Covering the cracks: Marketing in the current housing industry

“The sector is suffering meltdown at the moment but in a vastly different way to the problems of the early 1990s,” says Nic Morris, pictured right, MD at the Manchester office of Aylesworth Fleming – one of the most seasoned specialists in the sector, with a client list that includes the likes of Redrow, Gleeson, Miller Homes and Taylor Wimpey.

“Developers today have to make reservations just to stand still with high levels of cancellations caused by credit availability,” Morris continues.

“I still believe there is a market out there. Although it is undeniably more difficult to get people through the doors, if the marketing approach is correct there are opportunities to be had. Historically the property market runs in cycles and, even though the credit issues make this period particularly difficult, low unemployment and relatively low interest rates could limit the severity.”

Aylesworth Fleming, which also has offices Bournemouth and Edinburgh, isn’t the only agency with clients in the housebuilding sector. Other suppliers keeping a close eye on the market include the likes of MediaVest and Space and Time, which handle media planning and buying for Barratt and Taylor Wimpey, respectively; Brahm, which handles the ad account for Persimmon and The Union, which is the lead agency on the Miller business.

Head of marketing for Miller, Philip Hogg, pictured right, says that the company is monitoring its media spend very closely and more importantly monitoring its effectiveness.

Evolving picture

“We cannot afford to waste any money on ineffective advertising or media,” he says. “We are trying to respond to what we believe are the prevailing issues and concerns that are facing our customers. This is an evolving picture, because in our industry mortgage availability and affordability were the prime issues a couple of months ago, however now it is one of fragile consumer confidence.”

Hogg goes onto admit that it is likely that the demand for marketing materials will decrease reflecting the lower demand for new housing.

“Agencies need to be cognisant of the retail environment,” Hogg continues, “if they haven’t already felt the squeeze, then it’s on its way. They need to ensure that they are delivering good value and seek to reduce their cost base - often this isn’t easy for some sectors of the marketing industry and sometimes they can be too ‘precious’ about their work and are not commercial in their thinking. We all need to ‘cut our cloth to suit’ and those that do will be the ones that will survive these challenging times. The supply chain needs to support the ‘front-line’ retailers in their efforts to sell, th

is may involve some drastic actions but it is about survival.”

Morris agrees that a proactive approach is required and believes the better agencies will come through relatively unscathed.

“Fees will undoubtedly be renegotiated and a lot of below-the-line project work has all but dried up. However, good agencies become more involved in this climate and campaigns that were once seasonal or quarterly now need to be re-evaluated with greater frequency. You have to react a lot quicker to shifts in the market as it seems every week another sector of consumers are affected. Also, it is important that procedures are in place to put clients in pole position ready for the inevitable upturn.

“Above all,” he warns, “it is vital that agencies stay positive and energetic to provide targeted and sophisticated solutions for property clients.”

In public relations, the situation is much the same and while some doom-sayers may argue that PR could be hit harder than most, Haslimann Taylor’s deputy MD Sarah Kent, pictured right, believes the opposite could be the case.

“The sharp downturn in the property market is likely to affect all agencies in the sector as clients look at costs across all areas of their business. From a PR perspective, which is often more cost effective than other marketing disciplines, this doesn’t necessarily mean reduced budgets.”

The Birmingham-based agency handles PR for Taylor Wimpey and Kent is confident that clients will appreciate the value of the service during these tough times.

“Most clients accept that good PR is essential in a tough market – whether that be through effective communication with the media at a corporate level, lobbying the government for change or by continuing to generate positive news stories geared towards consumers.

“PR is one of the housebuilding sector’s most effective tools in current conditions. PR professionals will need to adapt to continued market changes, deliver very targeted and cost effective campaigns and demonstrate return on investment through robust evaluation.”

Neil Robertson, director of PR Partnership which counts Stewart Milne Homes among its client list, believes that as a result of the troubles, the use of PR is likely to grow as each company will employ different communications and PR strategies.

Quicker response

“Employed properly, PR is central to marketing and communication at a challenging time like this. However, I don’t necessarily subscribe to the view that a reduction in the spend of other parts of the marketing mix means that PR is given a higher importance.

“The point is that PR should always play a key role in the marketing of any major house builder. What does change under the current circumstances is that PR has to evolve, become more targeted, more precise and create a quicker response. There is also a role to be played in putting the true market position into perspective, taking into account matters such as the significant regional variations, a matter that is not well portrayed in the national daily press.”

Adapting to the sector’s changing landscape is paramount and Morris believes marketing has as big a role to play as ever.

“Our approach has always been to be adjunct to the client’s marketing operation,” he explains. “The current climate, however, means we need to go one step beyond that. We now see our services interwoven with the client’s own marketing operation, often needing to replace positions made vacant by redundancy.

“Marketing property today needs to be about identifying the barriers to purchase and providing solutions to those barriers,” continues Morris.

“Two years ago property marketing revolved largely around place, price and product. Today you have to put yourself into the customer’s shoes and make what they are led to believe by the media to be a risky purchase believable and a safe investment.”

Communicating with clients is essential in such a precariously balanced economic climate and housebuilders will need to balance their investment in marketing with other financial constraints faced within the business. Undoubtedly, budgets will follow the economic downturn and some agencies could find themselves making job cuts of their own as a result. But, with the trust of savvy clients and a commitment to the power of marketing both the sector and the agencies that specialise within it will overcome the challenges.