Real Estate Now Second-Biggest Online Advertiser

Edges out automotive, but a correction may be coming

If you're a publisher or other media property enjoying an influx of online ad dollars from the real estate sector, enjoy it now; it may not last.

Despite, or perhaps because of, a housing sector in which the number of intended purchases is at historical lows, the real estate sector in the U.S. is now the second-largest spender on online advertising, after general merchandise retailers and just ahead of the automotive sector, according to data released today by Borrell Associates.

The new data shows that in 2010, the real estate sector spent $20 billion on advertising in total, of which $8.9 billion was online. Borrell projects that total spending by the sector in 2011 will hit $22 billion, of which $9.1 billion will be online.

Looking just at agents and brokers, the shift to online is even more pronounced. Borrell estimates total advertising spending by such entities at around $9 billion in both 2010 and 2011. In 2010 about 64 percent of this spending went online, and that same number is being projected for 2011, according to the research company. For the U.S. as a whole, according to eMarketer, advertisers spent just over 15 percent of their ad dollars online in 2010.

Real estate was one of the sectors most affected by the advent of e-commerce. Why sit in an office to get a list of available properties when you can search online? An aggressive move to online advertising makes sense.

But is this a desperate bid for survival that has gone too far?

Gordon Borrell, the research firm’s CEO, says, “I think they are overspending, which means an adjustment or even a flattening may be coming soon.”