Updated: Nov 29, 2020
So you might have heard of this little platform called Facebook and maybe you’ve heard from some of your colleagues that they are having success using Facebook ads for their real estate business. Now you might be thinking maybe you should give this platform a try and maybe you’re even thinking it might turn your real estate business into an overnight multi million dollar success.
Well you are partially right. Tapping into Facebook definitely provides a huge opportunity to reach new audiences and grow your real estate business but it's not nearly as simple as it looks.
If it was, everyone would be a multi million real estate agents. There are no free lunches in this world and there are things you should really consider before using Facebook ads for real estate. But before talking about that, let’s better understand why Facebook is such a powerful platform. Here are 4 reasons:
Reason 1: Facebook has more than 1 billion users globally
Almost 80% of the users using the internet use Facebook. This means audience reach for real estate agents is far greater than what some traditional marketing channels like poster ads, billboard ads, signage, and even TV can offer. This also means real estate agents can easily reach new audiences that they have not been able to in the past for their real estate business.
This theoretically means real estate agents can use Facebook ads for their real estate listings and show their listings to 1 billion users globally. But this is silly, no one would do that. This is why the next point makes Facebook ads very powerful.
Reason 2: Facebook ads is the most targeted form of advertising
What does this mean? Well Facebook provides marketers the ability to target very specific audiences, down to the city, region, interests and demographic level because they have so much data about their users. This means real estate agents can use Facebook ads to find real estate buyers that are very qualified and likely to make a purchase, which traditional methods like billboard and poster ads cannot do.
For example, if a real estate agent’s ideal customers are first time home buyers in Ann Arbor, Michigan, he/she can use Facebook ads to target an audience that lives in Ann Arbor, between the ages of 25-35 and recently got married since this audience will have the highest propensity to be first time home buyers.
Reason 3: Facebook advertising is still considered to be underpriced attention
This blog article from Gary Vaynerchuk, The Best Facebook Ad Strategies for 2019, provides in-depth insight into the old world of marketing vs. the new world of marketing and how attention is priced in each paradigm. Facebook ads definitely are not cheap on an absolute basis.
This article from Wordstream provides great statistics around how much Facebook ads roughly cost across different industries. Facebook ads for real estate cost on average $1.81 CPC (cost per click). That is everytime someone clicks on an ad, Facebook will charge on average $1.81. $1.81 for a single click that is not cheap at all for some real estate agents. The important takeaway here is that relative to other marketing channels like TV and billboard ads, Facebook is still considered vastly underpriced IF a real estate agent knows how to use it properly.
Reason 4: Facebook advertisement is measurable
What is measured can be improved on. TV advertising is what advertisers call a spaghetti on the wall approach. Why? Because advertisers blast their ad with the hopes of something sticking but they don’t have any insight into how effective their ad was and therefore they don’t know how to make it better.
Facebook advertising gives real estate agents data. Coupling this with web analytics on their real estate website, they can get insights around how much traffic their Facebook ad drove, how many leads they generated from it and the cost per lead. Data provides a feedback loop which helps real estate agents figure out how to run the best Facebook ads for their real estate business over time.
All these points do make Facebook sound like a great platform to consider leveraging for any real estate agent to grow their real estate business but we want to pump the brakes and talk about things you must consider before running Facebook ads.
Consideration 1: Is your real estate website optimized for lead conversion?
There is no doubt that using Facebook ads for real estate can drive a lot of traffic but it’s up to the real agent’s website to convert traffic into leads. Therefore before running any Facebook ads for your real estate business, ask yourself, do you have a well optimized marketing funnel to convert traffic into leads?
If you don’t then you can have an infinite amount of marketing budget and you’ll yield no results. What’s even worse is if your real estate website is poorly designed and does not give a good first impression. What you’ll effectively have done is pay for traffic to give potential customers a bad first impression of your brand.
Consideration 2: Are you a data driven real estate agent?
Do you know what the conversion rate is on your website? How much traffic are you getting on a weekly or monthly basis? Do you know where your traffic is coming from? Do you know how well you convert the leads you capture and close a deal on?
Without having proper analytics, you cannot possibly understand how much budget you’ll need to run effective Facebook ads. Furthermore, you won’t have the insights needed to determine which ad is working and not working which ultimately affects how much marketing dollar you waste.
Consideration 3: Do you have data tracking and web analytics?
Do you have the right analytics to provide you with insights? Does your website have the right technology set up to track data and metrics to answer all the questions above? Without tracking, you are effectively operating blind with your business.
Consideration 4: Do you have a deep understanding of your buyer persona?
Yes Facebook advertising is the most targeted form of advertising but do you know who you should be targeting? What is the demographic of your potential customer? What are their interests and demographics? Just because you have the ability to target an audience doesn’t mean you’ll target the right audience. This is critical because targeting the wrong audience also leads to wasted marketing spend.
Consideration 5: What is your value proposition?
Every potential customer will be asking the same question: why should I choose you as my real estate agent when there are thousands of other realtors in a city. Why should this audience choose you? What makes you special or your offering unique? This really comes down to your value proposition but more importantly whether you can communicate this on your website in a convincing way. If you can’t convey this message to the audience landing on your website, effectively you are wasting your marketing spend.
MUDAVEN can help
Running Facebook ads is not terribly difficult but running effective Facebook ads for real estate is a different story. We highly encourage you to assess all the factors we’ve highlighted. In our opinion if one of these things are not checked, we highly highly encourage you to address it before running any Facebook Ads to avoid wasting your marketing spend.
You don't have to be doing this alone and we are here to help. MUDAVEN specializes in user experience design, digital marketing and data analytics. Leave us a note if you’d like to chat more about whether you should run Facebook ads for your real estate business.