Is Traditional Marketing Dead?

I wouldn’t call the time of death just yet but I do wonder how much longer traditional marketing will be able to survive.  The vital signs are not promising for the old lady as her heart rate is sinking ever lower to a critical state.  The heart rate of course being the amount of consumers utilizing traditional marketing tools to find their next apartment.  It’s no secret that more and more people every month are throwing out their Yellowbooks, cancelling their newspaper, and completely disregarding radio and television ads.  This is an alarming fact for the managers that are stuck in the old way of doing business and are not preparing themselves for the inevitable.

The great redistribution of leads has already been started but I’m afraid that it is only the beginning.  Since the inception of the internet (thank you Mr. Gore) consumers has steadily increased their reliance on the web for the research and finding of goods and services.  While the real estate industry has typically been a slow mover in the field of technology it is definitely coming around.  This change is not being driven by the industry but, as with all positive changes, by the market.  Consumers want to find out as much information as possible about a product from the comfort of their own home without talking to someone as possible.  Apartment shoppers are not different than TV or car shoppers; they are going to do their homework.  Homework as in at home – get it?

Today over 50% of apartment seekers that are staying in the same metro area start their search online.  Over 70% of people moving to a different metro utilize the internet to search for their next apartment.  It used to be that only the younger generation was using the internet while the older generation was flipping through the yellow pages and newspaper.  But that’s not the case anymore, the above 40 crowd of online apartment searchers is growing at a rapid rate as well.

The industry experts all agree that online marketing, much like newspapers have been for so many years, will be the norm.  The S-Curve, an economic theory, explains why.  The S-Curve simply states that the amount of time it takes a new product or idea to go from introduction to 10% market penetration is equivalent to the amount of time it takes the same product or idea to go from 10% to 90% penetration.  Online shopping is currently at about 7% of the national GDP and it’s taken about 12 years to get there.  Forecasts show that it will be at 10% in the next couple of years.  Therefore, we can expect online sales to skyrocket in the next 10-15 years.  It’s logical then to deduce that apartment shoppers will follow the same path.

Just look at the amount of monthly unique visitors for apartment search websites:  Rent.com – 2 million, Apartments.com – 1.4 million, ForRent.com – 1 million, MyNewPlace.com – 1 million, ApartmentGuide.com – 900 thousand,Move.com – 900 thousand, Rentals.com – 800 thousand.  Sites specifically designed for renters to rate and review their apartments are also very popular.  ApartmentRatings.com for instance boasts around 600 thousand unique visitors monthly.  This site is especially important for managers as any potential tenant can see what current and past tenants think about your property.  It’s hard enough selling your property over the countless others without fighting negative criticism so be sure to check this site often and so what you can to keep your feedback positive.  You can setup a manager account on ApartmentRatings.com so you can respond to tenant reviews and ratings.

Yes, apartments are different than electronics and consumable goods but it doesn’t change the fact that more apartment seekers will continue utilizing the internet to find their next place.  I personally know people that have signed a lease without ever seeing the place in person.  They were able to do adequate research to satisfy their needs, applied online, and even signed the lease online.  While this is abnormal today, what’s to say that it won’t be the norm in the future?  All of the data certainly points to this conclusion.

Whether or not you are convinced by short blog is not of consequence.  What is important to you is what are you going to do about it?  Just to be on the safe side you ought to at least get a website for your community, start a blog, get a Twitteraccount, and probably a Facebook Fan Page.  I will discuss the importance of all of these facets and how to implement them in the future but for now wrap your head around the importance of online marketing.  Check out our Twitter account (@thepimco) and Facebook Fan Page for an idea of how to get started.  Remember, I’m new to this company and am just getting these strategies implemented for PIMCO myself.  Although, my residential real estate investment company utilized these avenues with great results.

I suggest watching this hour long webinar featuring Lisa Trosien.  Lisa is an industry expert on apartment marketing and management.

Don’t get me wrong.  I’m not saying that advertising in the newspaper, radio, and tv are a complete waste of resources.  I’m simply saying that they are progressively getting less efficient.  They do still work for a target market but that target is getting smaller and smaller.  I would suggest digging your well before you are thirsty as the traditional target will soon be so small you won’t be able to hit it with a shotgun from 10 yards out.