The common goal all real estate agents and business owners share is the desire to generate more seller and buyer leads.
But with the growing number of lead referral platforms, increasing subscriptions and more recently the approach by the major portals to selling vendor leads to agents for $199 a pop, it’s getting harder to win the race for attention and the race to relationship with potential buyers and sellers.
By focusing on the data you already have, you can achieve more effective lead generation results, at a lower cost, than through any other third party platform, software or service provider. Period.
I recently presented on this exact topic during our sold-out Social Media Advertising Masterclass roadshow around Australia. Check out my session slides here.
Here’s a recap of what we discussed.
Consumers have completely tuned out to (non-personalised) advertising
Think about the last time you Googled something. Did you scroll past the ads at the top and go to the first ‘free’ (organic) search result? You’re not alone – 86% of Australians do exactly the same thing.
Do you have pay-TV in your home and you record your favourite shows? Do you skip the ads? Or, mute the ads on free-to-air? Yep, we all do that too.
Costs are going up. And up. And up.
Remember when advertising on the portals was free? I do. I was just starting out in real estate and just like every other real estate business, we handed over our data for the promise of free advertising.
You all know what it costs a vendor (and in some businesses, you) to advertise on the major property portals today and you’re likely aware of the growing number of VPA services that fund the cost of advertising with little or no upfront cost, allowing you or the vendor to pay it back over time. It’s effectively the Afterpay of real estate VPA – advertise now, pay later.
Remember when you could post something to your company Facebook page and reach most of your followers? Yep, that costs more now too.
Back in 2014, the average organic reach for a brand page on Facebook was 16%. This year, that number now sits at 0.09%, however, in the same period, Facebook’s share price has more than doubled.
We are paying much more than we used to for the same (if not less) amount of reach on almost every digital platform and if you’re getting lots of reach at a low cost somewhere now, get ready for this to change as well.
The portals are gaining more power (and we’re letting it happen)
In our consulting work more recently, business owners have been voicing their curiosity about the increased push by the major property portal reps to secure long term contracts with real estate offices – some 24 or 36-month agreements.
While listing volumes are down, the major property portals have had to come up with new and creative ways to bolster their share price. So this move is not surprising. In fact, it’s actually kind of brilliant.
Furthermore, depending on their subscription level, some real estate businesses must use the dedicated social media advertising products of the respective major property portal on all of their listings. On the surface, this seems great.
More traffic to my listings = more eyeballs on me!
How do media companies a.k.a “the major property portals” make money? Advertising.
How do they convince advertisers to spend more money? Traffic.
How do they generate traffic? You can see where this is going.
Social media advertising is one of the cheapest forms of advertising to drive mass traffic to a listing on a website so it’s no mistake that the major property portals are making it harder for real estate businesses to say NO to their social media advertising products.
And this leads us to…
Back in the ’90s, you had to pay “big media” for access to their audience. Now, you can access the same audience yourself, through Facebook, your CRM and your website, for a much lower cost – provided you know what you’re doing.
Once people are on your website and in your CRM, you can do so much more with those pieces of data (contacts) than if you let your data (contacts) live on someone else’s website.
I’ve met three businesses in the past month who get their marketing manager to attend almost all of their listing presentations with the salesperson to share with the homeowner their approach to “pre-portal” or “pre-market” property campaigns using Facebook, Instagram, Google and email to drive people to the listing on the only place it appears – the agency’s website.
Pre-portal or pre-market is the art of selling property to a buyer in your database or from social media prior to, or without, listing it on the major property portals.
Rather than a vendor splurging on the top-tier advertising packages straight-up, there is a growing number of agents advising their potential vendors to spend less, but spend it on a highly sophisticated and targeted advertising strategy that takes the property to prospective buyers, before they go looking for it on the portals. Vendors are loving it and a tonne of property is being sold this way with zero money spent on the major property portals.
Why would you take the marketing manager to a listing presentation? Because they study this social media stuff, day in, day out. They understand it. Every salesperson today is pitching social media advertising in their presentations but the marketing manager can, typically, go much more in-depth and demonstrate to a vendor the targeting options, the placement options, how they’ll reach the right buyers etc.
Agents: If you don’t understand this stuff, then you can’t sell it to a vendor the way your marketing team/manager/assistant probably can. Work with your marketing team to SHOW vendors how powerful this medium can be and how it will keep more money in their pocket.
One business we met, in particular, received 1,052 buyer enquiries via their website in the first quarter of 2019 for a total advertising cost of $5,000 – spent entirely on social media advertising.
This particular business doesn’t use this approach for every listing, but they have sold $199m worth of property in the past 18 months with zero portal advertising, which accounts for 34% of their total sales. If a property doesn’t sell in this initial “pre-portal” period, this business is releasing it onto the market with the portals BUT only on one of the lower tier plans.
How many buyer enquiries would you expect to receive from the major property portals for $5,000 worth of ad spend? It’s likely less, much less than the example above.
Generating vendor leads: A different approach
The common misconception about remarketing is that you should run ads for your listings to people who have been to your website to look at listings. While this might generate a buyer lead, chances are it won’t. We know this because Google Analytics tells us.
If someone visits your website to look at a property but they don’t enquire, chances are it didn’t suit them or they had no intention of buying anyway – they were just ‘curious’ locals.
However, if someone local to your marketplace has visited your website to look at listings, it’s possible they own a property in your service area. Instead of treating these people like buyers, some businesses are treating them as potential vendors and sending them ads across social media like this:
This ad is being shown to people who have visited the listing pages of a real estate agency’s website in the past 7 days, therefore the audience is constantly refreshed. This particular agency spends $5 per day on this ad, which runs continuously, and in the past 30 days, it has generated 6 vendor leads for a cost of $25 per lead.
This ad runs for 30 days at a time at $5 per day. And in the past 30 days, it has generated 11 vendor leads for a total cost of $13 per lead.
So in total, 17 vendor leads generated for a total cost of $300.
17 leads x $14,000 (their avg. GCI) = $238,000 potential revenue from a $300 ad spend
Not bad, huh?
While some might be complaining about the tactics by the major property portals and referral websites to ‘selling leads’ back to agents, others like our friends in the example above are using their own data – their CRM lists and their website traffic – to generate leads at a much lower cost.
They have made it their business to learn how to do this stuff.
It makes a lot of sense why the major property portals would make their social media advertising products ‘compulsory’ on their subscriptions – it gives them lots more traffic that you and/or your vendors are paying for.
But here’s the thing, traffic from listing ads on social media do not convert very well at all. The major property portals know this so it’s likely they are using this traffic for the purpose of:
- Convincing advertisers to spend more money (“Hey you, look at how much more traffic we get over our competitors.”), or
- Remarketing other services/products to those website visitors
There is a growing number of businesses who are right now reducing their spend on the major property portals to focus more of their efforts on this “pre-market” or “pre-portal” strategy across social media and email, and then retargeting that traffic on their office website for the purpose of vendor lead generation.
It looks a little something like this…
The battle is on. And it’s the battle for attention and the race to the relationship with buyers and sellers.
Understand, if you combine your CRM contact list(s) with Facebook/Instagram’s users, you have access to the exact same audience as the major property portals. The. Exact. Same.
The more we as an industry keep handing over our data to third parties, for them to sell it back to us, the more reliant we will be on these platforms into the future.
But the sooner you put in place a system for using your own CRM data, website and social media advertising to win the race for attention from potential buyers and sellers, thus generating opportunities at a much lower cost, the better off you will be.
I’m not suggesting you stop using the portals completely, but rather consider all of the advertising possibilities available today and into the future.
Do you and/or your vendors really need to go all out on the top-level portal subscriptions? Or can you scale it back and look for wins in other platforms that drive traffic to your website and generate enquiry (and leads) at a lower cost? Which approach gives you and your clients a higher return on investment?
Who’s winning the race to the relationship?
I certainly hope it’s you. Or at least it will be.