As an agent, you know the current challenges of today’s real estate landscape. Inventory is low, fewer people are selling, buyers are wary, and agents are struggling to close deals. This is why lead generation has never been more important for agents trying to grow their business.
Paid advertising is one of the best ways to generate leads, but predicting the return on investment (ROI) of those efforts can be tricky.
Luckily, Luxury Presence has done the work for you. Let’s dive into how you can more easily understand your campaign performances and improve results.
Find It Fast
Paid Media ROI Calculator
If you’re spending money generating leads online, you want to know that the investment is worth it. To take the guesswork out of paid ads, we’ve built a free ROI Calculator that makes it easy to understand your campaign performance and what you can do to drive the best results.
Here’s how it works:
- Input your campaign details, including your average sales price, your monthly ad spend, and your target region.
- Share the kind of marketing activities you’re doing, or planning to do.
- Sit back and let our calculator generate your expected ROI.
- Then, get personalized insights that will help you optimize your campaign performance.
Factors affecting your ROI
Understanding what influences your paid media ROI is key to optimizing your marketing strategy and ensuring the most effective use of your advertising budget. Here are some factors to consider:
Advertising platform
There are several options to use for paid advertising, like Google Ads or Facebook and Instagram Ads. Different platforms have varying user demographics, behaviors, and ad formats, which can significantly influence engagement and conversion rates. If you’re unsure which platform is best for you, reach out to our experts for a free consultation.
Ad quality
The quality of the ads you run plays a crucial role in determining the ROI of your paid media campaigns. When your ads feature a compelling message and clearly showcase the value you’re offering, they’re more likely to resonate with your target audience. This leads to higher engagement rates and increases the likelihood of converting viewers into leads.
Compelling ads can also lead to better click-through rates, which optimizes your ad spend and improves the cost-effectiveness of your campaigns. Consider working with advertising experts to ensure the highest quality campaigns.
Average listing price
The price of your listings can also affect ROI. For example, higher-priced homes can lead to larger commissions, but these homes usually appeal to a niche market. This means you may end up spending more on ads to target these folks and waiting longer to make a sale. On the other hand, lower-priced homes might attract a wider audience, which could lead to lower ad costs and faster sales, but the commissions are smaller. Balancing these factors will help ensure you get the most out of your ROI.
Monthly ad budget
Your monthly ad budget directly affects the reach and frequency of your online advertising. A larger budget allows for wider reach and more frequent ad placements, potentially increasing your lead generation and sales opportunities.
Our experts generally recommend agents do not spend anything less than $750/month when targeting online leads. Of course, you’ll want to balance spending with the expected return to maintain a positive ROI. So, use our free ROI calculator to play around with different ad spends, or reach out to our experts to help determine the best budget for your business goals.
Your location
The region or location where you operate influences the ROI due to varying market dynamics, such as demand, competition, and average property values. Different regions may respond differently to advertising strategies, and some areas might offer higher potential returns than others based on the local real estate market conditions.
Marketing activities
Your marketing toolkit plays an important role in shaping ROI. Consider the following:
Do you have a website with MLS search?
A website with MLS search capabilities attracts potential buyers by offering easy access to current listings, increasing engagement and the likelihood of generating leads.
Does your site have lead capture forms?
Implementing lead capture forms on your site enables you to collect information from interested visitors, creating a direct pipeline for potential clients and improving conversion rates.
Are you actively using a CRM?
Utilizing a CRM (Customer Relationship Management) system helps in efficiently managing and nurturing leads, increasing the chances of conversions and repeat business, which boosts ROI.
Is your website search engine optimized (SEO)?
SEO makes your website more visible in search engine results, drawing more organic traffic and potential leads without the need for additional advertising spend.
Have you set up sequencing and automation?
Setting up sequencing and automation in your marketing efforts streamlines communication with leads, ensuring consistent engagement and follow-ups, which can lead to higher conversion rates and better ROI.
Average touchpoints
Research shows it takes at least 8 touchpoints to get an initial meeting with a lead. How often you communicate through calls, texts, and emails plays a significant role in your business results.
Why paid media?
When it comes to calculating the return on investment (ROI) for your marketing efforts, paid media stands out for its predictability and precision. Unlike organic media, where results can be nebulous and hard to quantify, paid media offers a clear and straightforward way to measure success. Here’s why:
1. Direct cost and outcome tracking
Paid media campaigns come with the advantage of clear cost structures and measurable outcomes. You can directly link your investment in ads to specific results, like clicks and conversions, providing a clear picture of your ROI. This direct correlation is often absent in organic media, where results can be influenced by a myriad of unquantifiable factors.
2. Targeted campaigns and audiences
The sophisticated targeting capabilities of paid media platforms allow for more efficient and effective campaigns. You can zero in on specific demographics, interests, and behaviors, ensuring that your ads are seen by the most relevant audience. This targeted approach typically yields higher conversion rates and more predictable outcomes compared to the broad and often unpredictable reach of organic media.
3. Controlled and consistent exposure
With paid media, you’re in the driver’s seat regarding ad placement, frequency, and duration. This control ensures a consistent level of exposure to your target audience, a stability that organic media often lacks due to its susceptibility to algorithm changes and varying content visibility.
4. Real-time analytics and adjustments
One of the biggest advantages of paid media is the availability of real-time analytics. These insights allow for immediate understanding and optimization of campaign performance. You can tweak your strategies on the fly to improve ROI, an option that’s far less precise and immediate in the realm of organic media.
Tips for maximizing your paid media ROI
To see the best return on your efforts, take advantage of the following marketing activities:
- Build a website with IDX: Create a seamless buying experience with an IDX tool designed to convert viewers into leads.
- Implement lead capture forms: Attract new business with strategically placed and designed lead capture forms on your website.
- Leverage a CRM: Streamline communication and customer needs with a powerful CRM made for real estate professionals.
- Optimize for SEO: Enhance your online visibility and ranking, making your website a standout in a competitive landscape.
- Set up sequencing and automation: Streamline your communication process with clients and leads.
- Increase touchpoints: Use multiple channels, including texts, emails, and calls to win new business. We recommend you use the follow-up schedule in our Lead Handling Guide to maximize your outreach.
Case studies
Many of our agents have seen great ROI on their ads by taking advantage of these marketing activities:
Closing a $1.5M sale from Google with a $4k ad spend
Our client Taylor Lucyk wanted to generate high-quality seller leads through Google Ads. We implemented a strategy that would direct homeowners in Taylor’s market searching for terms like “what’s my home worth?” to a high-converting home valuation landing page for a free home estimate. That lead was routed to Taylor’s database, where his sales team could follow up. This custom strategy generated over 46 seller leads, including a $1.5M sale.
Generating a 680% ROI
Despite Cindy Rosenfeld’s success in Florida’s luxury real estate market, she wanted to elevate her online presence to match her reputation. We helped Cindy supercharge her digital marketing efforts by optimizing SEO, running paid ads, and leveraging Luxury Presence’s data-driven approach for a 680% ROI and a $3M sale in just 38 days.
Maximize your advertising ROI with Luxury Presence
Maximizing your ROI is key to growing your business in a competitive real estate landscape. If you’d like guidance and support with optimizing your ads, book a free strategy call with one of our experts.
