Can advertising generate extra sales price for property?

by Alistair Helm in


  • If a TV company were to say to an company - if you buy this campaign you will see a 20% increase in sales - you would not believe it?
     
  • If a radio network were to say to an restauranteur - if you buy this campaign you will see a 20% increase in sales - you would not believe it?
     
  • If a real estate agent were to say to you as a seller - if you buy this campaign you will see a 20% increase in the selling price - you would not believe it?

So why would you believe it when the NZ Herald says - if you buy a campaign in the Herald Homes you will see a 20% increase in selling price?

Well that is exactly what the NZ Herald wants people to believe with the new advertising campaign it has started

To be fair and accurate they are not, as the headline says claiming that by using Herald Homes that you will see a 20% higher selling price. Although these banner ads you can read above suck you in with this ambitious claim!

What they are saying is that if you use Herald Homes then on average the premium of the sale price over the CV of the property will be 20% higher than for a property without the Herald Homes - as ever the small print tells the real story whilst we are seduced by the headline!

Herald_Homes_-_Sell_your_property_in_Auckland_for_more.jpg

So if I am correct in this assessment, this is the scenario they are claiming based on the much promoted Grey Lynn 'dump' - its CV was $690,000 and it sold for $1,075,000 at auction on Wednesday. So Herald Homes is claiming that if this property had not been in the Herald Home (which it was, as well as TVNZ, TV3, Stuff etc etc) then it would have sold for 20% less than $385,000 margin over CV - effectively without the Herald Homes a sale price of just $998,000. So the claim in this case is that the advertising in Herald Homes boosted the sale price by $77,000! - That is some claim. Clearly if this were to be believed then the investment of c. $6,000 a page would be money well spent!

The advertising material to support this ambitious claim references to a "TNS Research 2014" as the source of the claim. I have written to the NZ Herald with questions about the research and to seek to obtain a copy.

I cannot believe this claim as the fact is there is no such thing as a 'control' environment when it comes to property and any claim to state that this method of sale, or that agent, or this advertising will achieve a higher price is unprovable.

To be able to in any way even test this hypothesis you would have to analyse a sample group of properties in a similar area of the country across a variety of price points using different selling methods - some of these properties would be advertised with say Herald Homes and Trade Me / Realestate.co.nz, some just Herald Homes and some with no Herald Homes and just online.

I can see no possible way for any seller to be happy to participate in this type of 'research' - every seller wants maximum exposure and there is absolutely no way of isolating the impact of Herald Homes from other factors such as market demand or online premium advertising or any number of other factors.

I will wait with interest to see if the NZ Herald respond to my request and also to see if they continue with this advertising. I believe that this advertising proposal breaches the code of practice of the Advertising Standards Authority in regard to misleading and potentially deceptive advertising claims.