Following from Charlie’s great little article yesterday I want to turn your attention to the so called ‘glossy wars’ being run across Australia.
Over the past few weeks I have been receiving emails about a ‘heated’ war between Antony Catalano (MMP Holdings) and Fairfax’s Real Estate Print Guides. You can read a great little article on Crikey here and also The Age article here.
It seems some of eastern Melbourne’s agents including Jellis Craig, and Kay & Burton, are defecting from Fairfax Media’s Melbourne Weekly Real Estate Guide to a new publication being led by Antony Catalano (MMP Holdings) and some law firms with some the local agents taking a stake in the publication.
Now where do I start?
Yesterday’s article by Charlie pointed to a percentage of agents that claim that vendors are somewhat begging to be included in print publications. I call this segment of the market ‘truth stretchers’ or maybe ‘agents with interests in print publications’ is a better phrase. Seriously? Vendors are knocking on agents doors to advertise in print? Surely you jest!
Print Advertising is a barrier market these days. Convincing a vendor to shell out thousands of dollars for a one day advert that only competing agents look at (a little harsh yes), is hardly a good advertising investment for your vendors. The barrier market I refer to is at about $700,000, this means very few people with properties for sale under this figure would look at a print campaign, hence the ‘barrier market’. This barrier is rising by the year and in a few years print publications and interested agents will only survive on the multi million dollar vendors.
This is not to say print advertising is dead, it will survive in exclusive pockets of Australia, but to middle Australia and below, it is finished!
But wait! Why have MMP Holdings and others invested in real estate print media? You only need to read Charlie’s article from yesterday to understand why – dumb money! For some reason real estate agents in Australia are still infatuated with print media and whilst print advertising is in decline it is still a very lucrative market.
Going up against Fairfax is a tough deal and one that may play out for years. The problem for MMP Holdings is that incumbent newspapers will not give up their market share without a long costly fight and most of these publications cannot stand the heat or successfully sell back to the newspapers within a few years.
MMP Holdings will have need to make an impact fast. Having a group of agents owning a share of the publication is not the smartest move either. We have seen how far that will get you with competing agents in the past – especially if this is disclosed to competing agents.
The biggest problem faced by MMP Holdings aside from money is infrastructure. Fairfax have so many other perks it can offer agents with zero real costs that it will make competing in the long term difficult. Remember Fairfax are combining their print and online divisions, so offering bonuses on the web for ‘loyal’ agents can make life difficult for MMP Holdings.
Something tells me everyone involved in this is playing with other peoples money. There are hundreds of opportunities out there to make money, why would you spend millions of dollars on an industry that will most surely die a slow and painful death?
All over Australia new glossy print companies are going up against incumbents like Fairfax and every time I read an article on this subject I just think why? Are agents that dumb that they will just continue to throw money at something that offers little value for money?
Maybe I am a web snob, but these glossy wars get a little boring after a while.