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Despite Crunch, Realty Sector Splurges on Ads


Despite Crunch, Realty Sector Splurges on Ads

Last updated: June 18 2011
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  • Despite Crunch, Realty Sector Splurges on Ads

    Home sales are down, cash flows are drying up but builders just can’t cut on advertising. Instead, advertising spends of the real estate industry is growing at 30% year-on-year, say admen, with top builders such as Hindustan Construction Company, Omaxe, Amrapali, Jaypee, Indiabulls, Lodha, ATS and DLF continuing to advertise extensively.

    “We are spending about . 50-70 crore on advertising every year. We have 40 projects and we need to spend on advertising to create brand visibility,” said Shiv Priya executive director Amrapali Group. The company has roped in MS Dhoni as the brand ambassador and also associated itself with Chennai Super Kings as a sponsor in the fourth season of Indian Premier League.

    Advertising budgets of the industry have also grown a third this year. Last year, builders and property firms, including brokerages, spent about . 1,400-1,500 crore on publicity, which was roughly 5% of the total advertising revenue of all industries put together, a back of the envelope analysis by one adman who did not want to be named said. Data collated by AdEx India— a division of TAM Media Research, which tracks advertising expenditure, indicate that print and TV advertising by real estate companies grew by 64% and 21% respectively in 2010 compared to 2009, Ad industry professionals say that the realty segment may emerge as one of the top ten categories in spending in 2011.

    Anita Nayyar, chief executive of media buying firm MPG, said that ad spends of real estate players picked up from mid-2010 primarily because the players managed to clinch attractive deals. “Realty companies were compelled to increase ad spend as they had large inventories to sell after the slowdown,” she added.

    In the top metros like Mumbai, NCR-New Delhi, Bangalore, Chennai, Kolkata, Pune about 12-25% of the residential units built were unsold in the first quarter of this year as per estimates by Jones Lang LaSalle India.
    Real estate was among the top ten spenders during the boom days of 2007 and 2008, but slipped during the slowdown with the companies cutting their ad spends to control costs.

    “Though real estate ads have picked up compared to last year, they are yet to reach the peak level. This is especially true of newspaper advertising, which slumped when real estate players tightened their ad budgets,” said Rohit Ohri managing partner JWT India

    Outdoor advertising, popularly known as billboard, has followed the trend of overall real estate advertising. “While billboard bookings have picked up, we have not managed 100% bookings. Due to the existing vacancy levels, the ad rates are now available at 20% discount from a discount of 40% offered during the slowdown,” said Noomi Mehta, managing director, Selvel Vantage. The company has around 12,000 billboards across India and has seen revenues from the category dropping to 10% compared to 20% in 2007-2008. Agencies like JWT have adopted a wait and watch approach before entering into the real estate advertising business again. “We are cautious about taking on any real estate clients as it affects the financials negatively,” said Ohri. The company had earlier worked with Unitech for five years, but has disassociated itself with it post the slowdown.

    Though the strategy behind increasing advertising spends may differ from realtor to realtor, all have a common end — building brands and catalysing bookings for upcoming projects. Realty circles also attribute the surge in ads and promos to a need to differentiate projects from that of their competitor. “Brand positioning is the need of the hour in an increasingly cluttered but booming real estate sector,” said Harshavardhan Neotia, chairman of the Kolkatabased Ambuja Realty group. Prasoon Joshi, chairman at McCann Worldgroup India too seconds Neotia’s view adding real estate companies have started treating projects as products. “Real estate companies have, however, never been a consistent client for us as the sector is very unorganised,” said Joshi. McCann is currently associated with IREO for some real estate projects in Delhi.

    Little wonder, promotions are moving beyond print media, TV, billboards and radio. Unconventional media tools like the Internet and transit media (such as plastering a bus with an advertisement) are being used to communicate to prospective clients. Realtors are also betting big on events and sponsorships as alternate platforms of brand building.

    Shripad Kulkarni CEO Allied Media Network said,“ The growth in media spends by real estate players is across the country though skewed to the metro centres .The category spends heavily on print–as the projects are local in nature and advertising is necessarily response based. But all the players have increased their spends on internet.”

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    With no control on the non factual matter put in most ads by Builders, this looks to be an easy method to attract customers . The sweeter the promise of the honey, better r the chances of attracting flies .
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  • #2


    Re : Despite Crunch, Realty Sector Splurges on Ads

    u should have seen some months back, just when Balwa was arrested, he had painted the town red with DB Reality boards. The entire Mumbai necklace from Colaba to Walkeshwar, Sea Link, Worli sea face was all full of their boards.


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