The Proper Place for Pay-Per-Click in Multifamily

Pay-Per-Click

Once the king of advertising mediums, television hit an all-time low in Week 9 of the NFL season when ratings dropped 16 percent year-over-year.

With even the most popular live sporting events losing viewership, advertisers that once relied on TV are more often turning to online channels, primarily pay-per-click (PPC) ads on Google. Some multifamily operators who never advertised on television are looking to follow suit.

But just as TV wasn’t an effective advertising medium for multifamily marketers, PPC might not work for a number of reasons:

Cost
The more you spend on television advertising, the more effective it is. PPC works similarly. The more you spend on PPC advertising, the more often your ad is displayed to prospective residents.

Then, there’s the competitive nature of the auction process for keywords. Commonly searched terms, like “Los Angeles apartments,” generate a lot of competition. Nearby apartment communities, real estate agents, brokers, Internet Listing Services, developers and even renovation specialists are all vying for traffic from the search term. Costs can be as high as $5 a click.

Longer tail keywords, like “west beverly hills three-bedroom apartments with a pool,” can cost less, but create significant strain on management to optimize for broad renter reach.

Google also adjusts their rates based on how relevant your content is to the keywords you’ve chosen. An ILS with a large inventory of Los Angeles apartments might pay significantly less due to their popularity with renters.  Because single apartment communities lack the same inventory, they are often viewed as less relevant and will pay a higher rate

Low conversion rates
If you bought one 30-second television ad during the Green Bay Packers vs. New York Giants Wild Card playoff game, 39.3 million people could have seen your ad. Yet, a very small fraction of them would have even considered walking into one of your apartment communities.

Conversion rates for paid-search ads aren’t quite as low, but only 1.91 percent of Google users click on them according to a WordStream study. Long-tail keywords perform a little better than the popular search terms, but still don’t perform as well as organic search results.

Lead Attribution
It’s impossible to know whether a person who watched a Lexus ad during the Super Bowl went to the dealership to buy a new Lexus. Even if Lexus asked them why they stopped in, studies have proven that the consumer’s response is unreliable.

Just because a person clicked on your PPC ad doesn’t mean the ad is what led to the eventual conversion. In fact, many users click on that ad after they’ve already been exposed to the community through ILSs, online review sites or driving by the community during their commute. They might not be actual new leads.  

When you consider running an SEM campaign, think about putting your keywords into two buckets — brand keywords and non-brand keywords. If a user types in your property name specifically, that is a brand keyword. You should likely assign the lead credit to the place they found your property name. If it is a non-brand conversion, such as from the search term “west beverly hills three-bedroom apartments with a pool,” that’s a great lead.

Breaking out brand vs. non-brand results will help you avoid the mistake of assuming a new lead came from SEM when a user was simply doing their due diligence after finding the property on an ILS.

Even with these challenges, PPC does have its place in your marketing mix if you have enough room in your budget. Bid on keywords specific to your community to attract the most high-quality renters. Also bid against your competitors to gain exposure to renters who may not have previously considered you. To ensure you’re maximizing your marketing budget, keep your PPC strategy in alignment with your other inbound channels. Strategic keyword bids will help you reach renters at the right stage in their search experience.