IF FRED ROTHMAN HAD USED THE STANDARD measure—1 percent of selling price—to create a marketing budget for Wyndsong Isle Estates, a $50 million project in Boynton Beach, Fla., he would have had about $500,000 to spend to promote the community. It sounds like a lot of money, but in reality he could have dropped 10 percent of that amount in one day buying full-page ads in the weekly real estate sections of The Miami Herald, the South Florida Sun-Sentinel that cover his market. Since he only had 47 lots available, it didn't make much sense to put a message in front of more than a million people.
Instead, Rothman focused his efforts on appropriate signage, direct mail to the surrounding community and his existing database, and some small advertising in the New Homes Guide. “All cost-effective means of getting the message out,” says Rothman, president of Paramount Residential in Boca Raton, Fla.
All the marketing materials directed prospective buyers to register on a Web site. They couldn't call in to register, so Rothman didn't need anyone at the office to answer phones and take names. Once registered, all the prospects received weekly e-mail updates. By providing them with detailed contractual information they were asked to sign and return, Paramount was able to narrow down a group of 300 prospects to 30 serious buyers who were invited to the presales opening.
On that first evening of sales, 26 deals were signed. From there, Paramount's sales team went back to the prospects who had registered on the Web site to sell the remaining 21 lots, which sold in 30 days. The marketing costs for the entire community were less than the cost of one ad in a newspaper's weekend real estate section.
“I could close the sales office and move the salespeople to other communities,” Rothman says. “The layer of savings is outstanding.”
Across the country, builders are reaching a similar conclusion: Traditional newspaper real estate section advertising isn't cost-effective. Few of the readers will be qualified prospects, and the price continues to go up.
“Their rates are so high you're paying to reach 10 to 20 times the real readership we need to reach,” says real estate marketing expert David Hoke, a partner with Nashville, Tenn.–based BLF Marketing. “If you're a small builder in a large metro market, you're paying for a much larger amount of numbers than is necessary.”
To bring out a crowd for a grand opening, Hoke says, the best medium is radio, which reaches people in their cars, at home, and at work, and even while they're on hold.
When it's a targeted message to a narrow group of prospective buyers or a specific offer for a slow-moving community, Hoke says the best use of marketing dollars is direct marketing, including broadcast e-mails, direct mail, and invitation-only events. And don't limit your marketing to traditional media: Consider low-cost alternative mediums such as bus stop ads and vehicle wraps.
Here is some of that wisdom from builders who got tired of the high price of newspaper advertising: