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The Marriage of Radio and Real Estate – for Better or for Worse

May 16, 2013

In 2008, the U.S. real estate market tanked, and took the U.S. economy with it. Radio, like many other industries, suffered as home sales came to a halt. Spending in many sectors of our economy slowed to a snail pace.

2012 saw the start of what many believe is a rebound in the housing market. According to the Commerce Department, new home sales rose nearly 20% in one year, and are at their highest level since 2009. New homes, just 20% of the entire housing market, are an important driving force for the economy. Like new homes, the existing home market is also on a rebound. Existing home sales were up 9.2% and at its highest point since 2007 (National Association of Realtors).

So as radio folks, why do we care? According to the Commerce studies, new home starts account for a disproportionate impact on the economy. Home starts mean construction jobs. According to the National Association of Home Builders, each new home creates three jobs for a year. More jobs results in more buying power by these workers.

However, the economic impact is more than just employment. Many sectors rise as new home construction climbs. Below are just some of the categories that are ripe for increase in ad revenue.

Banking: New home sales means mortgages. Banks and other financial institutions need to get the word out to these new home buyers that they are the right place to finance that new home. This category is especially important to the neighborhood bank with local roots.

Insurance: As real estate dried up, more insurance advertising focused on auto insurance. As home sales climb (new and existing), these organizations will put more focus on home insurance. This was already apparent in 2012.

Home Improvement: While some may consider this a B2B category, the amount of product that goes into a new home is massive. What contractors and builders spend at home improvement stores will dwarf what general consumers spend. From lumber to appliances, home improvement stores want to reach this focused consumer group.

Home Furnishing: New homes mean new furnishings. These types of personal durable goods are prime for growing their advertising expenditures in 2013.

Communication/Home Entertainment: Those that move into a new home have numerous options on how they are going to receive their entertainment. From cable to satellite, these entertainment suppliers want to be their first choice.

Lawn care: A new home often means yards (to maintain or upgrade) and trips to the garden store. It can also mean landscapers and local businesses that need to get the word out.

These are just six of the numerous categories that will benefit from the return of the American dream.

Identifying the category of growth is only the first step. Radio station sales teams need to take each of these verticals and build a plan. Here’s a basic three-step plan to get you started:

  • Identify advertisers in each category
  • Build a “Why Radio” story
  • Highlight the value of your station’s audience

-Charlie Sislen, Partner