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 continuing to advertise extensively. They are also hiring celebrity Brand Ambassadors like Sushmita Sen and MS Dhoni.
As per the estimates of advertising industry, advertising budgets of the realty sector have also grown a third this year. Last year, builders and property firms, including brokerages, spent about Rs 1,400-1,500 crore on publicity, which was roughly 5% of the total advertising revenue of all industries put together.
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.
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.
Most of these companies that Track2Realty approached to declined to comment officially. Though unofficially they maintained that the reason of such advertising largesse is their entry into “Barter Deals” with the media houses when things were too rosy for the sector. Many of these realty companies had big plans across the country and brand driven advertising was their strategy to have capital infusion. In the last three years the cash transaction in advertising has been few and far between. Most of recent advertising deals are necessary sales driven exercise.
Advertising industry agrees to this growing reality in the realty sector. Most of the leading advertising agencies are over cautious in signing up a realty client nowadays. However, Barter Deals with the leading publications, where property is exchanged for advertising revenue, ensures that advertising splurge continues in cash starved realty sector.
