By: Jennifer Saba A new study on online real estate advertising released Thursday aftrnoon by Borrell Associates finds that newspapers are losing market share to the Internet and that loss is beginning to accelerate. "This year alone, newspapers may lose as much as 2 points," the study said.
The real threat is coming from the very people that newspapers depend on for advertising: agents and brokers. In fact, the study found that sites operated by this group have, on average, 15 times the amount of listings as local newspapers and their respective Web sites.
Another unsettling sign: Forty-five percent of classified managers polled pointed to brokers and agents as their main competition. "This should spell big trouble for newspapers," the report said.
These "customer-competitors" are running sites with free listings. However, brokers and agents are looking for leads, not more free listings. Newspapers derive 56% of their online real estate revenue from listings.
It may seem, from the raw numbers, that newspapers are reaping a lot in real estate ad revenue. Looking closely at the numbers, however, reveals troublng trends.
The study found that "rate increases and inflation are masking actual losses" and many newspaper companies report their online revenues in combination with print revenues thus "bolstering the numbers." For example, McClatchy's total classified revenue was up 8.6% at mid-year, the study said. But once online revenues are subtracted, that percentage declined to 5.1%.
The trend is affecting revenues most at smaller newspapers. Because these papers don't offer significant online advertising opportunities to compliment print, local real estate agents are turning towards national online sites like Realtor.com.
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