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Former Dallas Morning News Advertising Representative Sheds Light On Motivation Behind Online Real Estate Partnership

Last week, we had the opportunity to speak with a former Dallas Morning News real estate advertising sales representative who shared some inside details on how the online partnership between A.H. Belo and Sawbuck Realty may affect their ability to sell real estate advertising with other Dallas brokerages and why the choice was made to move toward a new business model.

The sales rep, who asked to remain anonymous because of a confidentiality agreement with The Dallas Morning News, decided to “pursue other options” after A.H. Belo announced it’s funding of an online real estate brokerage (Sawbuck Realty) from the dallasnews.com website.

“I feel they screwed over us — the account executives — because they screwed over our clients,” said the sales rep.

The source explained that while times had been tough for the past year — they hadn’t received a commission check since 2008 — bringing in and openly siding with an outside competitor like Sawbuck Realty would make it nearly impossible to sell real estate ads.

“All my clients are going to abandon ship soon,” said the sales rep.

Knowing this move wouldn’t sit well with their top real estate advertisers, in late June A.H. Belo sent a representative from Belo Interactive Media to their top five clients (Briggs-Freeman, Allie Beth Allman and Associates, Coldwell Banker, Dave-Perry Miller and Associates, and Ebby Halliday Realtors) to give them an idea of what was coming, according to the sales rep and an official at Belo Interactive Media.

These brokerages had bought at least $500,000 or more in advertising over the past year. The brokers didn’t exactly jump for joy when they heard the news from A.H. Belo, according to the sales rep,.

“A.H. Belo doesn’t care. They know there is going to be collateral damage and they are doing their best to keep the damage at a minimum,” said the sales rep.

A.H. Belo and The Morning News are banking on the future of the dallasnews.com website as a “life engine” and they see ad sales online and in print as something that can no longer carry the financial load, the sales rep said.

“Dallasnews.com is trying to make itself not just a news information site, but also a marketplace. A life engine where people can go and shop. This is the future,” said the sales rep.

The next logical question is can traffic to the “home center” portion of dallasnews.com make the $2 million investment in Sawbuck Realty worthwhile? We already know that Sawbuck Realty (and in turn A.H. Belo) gets 30 percent off the top of every commission (from the buying agent) that comes from a successful sales lead. The majority of those commissions will more than likely come from a pool of potential home buyers who visit the “home center” looking for a home.

When it comes to unique visitors, the “home center” gets an average of about 65,000 unique visitors a month, according to Chewy Redding, Belo Interactive Media’s product manager.

This represents about 4.3 percent of the total number of unique visitors who travel to the dallasnews.com home page each month looking for news (I was told they’ve been averaging somewhere in the ballpark of about 1.5 million unique visitors a month during the A.H. Belo/Sawbuck Realty conference call).

How does this all play out in the future? No one knows for sure, but it’s a safe bet that dallasnews.com will take more steps to head in the “life engine” direction as ad sales online and in print continue to diminish and consumers get more comfortable with making big transactions online.