• by Jack Loechner , Staff Writer, August 17, 2005

According to the Borrell Associates' 2005 Update: Online Real Estate Advertising, the Internet has evolved into the most powerful consumer research tool in the entire process of soaring real estate sales. At any given time, the report says about one percent of the adult population is actively seeking a home that they will purchase within the year. In April, nearly 20 percent of the population had visited a real estate site.

Despite the excitement, overall real estate advertising has been sluggish. This year Borrell is projecting that $11.4 billion will be spent, up just 2.2 percent from last year. Inside the numbers, though, a major shift continues to erode the traditional advertising foundation of newspapers, homes magazines, direct mail and directories, while the online segment gobbles up share.

This year's online ad sales will hit $1.8 billion, for a 15.7 percent share of ad dollars. If the trends continue, by 2009 the online media share will surpass that of the long-time leader, newspapers. Online advertising spent per home sold has already reached $210, more than one-third of the newspaper ad spend.

Paid listings on real estate search pages have exploded, as competitors are paying well over $1 for a single click, and as much as $6 in some cities,  to lure potential home buyers to their sites. This year real estate advertisers will spend more than $500 million on paid search listings. This form of advertising didn't even exist three years ago, notes the report.

New leaders within this online business are those who are paid for performance to generate leads, drive traffic and help their advertisers manage the process.

Go here for more information and the full report.