According to the National Association of Realtors, in 2004 most realtors spent an average of $1200 on marketing/advertising. What do they spend this on and why?

This is a good question, and the answer is that there are several ways:

• A realtor can always put in ad in the newspaper. Who doesn’t want to read the paper over coffee in the morning, or at least look for the comics? What are the pros and cons of this? One benefit is that you pay a flat fee, one payment and you are done unless you decide to extend your ad. However, how do you know anyone will respond to this ad, and what if many other realtors decided to do the same; if there are too many ads, it can be too overwhelming to the reader and they simply decide to go another route. If no one responds, you are out your money: there is not even a hope for a future pipeline, and you get absolutely 0% return on your investment.
• Bill boards: This is like the newspaper, but it allows you to possibly pull in a wider spectrum of potential viewers. People have to travel and you would hope they were watching the roadway or at least near it. And for those who spend their days in cities like New York or Chicago, there are plenty of buildings to go by that are great ad spots. However, you again run into the same types of pros and cons with the newspaper ad; there is also the additional factor of defamation like spray paint and natural wear and tear.
• Blogs/Online Website: We are a net generation. People like comfort and easy access. By having a blog, or an online website, you could get potential clients from net surfers curious or trying to buy/sell. According to the¨2006 Update: Online Real Estate Advertising¨ report done by Borrell Associates, in 2005, 1.7 billion was spent on online advertising, a figure which is expected to jump to 3.1 billion in 2010.
• Community Activities: A nice way to draw clients in is to always make yourself known in the community (make sure in a positive way). A great way to do this is to sponsor community events. Again this too normally has a one time output cost per event or activity.
• Promos: Try offering a deal like, ¨If I don’t sell your home in X amount of time, I will deduct X percent from my fees when it is finally sold. This can draw them in, but beware of ending up with no commission at the end.
• Referrals: If you do a good job and are personable, hopefully existing or past clients will pass your name on.
• Association: Try getting a partnership with a local moving company in your area. If someone calls them or comes in to get an estimate on moving, they can give your name, or ask the client if it is ok for them to give you their info.
• Lead Provider Companies: According to the Interactive Advertising Bureau and Pricewaterhouse Coopers, in 2006 the amount spent by marketers for lead generation doubled from $753 million in 2005 to $1.3 billion. With lead generation companies, you pay them to give you names of those they find (through internet forms, direct calls, etc) that are possibly thinking of buying or selling. Yes, this can go either way. It is not a sure deal. When people are thinking or wondering about something, they can always change your mind and you will have still already paid for their info. However, at least you got a name with a phone number out of this, a chance. Who knows, if it isn’t a sure deal, at least it could possibly be turned into a future pipeline advantage. Some return is better then none. If at least one of the leads bought is able to be turned into a deal, the ROI would certainly have made it worthwhile.