RealEstateEconomyWatch.com

Contrary to expectations, real estate advertisers will spend less on-line in 2010 and a great deal more on newspaper advertising.

For the first time in history, real estate companies-brokerages, builders, management companies and developers-spent more online than on print last year.  That advantage will continue this year, but newspaper advertising will roar back as on-line continues to fade.

Real estate advertising as a whole declined 20 percent last year, from $24.4 billion to $19.6 billion, according to a new report from Borrell Associates.  “We’re forecasting a mild bounce back in 2010 at 3 percent growth,” the report predicted.

The new spending, however, won’t go to the Internet but to newspapers, which have become remarkably cost effective. Newspaper real estate ad spending is projected to rise 16 percent in 2010, to $4.4 billion, after falling 34 percent last year. At the same time, online real estate ads will fall again to 4 percent, following a 1 percent decline last year.  The real estate category accounts for 19 percent of all Internet advertising.

Several factors account for the shift.  Generally, this year media segments that have generally been perceived as weak-such as newspapers and broadcasting-are set to do better. Also, local real estate advertisers have been increasing their spending, and they using cost-effect4ive print.  Many brokers are reducing their on-line costs by shifting from more costly display ads to cheaper paid search programs.

Despite the drop off this year and last, Borrell said online will continue to be pivotal to real estate ads and real estate spending will continue to be a major force in interactive ads. As Borrell points out, three of every five online ad dollars are currently spent by real estate agents and brokers. Real estate companies the bulk of their spending on “direct” online or e-mail campaigns - including, these days, a growing use of social networks.

More and more real estate advertisers are forgoing both the Internet and newspapers for promotions, contacting individuals directly through e-mails and other tactics.