Does real estate marketing increase sales?
Let’s talk briefly about buyer intent, the factor that will determine how many properties will switch hands in your area during any given period of time. In most real estate markets, buyer intent is directly tied to basic economic factors. In the case of the second home market, in particular, promoting the destination is a great way to pull buyer intent from across borders. Destination marketing along with a number of government initiatives (schools, parks, crime management, transportation), economic drivers (tax incentives, financing, subsidies for the tourism industry), and initiatives in the private sector (gated communities, good-paying jobs, etc.) build intent over time. The number of potential sales is largely determined by these factors which are arguably external to the real estate industry itself. Nobody decides to buy a house on a whim. Buyer intent is most often the result of long-term factors (or radical change as discussed in this article).
This is why Real Estate Marketing doesn’t technically increase sales: It hardly ever creates new buyers. Real estate marketing determines who gets to make the sales that are very probably going to happen anyway. You might think that this is very common in marketing, but lots of marketing dollars in other industries go to attracting new customers who don’t already consume a competing product. In real estate marketing, every lead that you generate is a lead that would have otherwise ended up with one of your competitors at worst, or one of your colleagues at best.
This is where relevant traffic generation comes in. Pay-per-click campaigns are a highly effective way to get your message in front of eyes that are looking to buy in your area, but they need to be understood and managed correctly or they can be a huge waste of money. For example, let’s look at social media ads and how they can be useful (or not).
Social Media Ads for Real Estate
Social Media ad campaigns are often attractive due to their surprisingly low cost per result and the fact that they allow us to target potential customers by area and interests. When social media advertising first became available, it looked like the holy grail of advertising. As advertisers, we suddenly had the ability to pinpoint our audience like never before. Imagine this: Before social media ads, if your target audience was, let’s say men between 40 and 60 years old who make more than 100K per year and live in Colorado and you wanted to show them ads, you had to identify multiple outlets where you thought your audience would be exposed to your message – Newspapers, magazines, radio stations, roads they were likely to take – then have your ads designed and adapted to all these different formats at great cost – and all this to achieve impact rates below 1% which most of the time you couldn’t reliably measure or attribute to the campaign in the first place. Even if you picked the best-matching media outlets, only a percentage of the public would actually be in your target audience, and only a fraction of those would pay attention to your ad, and then a fraction of those would do something about it, and you had no way of knowing who’s who and whether or not your money was better spent elsewhere or not spent at all.
Compare that to the world we live in today, where social media platforms know everything there is to know about us. They know where we shop and what we buy, where we work and how much we make, what we eat, who we hang out with, and everything we say to each other, all the time. It’s an advertiser’s dream. Social media ads took the guesswork out of the equation when it comes to targeting, attribution, and audience segmentation. Many companies saw the ROI of their advertising efforts go through the roof practically overnight. Social media advertising became one of the most requested services in no time. Then 12-15 years went by, we gathered tons of data, and now we know that social media ads work great for some things and not so great for others.
The closing rate for real estate leads that come from social media alone is very low, and in my opinion, should only be reserved for those who have the human resources (or automation in place) to weed through a high percentage of low-intent leads and sometimes flat-out spam. Targeting your audience based on demographics, interests, and geolocation and trying to sell them your product is a great strategy for a local shop, an eCommerce site, or almost any product under a few hundred dollars, but it doesn’t do much for real estate where the buying process is not impulsive and leads may need weeks or months of nurturing before closing. If you run social media ads for real estate, you will eventually close sales on those low-cost leads, but and the end of the year you would have spent less per sale with other types of ads, no weeding necessary.
Does this mean that you should not invest any time or money on social media? Of course not, in fact, social media management and social media marketing are still some of the services we include on many of our real estate advertising packages, and here’s why:
Successful real estate professionals should be considered an authority by their peers and an example by their community. Becoming a local authority is the path to long-lasting success in real estate, and social media can be a great means to that end. Write a blog and share your posts all over social media. Share local events, host live property showings, share lifestyle tips, and share content by local charities. Establishing yourself as a local authority in your area makes you a more attractive choice to buyers, sellers, and colleagues alike, and it elevates the value of your brand in the long term – so you should definitely do it. Just don’t spend a disproportionate amount of your budget or time on it because on most of your sales even today, social media won’t play a role at all. Successful real estate marketing is not about planting the idea of buying on unsuspecting social media scrollers, it’s about timing, volume, and share of voice.