Perfect placement: with print and online marketing, it's not always one or the other.

Turn the page, see a Web site address. Turn the page, copy down an e-mail contact. Turn the page, do a search on the community's name.

Successful apartment marketing takes more than print advertising, more than online promotion and more than a keen search-engine know-how. Today's well-occupied community got that way by blending all those tactics and more.

Marketing decision-makers today face the pressure to gain exposure everywhere while remaining within budget. These marketing directors carefully study the claims of one medium over other, analyzing and calculating cost-per-lease, an unscientific but incredibly crucial statistic that helps apartment professionals to determine where to spend marketing dollars.

The battle for online eyeballs and leasing office walk-ins is an everyday challenge for communities of all sizes. For companies with large portfolios, competition can cause them to increase spending to keep up with the growing number of available options. However, costs are under the scrutiny of watchful investors and Wall Street analysts.

Smaller companies also can feel the pinch. They must squeeze the most out of what can become dried-up marketing budgets, making their decisions perhaps even more critical.

While opportunities for gaining, Internet presence have increased in recent years, the corresponding decline in printed apartment guides and newspaper ads in all areas has not materialized. Rather, successful companies have found that using tactics in tandem yields the best results.

"We continue to see a huge percent increase in leads created through advertisers that use both Internet and our print publications," said NAA National Supplier's Council Chair Terry Slattery, Vice President/General Manager, For Rent Media Solutions, whose company, like most of its competitors, offers placement in both ink and html.

Slattery said print marketing is alive and well, noting that his printed book had a pick-up rate of 96 percent, based on 65 major metropolitan markets in 2006. "There is a market for print," Slattery said. "If there weren't, we wouldn't have launched eight new publications last year. The added print offering in these markets has increased our Internet results significantly. We are able to see how a prospect goes through the process of looking for a place to live it large proportion is using the combination of mediums."

Dual, Not Duel 

"Online advertising's effectiveness is enhanced with print advertising," said Jeremy Brown, Marketing Coordinator, ZOM Residential Services, based in Orlando, Fla., with a management portfolio of 13,000 apartment homes, mostly in Florida and Texas.

"When potential applicants see a Web site address in a print ad, they are more likely to visit the Web site for more detailed information and access to an online brochure," Brown said. "And while print ads help to capture prospects' attention, online ads serve a dual purpose of capturing attention and providing immediate links to the community's Web site, which subsequently leads to a higher probability of capturing a lease."

Brown said that using print and online advertising to complement each other creates an advantage over competitors. "The key to effective advertising today is generating traffic to community Web sites, for which print advertising remains an effective tool, especially in targeting potential applicants in the local market," Brown said.

Brown also said online advertising better targets a broader geographical market, particularly renters relocating from distant locations who would find it more difficult to obtain local print magazines and newspapers. As a result, the returns from online advertising frequently can exceed that of print advertising on a per-dollar basis.

Washington, D.C.-based Kettler (formerly KSI Management) manages approximately 8,400 apartment homes, mostly affordable housing stock. Kettler's Assistant Vice President of Sales and Marketing, Karen Kossow, said that Kettler markets approximately 35 percent of its communities through Internet efforts only. "But we may occasionally need to do a small classified print ad to supplement them," she said. "Our remaining communities are marketed through a mix of print and the Internet, with more of our dollars going to online."

Darcey Forbes, Marketing & Communications Manager, Essex Property Trust, Palo Alto, Calif., said her company dedicates 56 percent of its budget to Internet advertising. "Though Internet advertising has become a more valuable and a better cost per lease return, print is still alive," she said.

"The two sources of advertising tend to complement each other for customers looking for a new apartment home," Forbes said. "However, over the past few years we have seen an increase in Internet searches. We are focusing on the trends we see as a company as well as monitoring what is going on in the industry. If 70 percent to 75 percent of our renters use the Internet to find their new apartments then that is where we need to focus our dollars."

Israel Carunungan, Director of Corporate Marketing for The Bozzuto Group in Greenbelt, Md., said his company continues to market in print publications, but is increasingly concerned with prints' cost per lead and per lease.

"The advertising mix is slowly but surely being skewed toward online," Carunungan said. "[Advertising in major metropolitan daily newspapers] is a perfect example: It's very expensive to run print advertising in Apartment Living sections, and the leads being generated are decent at best."

Carunungan said Bozzuto, which manages approximately 20,000 apartment homes in the mid-Atlantic and northeastern United States, recently re-allocated its daily newspaper print dollars into geo-targeted banner ads on one major daily newspaper's Web site. "The results are significant: not only are we getting more leads by driving people to our Web site through the banner ads, but we are doing it for half the price," Carunungan said.

Rosemarie Cook-Manley, Marketing Director, Home Properties, Rochester, N.Y., said the effectiveness for print varies by market. "In some areas, print is critical to our success, and in other markets, we use very little print," Cook-Manley said. Home Properties owns and operates communities primarily in selected Northeast, Mid-Atlantic and Southeast Florida markets. Currently, it operates 129 communities containing 39,622 apartment units.

Mindy McCorkle, CAPS, Operations Manager, Crosland, Charlotte, N.C., said her company recently cut its print advertising in half and is spending 50 percent of what it did spend on print on online listing services and referral services.

Spending Trends

"Each year, our total advertising budget increases despite maintaining our same portfolio size," Brown said. "Spending for online advertising has received the bulk of the increase, which has primarily resulted from the surge in the past two years of new online advertising services targeting prospective residents."

Fredda Steinberg is Group Vice President of National Marketing for Archstone-Smith, the nation's sixth-largest REIT with approximately 81,000 units. She said that when it is used, print advertising costs her company approximately 10 times more than Internet on a cost-per-lease basis. "With an integrated approach, the two can work together," she said. "Today, there are more places than ever where an apartment company can list available apartments. If a company feels it needs to be in all of them, then that can lead to a significant increase in marketing costs."

Pam Newsom, Marketing Director for Babcock & Brown Residential, based in Charlotte, N.C., said that the cost of advertising per source varies tremendously depending on the market. "In one market, twice as much goes into print as compared to Internet. However, in one of our beach markets, we spend three times more on Internet advertising than print," said Newsom, whose company operates 59 communities containing 28,000 apartment homes in North Carolina, South Carolina, Alabama, Georgia, Florida and Virginia.

Although an Internet ad can be less expensive to produce than print, what marketers also must factor is the increase in manpower for both marketing and IT support personnel. These staff members, full-time employees in most cases, help monitor and support Internet advertising. Alternatively, some apartment marketing service partner companies that offer print and Internet marketing offer more than 200 marketing professionals who work with apartment staff to create bottom-line savings.

Riding the Rates Cycle

Demand and competition are two of many factors in price of print and Internet marketing.

"Rates to advertise on the Internet have increased by as much as 30 percent over the past year," Steinberg said. "But if you are a large company with a lot of volume, you can negotiate those prices down. But, the trend is for an increase."

At ZOM, online fees, including search and Web fees, have increased 10 percent to 15 percent per year during the past three years, Brown said. He attributes that increase to the chum that is supply and demand: There is an increase in demand for online ads, which places a greater demand on Internet ad designers; the dramatic increase in the number of Web sites offering online advertising places pressure on companies to spend more to ensure that they don't overlook any major online advertising service.

Brown said that the rise of new features in online advertising, such as the ability to download applications, real-rime availability of apartments, online payment methods and premium positioning in search engines, also increases costs.

The cycle continues: "As more companies advertise online, the value of using the Internet to search for apartments increases, which motivates more people to use the Internet," Brown said. "And as more people use the Internet for apartment searches, the value of online advertising to companies increases even more, and hence creates a continuous positive cycle. Thus, online advertising has now become a necessity, which contributes to greater demand and higher prices."

Kossow said she is beginning to see some Internet sites try to increase their costs dramatically. "If the amount of traffic and leases does not rise along with this, I believe property management companies will question the cost increases," Kossow said. "I know that we do."

McCorkle said prices for print publications in the North Carolina region have not fallen, but that those companies are offering special deals for premium spaces (the front cover and centerfolds, for example) and contract renewal rates on the print publications have not seen large increases, if any, during the past few years.

John Cohan, Director of Marketing at Southern Management, Vienna, Va., said Southern's cost for online advertising increased by 12 percent for 2007 over 2006. lie said that in 2007, Southern, with approximately 25,000 apartment homes, will spend roughly 66 percent or its advertising dollars on print, compared to 34 percent for online.

"Just a couple of years ago those numbers were about 85 percent for print and 15 percent for online. Each year we have committed a greater proportion of our advertising dollars to the Internet," said Cohan, whose company's portfolio is mainly in the mid-Atlantic. "The first reason is obvious: Online advertising has become more sophisticated and more productive, there are more sites for marketing our product and it is still less expensive, relative to print. So, we move dollars from print to online. This is also how our younger customers want to apartment shop, so we need to have a significant presence there.

"Secondly, print advertising has been, and still is, significantly more expensive than online advertising. But of course the market's natural forces of supply and demand are changing that," Cohan said. "From year-to-year, the cost of print advertising is increasing very slowly, not at all, or, in the case of one of our major print sources this year, it is decreasing. Can you believe that? The cost of Internet advertising, however, is increasing at a much greater rate because of the demand."

Residents' demographics, particularly whether they are Generation Y, Generation X or another group, helps to determine what apartment communities spend on a particular form of marketing.

"Marketers must understand what the demographics consist of at each community," said Jamie Silva, National Marketing Director, Alliance Residential, Phoenix. "Are there predominantly proletariats, students, business professionals, who live there? Once this is recognized, it is typically easy to conclude their ages, marital status and income levels. The most important aspect of apartment marketing is reaching the correct demographic in each community's geographic surrounding area. When considering using a print ad at a community, consider the service partner's distribution and go with one that has the most diverse distribution to meet community needs."

On-Track Betting

Accurately calculating cost per lead or cost per lease of both Internet and print marketing for comparison's sake essentially is impossible.

"Research shows us that residents will list more than one source--often three to five sources---on how they found out about our community," Steinberg said of Archstone-Smith's communities. "Some in this industry have said that a drive-by or walk-by is not a viable initial source, but our research shows that they are. Others will say they first heard about us through a friend or through a broker--and then went online to find more information.

"Technology does make it easier to track Internet leads than print leads, but it is difficult to validate the original source," Steinberg said. "You can ask prospects when they walk in how they found out about your community, but even then, you're not totally sure if it's accurate or if it's a primary or secondary source. Some prospects may mention only one source, and others may mention Internet listing services just to get the cash rewards they offer."

Steinberg said that in 2007, compared to a year ago, Archstone-Smith was getting fewer leads from several major Internet listing services. "It's hard to say exactly why. Maybe it is because there are more sites offering listings or maybe more people are using search engines such as Google and Yahoo!, instead," Steinberg said. "In the end, it comes down to cost per lease, and if a company is finding that it costs less to source a lease through the Internet, they will spend their marketing dollars online all day long."

Slattery agreed that source tracking could be difficult. "The biggest challenge a print product faces is being unfairly compared to an Internet listing service," Slattery said. "Internet services have the luxury, through technology, to tell you every time your ad is viewed. This is a benchmark for success for many companies. If every time an ad was viewed in a print publication, someone were notified, that would be a like comparison.

"The reality is that print leads are only trackable after a prospect does an actionable act, such as placing a phone call to a community or visiting the community. That lead, at that stage, has a much greater value than an online ad view, but there will be a lesser number of these leads. Many companies simply group these leads into a spreadsheet and try to compare apples to oranges," he said.

Forbes said analyzing the number of "hits" or search impressions, listing viewings and leads generated by online and print marketing is a major focus of Essex's marketing efforts.

"These numbers are what will determine the future of our advertising," Forbes said. "As a REIT, it is vital to our success to analyze these statistics and use our resources more effectively.

"With print advertising, you cannot measure how many people looked at your ad, who then took the ad and went online to view your listing and then called the community. Online advertising has the advantage of providing actual conversion ratios and translating that to what was our return on investment," he said.

Silva said at Alliance Residential, with a top 20 nationally ranked portfolio size of approximately 42,000 apartment homes, some have experienced up to five times more traffic by advertising online, but conversely, other communities are equally successful with print. She said Alliance determines success rates through tracking. But, communities have different levels of confidence in the conclusions they draw from statistics.

Cook-Manley said tracking leads is always difficult because it also relies on the leasing consultant's ability to gather and record information accurately.

McCorkle said Crosland's tracking of year-end 2005 versus year-end 2006's showed traffic shifted from 60 percent from print ads to 65 percent coming from Internet sources.

Some service partners provide a trackable telephone number that allows apartment marketers to accurately see the results of their marketing dollars in print and online.

Communities can take that a step further by assigning tracking numbers to particular service providers within certain marketing approaches. That way, for example, if it advertises on three listing services, it can see which was viewed more.

Where to Put the Beef

Steinberg said print might be necessary to augment online advertising efforts in situations in which a company wants accelerated lease-up or in softer markets. "Here, beefing up your print budget can help to get your word out, and it might be worth it, even if you are paying more per lease," Steinberg said.

Carunungan said the beauty of online advertising is that it is highly targeted. "You can serve up your ad only to the ZIP codes you specify. You can switch the creative content any time. You can direct people to any landing page you prefer. And the metrics are very sophisticated: You know exactly how many people viewed your ad, how many clicked on it and what they did when they got to your Web site."

Steinberg said another key to effective online marketing is maximizing the benefit of search engines (For details on search engine strategies, see the July 2004 and December 2006 issues of UNITS magazine).

"Search engine optimization is becoming more popular and some are finding it more efficient than online listings or online advertising," Steinberg said. "Search engines are becoming more intelligent and people who use them are becoming savvier to search results, too."

Carunungan said Bozzuto, like many of its competitors, is looking outside the typical print and Internet approach to marketing. "We are pursuing new channels of online advertising, such as search engine marketing, banner advertising, targeted email blasts, geo-targeted ads, site-targeted listings, contextual advertising--all to drive traffic to our corporate and community Web sites," Carunungan said.

"The idea is that the more people visit our Web site, the more educated they become about the community, and thus the more qualified of a prospect they become," he said. "The fact that they make that next step--call, e-mail or visit the community--means there is a higher level of interest for this prospect versus someone who has never visited the Web site. We recently redesigned our corporate Web site and launched many community-specific Web sites that provide more detail about our communities."

Fred Tuomi Equity Residential

Fred Tuomi, Equity Residential's President of Property Management, caused a stir in the industry last year when his comments before a conference panel were interpreted to mean that "print is dead."

"Our print budget is not zero," said Tuomi, who directs one of the largest portfolios in the country, with more than 160,000 apartment homes. "There are certain communities, markets and times when print is used effectively. There are markets where Equity took print out of its marketing mix and then put it back in. It's not [a strict policy statement], but rather, we spend based on business decisions and return on investment.

"There is some validity in the approach of apartment management companies using print to get the word out about their Web sites," Tuomi said. "Their URLs are part of their signature message and that shows up in their print pieces. Doing that is fine, but my advice is not to overspend on print simply to drive residents to the Internet."

Follow the Consumer Trend

Tuomi said the apartment industry's shift to an increase in online marketing is not new and not news. "At these industry conferences, I was asked a question and gave an honest answer," Tuomi said. "But mine wasn't that print was dead. You have to look at the context on how it was asked."

Tuomi said Equity and the apartment industry, "like all industries, follows consumer trends, we don't set consumer trends. Today, the momentum favors internet marketing. Our metrics show this. Our industry and all industries know this. It's why this country's businesses have been able to lower operating costs and increase wages without creating inflation. When people are looking for any consumer service or product these days, their first move is not to pick up a printed book like the Yellow Pages. It is to go to the computer, where they search," Tuomi said.

Tuomi said Equity's metrics indicate that once on the computer, today's renters conduct searches through sites such as Goggle, Yahoo! and Craigslist. He said residents then follow up their searches with visits to apartment listing Web sites and proprietary sites and then, after narrowing their searches, visit the communities themselves.

Tracking the Cost

Tuomi said that despite the growing popularity of Internet marketing, he hasn't seen a large increase in its cost. "I used to fear that it would happen," he said. "It has somewhat, but not greatly. Over time, when effectiveness of Internet marketing grows, it may."

Tuomi said tracking leads can be difficult, "but it can be done." If the renter looked at an Internet listing site, Craigslist and a search engine, "we are at their mercy to recall where exactly they found us," he said.

As far as controlling marketing costs, Tuomi said all companies--public and private--are scrutinized. "They must answer to their investors," Tuomi said. "In the end, you have to prove your return on investment. You have to make a wise choice, and it shows up in your books."--P.B.

3 Effective Print Strategies

1. Lease-Up. Print is an effective supplemental marketing approach to use during new lease-ups when communities seek "maximum velocity" in getting their message out. "In these cases, you want your community's name in print and on billboards, signage, rail lines, on the sides of busses, anything. You pull all the stops out."

2. Repositioning. Tuomi said that during a community's repositioning, print can be a good solution to promote and solidify the community's new identity.

3. Unstable Market. Tuomi cited the recent condo boom in South Florida, which became a highly competitive market, as an unstable market where print marketing could be valuable. "Any time the market is unstable, you have to widen the net to fit a larger target audience," Tuomi said.

Newspaper Marketing: A 180

Pam Shelton, Rental Manager, The Arizona Republic, the largest daily newspaper in the Greater Phoenix market, was instrumental in the creation of that paper's weekly printed apartment listing section nearly nine years ago. Many major metropolitan area newspapers now publish similar weekly rental sections.

"Back then, online marketing supported print marketing," Shelton said, "Today, that has turned all the way around. We're not going in that direction, we're there."

Shelton noted that The Arizona Republic's marketing sections and niche publications are branded with its dot-com identifier.

"Apartment owners are bundling their marketing dollars with print and online to reach their targeted, yet diverse audience," she said. "This combination ensures their marketing dollar goes further, realizing near total market reach."

Shelton said cost-per-lead in newspapers can be less expensive than online. "Our Sunday circulation is over 500,000, and a small, inexpensive liner ad in the rental section can deliver incredible traffic and leases."--P.B.

Paul R. Bergeron III is NAA's Director of Communications. He can be reached at 703-797-0606 or [e-mail].