Golf community ad spending hints that recovery might be underway

        These have been bad years for those ad agencies that had counted on a continuing stream of media placements from free-spending golf communities.  That all ended with the housing crash.  In its most flush years, for example, The Cliffs Communities spent $14 million for marketing and bought prime positions in such high-end magazines as The

Robb Report, as well as just about every other four-color publication that appealed to golfers with champagne stock portfolios.  Ditto such successful high-end communities as Georgia’s Reynolds Plantation and Ford Plantation. Full-page, $100,000+ ads in the Wall Street Journal, for example, were common for dozens of golf communities trying to distinguish themselves and fetch a million dollars for an acre of prime dirt.  The major golf magazines (Golf Digest, LINKS, Golf magazine) provided lots of “editorial” coverage for the new golf community courses; all that “free” advertising was tied, of course, to the promise, if not the reality, of paid advertising.

        But since 2006, these high-end communities have largely been absent from the major paid media.  We all know what happened in the market, especially at the high end.  Over the last few years, only the financially strong –- or crazy –- golf communities have continued to throw good money at advertising, even though one could argue some counter-communications were needed to overcome perceptions that a $1 million home in a golf community is a risky buy.  Most communities rationalize their lack of spending; modern customers, they say, use the Internet to conduct research.  Maybe, but the hedge fund managers and their ilk who can afford the high-end properties likely have neither the time nor the inclination to conduct Internet searches.

        But they do read the Wall Street Journal.  And the increasing number of ads popping up for golf communities in

the Journal implies a revived sense of confidence in many of those high-end communities.  Today in the Wall Street Journal, for example, I noted sizable (1/4 page) ads for Hampton Lake in Bluffton, SC, The Landings in Savannah, and DeBordieu Colony in Georgetown, SC, located between Myrtle Beach and Charleston.  Another half-page “special advertising section” features a few golf communities in the Lowcountry between Charleston and Jacksonville, FL (and a sidebar about how Hampton Lake decided not to invest in building a golf course; instead, its residents can join one across the street).  Unless the Wall Street Journal has changed its rate structure dramatically in recent years, the total buy for these ads is at least $100,000.  That’s an investment these planned communities have not been inclined to make in recent years.

        “We have not done much marketing in a while,” says The Landings Vice President of Marketing Bill Houghton, “and we probably fell off the radar screen” amid all the earlier advertising by The Cliffs, Reynolds Plantation and others.  Houghton, who recently arrived at The Landings from a similar post at Reynolds Plantation, told me that The Landings' 2010 sales volume is ahead of last year, which gives Landings owners -– its residents –- the confidence to spend.

        Just like rehiring and investing in capital equipment typical signal restored health for corporations, advertising by

  planned residential communities could very well be a leading indicator of a revived market.  These communities are betting on more baby boomers coming off the sidelines and renewing retirement home searches that they postponed because of the recession.  The stock market, which is coming off one of its best 12-month stretches ever, is puffing up confidence among buyers.  This is good news for the Wall Street Journal and other advertisers, for the communities that have been waiting for buyers to return, and for the buyers themselves who have put off for a half a decade a planned move to warmer weather and a life of golf and leisure.

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We are still in a buyers market, but that could change by the end of 2010, especially in the mid-level ($400,000 to $750,000) segment of the residential leisure market.  If you are considering purchasing a golf community lot or home in the next couple of years, it is not too soon to start looking.  Contact me and I will be happy to offer you my thoughts based on your requirements.  I never charge for my services.

The Landings in Savannah, which features six golf courses and a debt-free balance sheet, is feeling confident enough to start spending on advertising in such venues as the Wall Street Journal.