Slump Forces Real Estate Companies to up Ad Spend

Till some time back, the advertisements for specific
housing projects were largely confined to property supplements or niche
magazines, but now it has moved on to TV and has an increased presence
in print.

Caught in a downturn and unable to hold back new launches, real estate
developers have stepped up promotion activities of their new projects.
"Speculators are exiting real estate. Therefore, promotional activities
have increased these days to woo buyers, who are the actual users now,"
says Omaxe chairman Rohtas Goel. Omaxe recently launched a luxury housing
project in the national capital region and ran a big promotion campaign
around it.

In some cases, where the projects were launched some time ago, aggressive
advertising campaigns have started only recently. Unitech launched a
TV campaign for its luxury project Unitech Grande only four weeks ago,
almost eight months after the project was launched. The company also
held special events – derby in Delhi and polo in Mumbai – in the past
few weeks to attract buyers for the launch of its two new towers in
the Grande project. Despite these events and TV campaigns, Unitech vice-president
(sales & marketing) Bhaskar Basu says the company’s spend on promotional
activity hasn’t gone up.

He, however, admits that the transaction in primary home market have
declined by almost 80%, although his company has not been impacted.
For obvious reasons, it’s difficult for developers to admit that the
off take in their projects have slowed.

"All developers will have to work harder now. And that’s why the
visibility of promotion campaigns has gone up. Everyone is trying to
grab a piece of the shrinking market," says real estate consultancy
Knight Frank India chairman Pranay Vakil. Despite a sluggish market,
developers have continued to launch new projects since holding back
would mean reduced cash flow for the company, restricting its growth.
Moreover, there is also an increased attempt at wooing NRIs.

"We are focusing on international marketing. We have opened offices
in US, London and the Gulf and are participating in real estate expo,"
says Mr. Goel. Property developers see NRIs as a major client base.
"Developers are going in for large campaigns to establish a rapport
with NRIs and capitalize on it once they are home in summers,"
says Mr. Vakil.

Through these campaigns, developers are also eyeing a slice of the
big money, which is likely to come into the pockets of high-salaried
individuals by way of bonuses. "We are about to enter the season,
when bankers start getting bonuses which might prompt them to invest
in housing," he says. Besides, developers are also trying to induce
buyers to get other clients for a monetary incentive.

In a referral programme launched by a Mumbai-based developer, a buyer,
who gets an additional customer, gets a 2% commission on the sale proceeds.

Photo: SD Tower Apartment Complex – Prafulla Kanan – Kolkata 20170811160939 by Biswarup Ganguly, licensed under CC BY 3.0, via Wikimedia Commons.