MUMBAI: Real estate companies were the fifth largest buyers of space in print and radio in 2006.
AdEx India, an agency that tracks the advertising industry in India, says these firms bought the equivalent of 3,937 full-page ads in mainstream papers and 1,51,700 ten-second spots on radio, the equivalent of 17.5 days. The agency has not put a rupee-value to this number. In terms of market share, real estate firms accounted for 4.1% of print advertising and 6.3% of radio advertising in 2006.
A booming real estate market coupled with several developers using the opportunity to tap the equity market was responsible for this. In 2005, AdEx says, real estate firms bought the equivalent of 2,387 full-page ads in newspapers and six days of spots on radio.
Real estate developers have long pitched their wares through hoardings and local editions of newspapers. “The most that developers did was to advertise on a billboard or two around the property that was up for sale,” Madison Outdoor Media Solutions CEO Soumitra Bhattacharya says.
Over the past few years, the real estate business has become more mainstream: in many cases, the target audience of potential buyers could be anywhere in the city where the property is being developed warranting ads in mainline dailies; in others, especially when the properties being sold are high-end ones, the target could be in any of India’s large cities.
The emergence of real estate assets as an investment class has also meant that individuals are increasingly starting to buy properties in cities where they don’t live currently and probably never will, purely as an investment.
“Over the past few years, there has been a substantial growth in business,” says Niranjan Hiranandani, the managing director of Hiranandani Constructions, one of Mumbai’s largest developers, adding that this has taken the firm’s advertising into more mainstream channels.
That may have also been prompted by the need to create brands, says Siddhartha Mukherjee, the director of communications at TAM Research which runs AdEx India.
Hiranandani does not buy that argument. According to him, only 10% of the industry’s ad spend goes towards brand building. The rest, he says, is about new projects.
Some brand building initiatives of real estate firms are also driven by the need to raise funds from the market. “The recent spurt in advertising space and time (bought by real estate firms) is driven by IPOs,” says Vinod Rohira, a director of sales and marketing at K. Raheja Corp, a real-estate developer. DLF Ltd, one of the country’s largest real-estate developers, will soon announce the timing of its IPO. “Only the big guns have started firing with their IPOs,” says Madison’s Bhattacharya, “but I am sure smaller players will start soon.”
Parsvnath Builders, a Delhi-based developer that came out with an IPO in October 2006, advertised through radio, newspapers, television channels, and hoardings in the run-up to its offer. Even then, claims Pradeep Jain, the company’s chairman, Parsvnath’s advertising efforts were more focused than those of companies in other businesses. “After all, it’s real estate we’re selling, not toothpaste,” he says.