I believe that the next few years will see an explosive growth in the use of Pay Per Click advertising by Realtors® As the market changes and more agents compete for fewer buyers, the perennial challenge of how to generate new business will become even more important. Unlike Search Engine Optimization — the systematic development of so called “on page” and “off page” elements of a web site to help target “free” search engine results — pay per click campaigns are easier to begin and have a lower cost of entry.
To be sure, there are many ways to go wrong with pay-per-click. Targeting the wrong keywords or not budgeting your bids correctly is a common mistake. Even worse, you may direct the click that you paid for to a page where it won’t do much good. A common mistake is to send pay-per-click traffic to the home page of a web site, but what you want is to send your prospects to a page that is most directly related to your ad. Are you advertising “Springfield Condos”? How about a list of Springfield Condos — or better yet, a call to action to sign up for a list of Springfield Condos. Your headline, your short pay per click ad text, and your landing page should all conspire as much as possible to create a useful lead for you. What’s worse, even the best laid pay-per-click ad is likely to only attract about 1/3 of the traffic as a well placed “organic” (non-pay-per-click) search position. The reason? Well, buyers assume that the free positions are really more relevant to what they’re searching for than the paid positions.
For all the problems and limitations of pay per click — in real estate or otherwise — the reason I like pay-per-click so much hinges to a large extent on a comparison between pay-per-click and direct mail. Having been in real estate for some time now, I’ve tried many approaches to getting new business, some free but time intensive, and some easy but money intensive. Of all the great sink-holes into which my dollars have been ill spent, direct mail is one of the greatest.
When you think about it for awhile, it’s easy to see that direct mail cannot hold a candle to a technology like pay-per-click. Direct mail marketers have been saying for years that there are three main components to a successful direct mail campaign. To quote a list that appears widely on the Internet (for example, at the Entrepreneur’s Help Page), a successful direct mail campaign involves three things:
- The mailing list or target audience
- The offer or incentive for the customer to buy the product
- The creative package or communication message conveyed in the overall package
Well, OK, so far so good. Why should direct mail be any worse than a pay-per-click ad, then? The offer to buy is likely to be the same — a free CMA or a discount on a closing cost or a promise of better service or the like. No harm there. And the Internet does offer the ability to convey a communication message with color and allows the user to respond perhaps more easily than a return mail card, but that still isn’t it.
Look at your first component, the mailing list. We’re told direct mail marketers say this accounts for 40% of the success of a campaign. Now ask yourself, which of the following is better. (Let’s assume for the sake of an interesting place name that you sell real estate in Schenectady).
List #1: Everyone who might buy or sell a home in Schenectady, someday, or not, regardless of their interest level or willingness to do something soon.
List #2: Everyone who just this minute searched for Schenectady real estate on a search engine and clicked on an ad about it.
Now let’s say you could send one message to List #2, for about the same amount of money as you could spend to send two messages to List #1.
Well, in the case of Schenectady, that’s just about exactly what the numbers are. Here are the amounts on Overture for the top five bids for the keyword Schenectady Real Estate, as of today:
$1.02
$1.01
$1.00
$0.82
$0.80
In other words, $1.03 gets you into first place. Sure, one or two of your competitors may bid higher, but you’ll still appear prominently on the page. Those of you who have sent postcards know that that’s probably less than the cost for two postcards, designed and in the mail. The question is — how many postcards do you really have to send before you reach that one person who’s at least as minimally interested in Schenectady Real Estate that she’s searching for it online? Ten? One hundred?
And while we’re on the subject, that postcard probably doesn’t have a response piece (except perhaps your phone number). Your offer on your Schenectady Real Estate landing page can have a place for them to sign up for email updates or anything your mind can conceive, or as much information as you want to convey about your services or your specials. Your phone number, an offer form where the lead goes to you — whatever you want.
As more and more agents realize that what they’ve purchased with their web site is a rather expensive postcard with no postage on it, I believe pay per click will continue to grow in popularity. I believe that reaching one person who’s searching for something beats reaching about ten who aren’t, so pay per click is a great bargain compared to direct mail. I’ll take one person looking for “Mytown Luxury Homes” at five bucks per click over ten recipie cards in the trash for five dollars any day of the week.
In traditional real estate, “those who list, last”. Internet marketers, competing with colleagues pouring money into the vast direct mail sinkhole, have revised the motto to read, “those with the best list, last”.