From Inman News Features
The nation's largest for-sale-by-owner advertising service is plotting a multimillion-dollar advertising campaign that will target locations around the country with the message that consumers can save money by selling their homes themselves without the involvement of a real estate broker.
The service is ForSaleByOwner.com, which sells print display advertising to for-sale-by-owners, known as FSBOs, and distributes 1.2 million magazines of FSBO ads each month through 38 licensees in 26 states. The company also uploads the print ads to its Web site, where it solicits and displays additional online FSBO advertising.
ForSaleByOwner.com COO Colby Sambrotto said the company is "laying the groundwork to advertise much more aggressively in 2003."
The test phase of the campaign has a budget of $2-3 million. The money is coming from cash flow and an infusion of capital from a private investor, who is an outsider not connected with the real estate industry, according to Sambrotto. He said the company is generating positive cash flow, although the bottom line is somewhere around the break-even point.
"No one in our industry has had the budget to create an aggressive advertising campaign, and we finally do," he said.
Marketing specialist Jeff Mindhan has been brought on board as ForSaleByOwner.com's director of marketing to hone the message, develop the creative and buy the ad space.
Mindham previously was the senior vice president of the New York advertising agency Cossette Post, but he's better known in real estate as the mind behind YHD Foxton's high-profile advertising blitz in the Northeast.
His career also included stints with Grey, Wells Rich Greene and Saatchi & Saatchi and involvement with such household-name brands as Red Lobster, Philip Morris, Liberty Mutual Insurance, VISA and Texaco.
The plan is barely on the drawing board, but Sambrotto said the money likely will be spent on a mix of radio and television spots, print advertising, billboard space and possibly other media. Two 30-second television commercials and a 30-minute infomercial are in production.
Sambrotto said the test-market locations are likely to be Phoenix, Las Vegas, and one other city selected from four remaining on the company's confidential short list. He said the campaign aims to target places where people are wealthy and well-educated and have experience with real estate transactions.
Arizona and Nevada may match those demographics, but they also are among the top 10 markets in the country for Help-U-Sell franchises. The sell-it-yourself-with-our-help chain has 14 locations in Arizona, including five in Tucson, and seven in Nevada, including three in Las Vegas. And Help-U-Sell also has a listings data distribution agreement with PrivateForSale.com, another FSBO Web site that is a direct ForSaleByOwner.com competitor.
The test-market phase was launched March 1 and the full-blown branding and direct response advertising campaign will follow in the second quarter of 2003.
The total budget for the full-on campaign hasn't been pegged yet because it will depend in part on the results of the test phase. Sambrotto said the full campaign will be national in scope, but targeted to specific cities.
"We won't be running ads during the Super Bowl," he said.
One goal of the test-market effort will be to find out what sorts of messages will capture homeowners' attention and spur them to purchase online or print advertising from the FSBO company. But part of the message certainly will be about axing the real estate brokerage commission out of the home sale transaction.
"Price has been the motivating factor for sellers — that is, that amount of money they can save (by selling their house by-owner). Beyond that are the convenience and the fact that the Web site is easy to use. The biggest value proposition will probably be the price," Sambrotto said.
ForSaleByOwner.com aims to position itself as REALTOR -neutral, but it's a tough sell from a company that facilitates FSBO transactions, uses the slogan "Our mission is no commission" and wants to control the FSBO industry, which by definition is the antithesis of broker and agent services.
"We are not anti-REALTOR®, and we understand the vast majority of REALTORS® provide a great professional service at a fair price. We compete with that, but we don't try to create an image of our company that relies on a bad image of REALTORS. That's not going to be the tenor of our advertising campaign," Sambrotto said.
But he's not oblivious to the likelihood of a major negative reaction to ForSaleByOwner's advertising blitz from brokers in local markets where the campaign is unfurled.
"We've tried to make REALTORS® understand that we are not anti-REALTORS®. There is space in the market for both of us. There is demand for our services among consumers and we are going to fulfill that demand. But I imagine there will be some degree of backlash in some of the markets," he said.
ForSaleByOwner.com claims to have 15,000 for-sale houses plus a sprinkling of condominiums and commercial properties on its Web site at any given time. About 5,000 houses are added each month and the rest are repeat advertisers. The average asking sales price is $200,000, according to Sambrotto. He also said sellers have found buyers for some 6,500 homes since the company's inception through its Web site and print publications.