first time exceed that spent on print advertising. In total the UK real estate industry will spend  £427 million on advertising this year. The future trend estimates for the next three years clearly show an accelerated divergence between print and digital with digital set to grow by 50%.


In New Zealand the makeup of the spend by the real estate industry is somewhat different. Print media has done a laudable job of defending its position and, through its relationship with the major franchise groups, has constrained the digital media spend to less than 20% at this time, although it is, like the UK forecast  to grow significantly in the coming years in my estimation. It is, though, not expected to exceed the print media spend in the next three years.

Clearly the drive for the cannibalisation of the print media across the globe holds the prospect of a significant pot of gold for the challenging companies in each country which more and more these days are publicly listed companies of significant value; be that Rightmove and Zoopla in the UK, Trulia and Zillow in the US or REA Group and Domain in Australia. Each is fighting for an ever greater share of the cake of advertising dollars of its customers – the real estate agents of each respective country. In New Zealand we have the challengers of and Trade Me Property – a duelling pair, although the pot of gold for which Trade Me aspires may not be the same reward sought by as an industry-owned portal.

Comparing such data of advertising dollars between countries is hard to undertake unless some benchmark can be established. For this analysis I have chosen to index the NZ and UK real estate digital marketing spend by an index to the number of property transactions in New Zealand dollar terms. Presented below is this analysis showing the extent of advertising spend per country over the past seven years per property sale. In the UK total property sales over this time peaked at 1.23 million in 2007 before falling to 616,000 in 2009. In New Zealand over the same period sales peaked at 92,000 in 2007 before falling to a low of 56,000 in both 2008 and 2010.

It's interesting to see the New Zealand real estate industry spends more per sale than its UK counterpart. The relative difference in the digital spend is staggering – a two and a half times factor. It makes the whole discussion around the relative cost / value of a charge of $159 per listing from Trade Me seem a bit moot!

The other point to note in this index comparison is the fact that the total of $NZ1065 spent per property sale by the UK real estate industry comes straight out of agents' commission margin where average commissions on sale are near 1.5% whereas New Zealand agents who charge about 3% commission on sale price secure an average of $200 a sale of vendor marketing contribution to offset their average spend of $NZ1244.

Former chief executive Alistair Helm is founder of Properazzi.


Comments and questions
6 has been putting about 80% of its vendors marketing costs into digital marketing for several years because that is where 80 to 90% of genuine buyers look for property. The display advertising you see in the print media is more about agencies and sales people promoting themselves to people who are thinking about selling in the near future at their vendors cost.

So the conclusion from reading this is that the value provided by engaging a Real Estate Agent is reducing. More people should be using electronic media and selling their home themselves. You need a professional photographer. Enquiries generated from the media. Who knows better how to promote your homes features and benefits at an open home or showing people through. 3% commission and marketing costs on top is a rip off. These stats confirm as a solution for selling a house its not the best option.

Dave you are correct in my view re your comments of the value a agent provides for residential sales ( commercial is a completely different kettle of fish) is declining.

For many agents and still is in my view print marketing is more about promoting the agents branding and name than getting top results for the client.

The question to ask from sellers to their agent is what do you bring to the table, what value do you add and why advertise in print medial when there is strong independant evidence to suggest digital marketing on its own will achieve the same result.

Agents and I was one all be it a commercial one for over 25 years were in my time brainwashed and taught parrot fashion over and over again until you had your lines known off by heart before being set loose on the seller, to sell vendor contribution marketing so as to give the agent and the company free branding and exposure.

The industry then did a wonderful job of selling.

Then when it started to wane the focus went on auctions.

It was all about perception Dave and working on the theory that the seller and the public are gulliable.

Thank heavens the new Act 2008 coupled with the internet has changed much of that attitude. In my humble opinion there are still some radical changes needed ie having a true buyers agent who works solely in the interest of the buyer.

The simple fact is selling your property is not rocket science.
If you were that way inclined one could sell their own property, even by auction, and using a solicitor and achieve the same result as a agent for a hell of a lot less fee.

I recognise that is not everyones desire and partly to blame is this perception and misconception that without a agent you will not achieve a maximum price.


Agents have never had exclusive rights to print or electronic media. The cost and method of reaching the target market has come down because electronic media is more cost effective, timely and convenient for the target audience.

People are continually becoming more and more time poor. It takes a lot of time running around looking at open homes so people get to the point of having a list of potential properties that may meet their needs and then try and remove properties from that list without having to get in the car and go and see them.
A full video tour is the next best thing to being there hence it makes the search process easier and more convenient for the time poor.
It's also handy for offshore buyers to view a property and make a buying decision.

200 Square is the middle ground - online advertising, print if you really must, but an agent to do the negotiations, contracting and so forth. We've seen this industry spend on print with bewilderment and are happy to offer much lower commissions.
I'm a shareholder & director.