Advertising Strategies for Today's Housing Market

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Advertising Strategies for Today's Housing Market

When times are tough, smart advertising is the key to keeping sales momentum.

In today’s soft housing market, builders are often tempted to cut their advertising budgets. But some professionals say this is the wrong approach, insisting that a slow market is one of the best times to get your message in front of prospective buyers.

"When real estate sections were thick with ads, it was easy to get lost in the crowd," says John Gumas, president of San Francisco-based Gumas Advertising. "Now, it’s easier for prospective buyers to find you. Builders who did not panic [and did not cut their budgets] will be in great shape when we come out of this slump," he says. "Advertising is a momentum thing. If your competitors lose their drive, it will take them awhile to get it back." Companies that maintain their advertising presence will enjoy more market share and name recognition.

The key to maintaining that energy is deciding on the right message and mix of advertising.

The message

When you grab buyers’ attention, it’s important to impart the right message. Announcing big price cuts and outlandish incentives shout "desperation." Instead, show prospective buyers that what you have to offer is more attractive than a discount.

"You have to find a niche, real or perceived," says Rich Elkman, president of Delray Beach, Fla.-based Group Two Advertising. "And you’ve got to differentiate without losing sight of your target market."

For Machin Design Builders, based in Palm Bay, Fla., the target market is the minority of buyers who aren’t so affected by price. Its advertising stresses exclusivity and includes the tagline, "Extraordinary Homes for the Fortunate Few." The company sets itself apart from builders with excess inventory by boasting that "only a limited number of these remarkable homes are built each year." To remind buyers how much they’ll be pampered, Machin spikes their message with such phrases as "there is no such thing as a trifling detail."

At the other end of the scale is Western Michigan builder Allen Edwin Homes, which targets cost-conscious Midwestern home buyers. Its message is "We Value What You Value." The company’s ads center on squeezing the most out of every dollar, says David Miles, president of Denver-based Milesbrand, which developed the ads and coordinated them with the builder’s signage, brochure and Web site. The message says this builder understands what is important to these home buyers, and shares similar feelings. "The result has been six consecutive months of the best sales in the company’s 12-year history," Miles says.

The mix

No standard advertising mix is right for every builder’s community, but it should always include an online presence. Up to 80 percent of prospective home buyers start their research on the Internet, so all of your advertising should drive prospective clients to your Web site.

The real estate sections of newspapers generally cost more than they deliver, given their declining readership, but they should still be a part of the mix. That’s because the two sources prospective home buyers go to for information about buying a house are newspapers and the Internet. If you need to cut back somewhere, run smaller or less expensive ads that direct readers to your Web site.

In February, we asked where you look first when you want to save money on a specific project?

Over 41% answered changing floor plans and designs as the number one choice.

Results are:

Changing floor plans and designs
Appliances and fixtures
Building materials and lumber
Labor (either staff or subcontractors)
Sales and marketing

Thank you for participating in our online poll.


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