A Real Estate Broker’s Guide to PPC Advertising
By Andrew Rapp
When online advertising originated in the 1990s, it borrowed many concepts and phrases from traditional advertising, but brokers who are veterans of real estate advertising will find plenty that differs from the offline world. In particular, the improved ability to track the performance of online advertising resulted in new pricing models. The most popular of these is “pay-per-click” (PPC) advertising.
The basic concept of PPC advertising is simple: The advertiser pays a certain amount every time their ad is clicked by a viewer. Typically, clicking on the ad takes the viewer to the advertiser’s website, often to a specific page tailored to what was offered in the ad (called a “landing page”).
Behind that simplicity, there lies many complex issues: Knowing where to place ads, how to manage them, how to get the best pricing, and how to target the right consumers are all topics worthy of examination. But for this article, we’ll focus specifically on how real estate brokers can best use PPC advertising.
Understanding PPC advertising requires a brief look at the relationship between real estate advertising sellers and buyers — specifically, who bears the risk in this relationship. Imagine different advertising formats as falling along a spectrum.
To the far left of the spectrum are formats like sponsorships, where the seller provides the buyer few guarantees of success. If you buy the naming rights to a football stadium, the owner may guarantee a certain attendance at games, but they won’t guarantee that the fans will purchase your product or even care about it.
To the far right of the spectrum are formats like affiliate sales, where the seller guarantees you a sale. In fact, they don’t even get paid (typically as a commission) unless your product is purchased. In this case the advertising seller assumes all the risk.
Most advertising falls somewhere in the middle. If you buy an ad in the real estate section of your local newspaper, the publisher will guarantee a certain number of copies will be printed and seen by readers. But they won’t guarantee how many readers will call your phone number. This model, where the advertiser pays for the number of times an ad is viewed, is called CPM advertising. The “M” stands for 1,000, and you typically pay for every 1,000 times an ad is viewed. This model still dominates offline advertising and plays a smaller role in online advertising.
But most online real estate advertising is PPC, and it falls further to the right on our spectrum. The buyer has somewhat less risk because they only pay when a viewer takes action on their ad, and presumably has some level of interest.
Why is all this important? Because most real estate advertisers treat PPC like it’s a “sure thing.” Since consumers aren’t just viewing their ad, but actually clicking it, advertisers think their work is done. But just getting clicks isn’t enough. Look at that spectrum again. You’re buying a less risky form of advertising, not a slam dunk.
Making some good choices about what happens before and after viewers click on your ads improves your chances of success. So let’s look at what you can do to create productive PPC campaigns, along with a few tips real estate brokers can use for their unique needs.
Before the click: Target Well
All clicks aren’t created equal. To maximize your real estate lead generation, you want to get clicks from viewers who are well qualified buyers or sellers.
The first strategy for doing this is obvious — content targeting. In other words, you place ads on websites that have content appealing to potential home buyers or sellers, and pay each time your ad is clicked.
A second, more common, strategy is keyword targeting. This is done on search engines like Google. Advertisers bid for their ads to appear when users search for specific terms. As a rule of thumb, a more detailed the search term, like “Providence luxury condos for sale,” will put your ad in front of more qualified leads than a general term, like “Rhode Island real estate.” Fortunately, Google and most other ad sellers have sophisticated tools for finding search terms well suited to your targets.
More recently, ad sellers have branched out into more complex forms of targeting. For example, with Facebook you can target your ad only to viewers of a specific age, or with specific interests. You can even “re-target” users who have been to your site before, so you can encourage them to return.
“Advertising is the greatest art form of the 20th century.”
— Marshall McLuhan
Whatever method you choose, targeting your ads is essential to reaching qualified buyers and sellers. The trick is finding a good balance between narrow targeting and a reasonable price. You have to judge what price to pay for clicks based on performance (more on that later), but to give a rough idea of pricing, broadly targeted keywords on Google typically cost $1 per click or less. More specific (and therefore desirable) terms may range from $1 to $5 per click. Only highly desirable terms receive bids of $5 per more.
After the click: Determining ROI
What you pay for clicks is only half the equation. The other half requires tracking the users who click on your ads and determining their value.
Systems for tracking users of your website can be incredibly sophisticated. If you didn’t know — every time you click on an ad and visit a site like Amazon.com, pretty much everything you do there is tracked and analyzed. This level of sophistication isn’t practical for most real estate brokers, so we’ll focus on a few essential steps you should take.
First, never direct click-throughs just to your website homepage. This is the equivalent of letting visitors to your office walk in and out without so much as a “hello” from the receptionist. When viewers click on your ad, they should be taken to a “landing page” where the aim is having them take a specific action, typically providing their contact information. There are many simple tools for creating such landing pages, most of which allow you to store the user’s contact information directly into your contact management or customer relationship management (CRM) software.
If you can’t implement these processes, at least be sure you go the old-fashioned route: Require anyone in the office receiving a new contact to ask how the contact found you and record this information.
However you track which leads are attributable to your PPC advertising, use your cost-per-lead as the true measure of success. It’s easy to be deceived by cheap clicks that don’t result in leads, or overlook more expensive clicks that do produce leads. Make sure you know exactly how much bang you get for your back.
Second, keep in mind that web users who click on ads will typically be early-stage buyers or sellers. A late-stage customer is more likely to be researching specific properties or evaluating agents than clicking on ads. Your PPC campaigns will generate valuable leads, but they’ll be leads that require nursing. Think about channeling these leads to newer agents, assistants, or automated marketing programs where they’ll get appropriate attention rather a quick “peek and pitch” from busier agents.
Tools for Brokers
While PPC campaigns are suitable for a wide range of real estate professionals, they are uniquely well-suited to real estate brokers wrangling with multiple agents. Easy to launch, easy to manage, and easy to track, PPC campaigns can streamline a broker’s busy marketing responsibilities.
1) Use targeting to manage lead distribution.
Because most PPC campaigns are narrowly targeted, they provide an easy means for managing the distribution of leads among agents with different territories. For example, within Google Adwords you can easily deploy the same ad to different sets of keywords. For Agent Sally, you target phrases like “Brooklyn condos for sale.” For Agent Joe you use the same ad, but target phrases like “Queens condos for sale.” Create two landing pages, one for each agent, and route the leads accordingly.
The targeting features of nearly all PPC ad venues will allow you to segment leads in this way. It’s an easy way to get leads to the appropriate agents, and avoid disputes over who gets what.
2) Use campaign tools to manage multiple agent accounts and test ads
Most PPC advertising platforms also have simple tools that allow you to mix-and-match ads, targets, and click-through destinations. This allows you to reuse the same ad for multiple agents or territories. Or, you can try different ads against the same target.
These capabilities make it easy to test what works and what doesn’t. By comparing different combinations side-by-side you can apply what works best to the campaigns of all agents, reducing waste. You can also track the expenses associated with each ad or target separately, making it easy to pass along the costs to the appropriate agent as needed.
3) Use ad limits to control budgets
With PPC campaigns you can set very specific controls on your spending. Typically you can cap the maximum amount you’ll pay for a click and how many clicks you’ll pay for in a time period. These caps can be applied to each ad or target separately.
This makes it easier for real estate brokers to accommodate agents with a variety of budgets. Unlike a print co-op ad, where you must juggle the costs and benefits among agents, with a PPC campaign you can put each agent in charge of their own budget.
4) Early-stage lead development
For large brokerages, particularly those with team-selling strategies, PPC campaigns are a great way to fill the top of your pipeline. Because PPC leads tend to be early-stage and relatively inexpensive, they’re perfect for feeding newer or lower-level team members.
5) Low creative demands
Unlike many forms of advertising, most forms of PPC advertising do not require the creation of images, graphics, or lots of copy. Often, one or two sentences of copy are all that’s required.
This greatly lowers the demands for starting campaigns. Instead of spending time and money on creating ads, those funds can go directly to generating leads.
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How do you manage your PPC campaigns? Share your insights with us in the comments below!
Published on September 24, 2014
Written by Andrew Rapp
I'm the Managing Editor at Placester, where I oversee the creation of great content that helps real estate agents be successful in their careers. When I'm not clacking away at my laptop I enjoy walking all around the great city of Boston.