• by Wendy Davis  @wendyndavis, July 29, 2005

Online lead generators will capture half of the estimated $1.8 billion spent on advertising real estate on the Internet this year, according to a new report issued this week by research company Borrell Associates.

Lead generators and aggregators, such as Realtor.com and IAC/InterActive Corp.'s RealEstate.com, typically command between $8 and $15 per lead, stated the report, titled "2005 Update: Online Real Estate Advertising."

Borrell estimated that search engines account for 27 percent of real estate-related online ad revenues ($506 million), thanks largely to Google and Yahoo!, which have "entered this space in a major way," according to the report. "Google and Yahoo! have been working with the large brokerage firms to help them compete with the listings aggregators on search results pages," stated the report, which added that brokerage firms and agents advertise intensively via sponsored search.

Web sites of newspapers, local TV and radio stations, and home magazines such as Trader Publications' Harmon Homes will take the remaining 23 percent of online real estate ad dollars (around $400 million), predicted Borrell.

The report noted that Yahoo! joined the aggregation market last year by joining forces with Prudential Real Estate. Currently, Yahoo! has 2.5 million online listings--but, the report notes, Yahoo! receives only one-fifth as much real estate traffic as Realtor.com, which has just 2.1 million listings. (Borrell relied on Nielsen//NetRatings for traffic numbers.)

Meanwhile, Google has successfully reached out to major brokers, according to the report. Researchers from Borrell found 274 advertisers bidding on Google for the keywords "Charlotte real estate," and 180 bidding for "Denver real estate."