Sellers increase marketing budget in face of tighter market


Vendors are willing to increase advertising budgets for their homes if they can delay payment of marketing costs until settlement, new figures from marketing finance provider CampaignAgent show.

CampaignAgent offers pay now and pay later options. In September 2021, 36 per cent of vendors chose to pay later and this increased to 57 per cent in August 2022.

Australia-wide sellers who pay later with CampaignAgent are spending, on average, a bit more than $5000 on vendor paid advertising (VPA), compared with about $4500 for those who pay up front.

The difference is even more stark in Queensland where pay later customers spend almost $4500 on VPA, compared with $3500 for pay now customers. In May 2021, pay now and pay later customers each spent about $3400.

“If you ask a Queenslander to pay now for VPA you will get a $3500 campaign and if you give them the option to pay later they will spend 25 per cent more,” CampaignAgent Co-founder Seth Watts said.

The pattern is similar in South Australia.

“CampaignAgent will deal with 160,000 listings this year, so almost a quarter of the Australian real estate industry will transact on our platform,” Mr Watts said.

“As the market gets tougher we often hear from clients that no-one wants to spend money and it is impossible to get people to invest in marketing their property. It got to the point where I accepted that as truth.”

CampaignAgent data from the past three years tells a different story.

“What we had imagined is that people would invest more on marketing in a strong market and spend less in a weaker market but this data set finds the opposite,” Mr Watts said.

In tough market conditions in January 2019 CampaignAgent sellers spent about $5000 on VPA. That dropped to $3500 at the peak of the boom in September 2020.

As the real estate market has become tighter, the investment in marketing has increased to the same level as 2019.

Mr Watts has some sound advice for agents should they face any opposition from vendors concerned about marketing spend at the moment.

“Vendors will be saying to agents: ‘Prices are coming down, I’m worried we are not going to get a great result’, Mr Watts said.

“This data gives the agent support to say to vendors, ‘On average, in this market, people are spending more on marketing because they recognise that to get the best price they have to invest in exposing the home to a larger number of buyers’.

“That is important for real estate agents to know because I think they are often hesitant to talk about marketing when they know a vendor is going to get 10 per cent less for the property.”

CampaignAgent figures also show the average spend on VPA in Queensland and South Australia is closing the gap with the traditional real estate powerhouses in Victoria and NSW.

Queensland vendors who pay later for VPA are spending almost as much as in NSW.

Victoria still leads the way in the average spend on marketing at about $5500 on average.

“We have more money being spent overall on VPA in a tough market and the amount of money spent in pay later increasing significantly over pay now,” Mr Watts said.

“As the property market gets tougher it is becoming super important for agents to offer a choice of pay now or pay later.”

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