When I first started to work with real estate investors, one thing I was surprised to learn was that a large number of them were using mailers as their main (or in some cases, one and only) marketing channel. Now that I’ve been immersed in the culture a bit, this doesn’t surprise me at all. In fact, it makes a lot of sense.
But at the time it surprised me, because so many other companies I worked with were focused strictly on digital marketing. I thought it was only archaic companies stuck in the past that were still sending mailers, like my local grocery stores. Now however, I take a much more nuanced approach because I understand that you need to 1) do what works and 2) be where your customer is, and if they’re combing through mailers looking for a way out of their house or situation, then mailers work.
Do I think digital marketing is still going to increase in this industry? Definitely. You can’t deny that more and more people are continually paying attention (and it is a currency) to online media. But I’ve since learned that it really just depends where your target customer is. Yes, chances are they probably are online somewhere, but if mailers are working for you – why stop?
Anyway, the point of this article isn’t to beat up on mailers. The point is that over time, I found that a lot of investors were new to digital marketing. They didn’t have a website, weren’t on social, and didn’t know anything about running ads online. So in this article, I thought I’d try to write a “beginners guide” to getting into digital marketing.
So if you’ve been crushing PPC for a while, you have a killer website, and you’re doing just fine, this article probably isn’t for you. But if you’re new to the REI world and not sure where to start with your marketing, or if you’ve been around a while but haven’t really tried to identify any online channels, hopefully you’ll find this helpful.
First, you need to know the basics of measuring your ROI
The first thing you need to know, is how to measure your ROI on each of these online channels. If you don’t measure it, or don’t know what metrics to track, you’re going to end up spending a lot of money, or not enough money, and hurting yourself in the long run.
These concepts are really basic and simple, but again, this is for beginners who are just wrapping their heads around this for the first time.
CPC or “cost per click”
The amount you pay to get someone to click your ad. Most online platforms that run a PPC (pay per click) model will display this for you. Often, this is run through an auction-style platform, so the actual cost to get someone to click to your website will be determined by how competitive the landscape is, and what your competitors are paying. So if you’re using Adwords or Facebook Ads, and you choose a really niche audience, and there are almost no competitors, and you’re limited to a small geo area, you will probably pay less for clicks than if there are lots of competitors targeting your ideal customer. Point is, this cost fluctuates based on what other competitors are willing to pay, and the cost is driven up by competition.
CPM or “cost per mille”
The amount it costs you to get 1,000 impressions or “views” of your ad. I say “views” because we’ve all scrolled through our feeds and been shown ads that we payed zero attention to. Technically, they showed it to you though, so that counts as an impression. This is just another way some platforms let you choose to pay. For example, Facebook will let you choose to pay by “impressions” or “clicks” – you choose. Paying for clicks is probably more expensive, but you know you paid for someone to visit your URL. Paying for impressions, you just “know” Facebook showed your Ad to people’s feed. Typically when you pay for ads based on impressions, you get a much cheaper price – but the number of clicks to your site or leads you acquire may also be very low. It really depends on platform and ad campaign you have going.
CPL or “cost per lead”
How much it costs you to get a “lead” – whatever that means to you. If you have a website, this is likely someone calling you (tracked through Call Rail or some other system) or filling out a form with their contact info, and potentially their address.
So here’s where we can use some simple math:
Let’s say you’re working with a PPC model (for example, Adwords or Facebook) and your CPC is $25. Of those who click, only 1 in 10 fill out your online form. So your “conversion rate” for a lead is 10%. If you’ve run that campaign long enough, you’ll know you can somewhat count on that rough conversion rate. So you pay $25 for one click over to your site. But you need 10 clicks, because it takes 10 to get 1 conversion. So you paid $250 for one lead.
Now, after all that, you still didn’t necessarily close that lead. So what does it actually cost to close a deal? That’s the last metric we’ll look at…
CPA stands for “cost per acquisition”. In layman's terms, it means ‘how much it costs you to land a deal, or acquire a customer.’ Let’s use some nice, round numbers for our example. Let’s say 1 out of every 5 leads ends up closing with you. We already determined that it costs you $250 to get a lead, so 5 leads would cost $1,250. Since it takes 5 leads (roughly) to close 1 deal, you’re paying $1,250 to close that deal.
If your profit on that deal is $5,000 or $10,000, then that’s pretty good. And if you landed on a campaign where these numbers were fairly consistent, you should probably spend a good bit of your budget here, because in all likelihood, things only get more expensive over time. You may mine that channel while you can.
If you would’ve started with Adwords or Facebook Ads when they very first started, you would’ve been paying $2-3/click! So if you find a metric that works for you, stick with it and if anything, work on decreasing your cost of conversions by writing better headlines, creating better ads, etc.
OK, so now that those basics are covered, I’ll give a really rough overview and introduction to some of the channels available to you.
Pros: get in front of people looking for the exact service you offer when they’re searching for it; target by search phrase; proven and reliable.
Cons: competitive and costly, especially for REIs – but you can still make great profit if you know what you’re doing.
This is the one most investors are probably the most familiar with. It’s been around a while now, but for anyone not familiar, these are the results with the green “Ad” designator next to them that show up above and below the search results that display in Google.
The idea here is that you target specific “keywords”; search phrases that motivated sellers type into Google to try and find companies like yours. You basically “bid” to get in front of them, creating the Title and Description you want them to see, and specifying which page the searcher should go to if they click your add.
So basically, you:
- Decide which phrases/searches you want to be shown for.
- What you want your Ad to say when they search.
- Where you want them to go when they click.
- Then when a potential customer searches that phrase, they see your ad (assuming you bid enough to get in front of them)
Now, that’s a very simplistic summary. Adwords can get pretty involved. You can track your conversions on it, display different ads to different audiences, searching different phrases, and tons more. You can specify that your ads only be shown to certain zip codes, or test out any number of ads one against another, to see which performs better or gets a lower CPC.
I don’t know as much about this as my nerd counterparts who run PPC campaigns all day every day at Adwords Nerds, so for the purpose of this introductory article it’s just important to know – this is what to use if you want to pay to be in front of people using Google, at the exact moment they’re looking for your service. In my opinion, although it’s expensive, it’s one of the best platforms to guarantee that people are actually in the mindset of looking for you when you pay to be in front of them.
Pros: incredibly specific targeting available; get super specific with the kind of person you want to get in front of; less competition with other REIs than Adwords (for now).
Cons: viewers may not be looking for your services, and find them a nuisance; can be complicated to learn.
Facebook, on the other hand, works a little differently. With Facebook or Instagram, people aren’t necessarily looking for the kinds of services you offer. At least, not at the moment they’re browsing. You’re getting in front of people while they’re using the social media platform(s), so they may just be trying to check-out mentally and connect with friends. Or, they may be intrigued by what you have to say. It depends on them, and the quality and relevancy of your ad.
For real estate investors, my take is that Facebook and Instagram are far less exploited. This means if you have a smaller budget, you may be able to get in front of more people here, but you’re going to have to experiment and really measure your CPA to see if it’s worth it.
The cool (or scary) thing about Facebook is that you can get really, really specific with who you target. Whereas with Adwords you’re choosing when to be shown depending on the search someone makes, with Facebook or Instagram, you’re choosing the profile of the person you want to reach. So again, they may not necessarily be looking for what you offer at the exact time the ad is shown, but you can be pretty specific.
For example, you could target customers on Facebook who:
- Are men, aged 50-65
- Live in Austin, TX
- Like “hunting”
- Like certain Facebook pages or groups
- And display a purchase behavior of buying things online
You can get even more specific than that. Like I said, creepy.
Pros: searchers are more likely to trust you; gain passive leads and traffic once ranking well, without continuing to pay.
Cons: can be competitive; takes time and an investment of time/money/work; algorithm changes may fluctuate results.
SEO stands for “search engine optimization”. Basically, the idea behind SEO is that when someone searches for services you offer in Google, Bing, or other search engines, your website comes up in top results on the front page, and you can have a shot at getting clicks and leads “organically” (without paying to be there).
This is the hardest of all the channels, because…
- You have to know what you’re doing
- It takes time (it can take 3-6 months to see serious movement), and a few markets are REALLY competitive
- You have to do things the right way (not game the system for short-term game, which you can be sure a lot of your competitors are doing)
- The algorithms these engines use are changing constantly
- It requires lots of work, with no guarantee of ranking
However, for all the difficulty, the payoff can be high. See, whereas with Adwords or Facebook, you start paying and you start getting shown to people, the moment you stop paying, you’re gone. Not so with SEO.
Once you’re ranking, provided you keep up with necessary updates and continue building signals that Google looks at, you could remain there for quite some time. That means that after you pay to have your site optimized, or do it yourself, you could reap the benefit of organic leads for years to come. SEO is momentum based. Once you start ranking well in a few areas, your whole site can get more traffic, your authority in Google’s eyes goes up, etc.
The other benefit is that searchers likely trust organic results more than paid ones. That’s probably true for you, if you think about it. Most people will trust organic because they couldn’t pay to be #1. If they’re ranking in the top #1-5 positions, we assume they’re there by merit. Google strives to serve the best results, so they must be the best. Companies who pay for ads on the other hand, aren’t necessarily the best, they obviously just want our money or lead information. Personally, I scroll right past Google’s Ad results 99% of the time.
So it’s a lot of work, but a lot of payoff if you do well.
Pros: target specific subreddits with niche audiences; Reddit is a passionate group of folks that seem to really get behind things they like.
Cons: the audience there can be critical/brutal if they think you aren’t providing value; still costly as an auction bid system.
And last but not least, I’ll throw Reddit as a potential ad channel for you. Reddit operates much the same as other PPC platforms, allowing you (last I looked) to pay for ads based on clicks or impressions.
Some distinguishing features of Reddit
- You can display ads only on certain subreddits. For example, if you wanted to target other investors with properties you were selling, or your newest ebook, you could run an ad on this subreddit – and it would only be seen by Redditors who had joined there.
- You can choose to simply display an ad that goes to a landing page or URL you specify, a video, or write a post. So let’s say you feel that you’ll get better engagement with a post than with a simple ad; you could ask a question, or write post, leave a full description, get comments and feedback, then still leave a URL they can click. Or, you may decide that a simple headline that leads to your URL is better. Reddit gives you the option. And video seems to be brand new for them.
- They’re very opinionated, passionate, and seem to either rally behind things they like or critique and tear down things they don’t, or view as “spammy”.
I’ve experimented some with Reddit, but not enough to tell you how pricing differs. I’m also not sure it’s as good of a fit for motivated sellers, but for reaching other REIs, it may be awesome.
Niche communities (like this one) and more
Finally, you can find ways to get connected to niche communities like this one. A lot of platforms like RealEstateInvesting.com offer valuable ways to get in front of the audience there with your message. It may not be motivated seller specific, but if you want to get a message in front of other investors, the advantages here are that 1) you’re part of the community, 2) you know the quality of the community and interaction, and 3) there is likely much more trust – because you’re “one of them.”
In summary… think about identifying a digital channel for your business, if you haven’t already.
Hopefully this has been a helpful, rough overview for those of you considering getting into online marketing. As more and more people do more and more things online, I think finding a digital channel will become increasingly important for real estate investors.
That’s not to say that mailers won’t always have some impact. It’s only to say that in 10 years, you’ll be mailing things to a generation that has grown up taking the contents of their mailbox, looking quickly through for real letters from people they trust, throwing the rest away, then going back to their phones (or maybe eyeglasses at that time), where they’re paying the most attention.
Think about TV ads. People used to sit through them many years ago, even if they weren’t that interested or would tune them out. Now, we’re down to 10 – 30 second ads on YouTube, and even some of those can be skipped.
The point is: people become calloused over time to types of advertisements they’ve had lots of exposure to. Mailers will be one of them.
Will some who are checking the mail for foreclosure notices, and in a tough spot be receptive to your offer? Very likely yes! But in the event that you want to identify some new channels to get in front of people, I hope that this was helpful to give you an overview of the landscape.
Wherever you end up, make sure that you’re measuring your CPA closely and that you find a channel that’s working well for you, and focus heavily there.