By now, most multifamily marketers advertise their apartments online with pay-per-click campaigns on Google, Meta (Facebook), and others.
PPC advertising is one of the most effective lead-generating marketing channels today, as there are no fixed costs to use them, and you can adjust how much you want to spend whenever you want.
To get the most out of this channel, you need to understand how Google and Meta charge you to advertise your apartments on their platform and how much is a reasonable amount to spend for your community.
In this blog, we'll provide more context into:
- How your apartment community's unit count and property class affect how much you should expect to spend on digital ads.
- The three pricing models that Google and Meta use to charge advertisers.
- The factors that influence the cost of multifamily PPC campaigns.
How much should I expect to spend on PPC advertising for my apartments?
Before going into the details of how much advertising platforms charge you or the factors determining the price you pay every time someone clicks on your apartment community's ads, let's discuss how much you should be prepared to spend.
Typically, the more units in your community, the more you'll need to be willing to spend because you have greater need for traffic and awareness online. Meanwhile, smaller communities (100 units or less) can safely spend less on their digital ads and still get the amount of demand necessary to achieve occupancy targets.
On average, A-class properties spend between $300 and $1,770 per month on their PPC ads, B-class properties spend between $240 and $1,080 monthly, and C-class properties spend between $150 and $420 monthly.
Same rules apply for your property class. Marketers at luxury communities will probably have to spend double or more than a C-class property would on digital ads to compete for traffic and awareness.
To show how this plays out, we ran a quick snapshot of our clients' daily combined budgets for their Google and Meta ads in July 2023—right in the heart of the busy leasing season, when budgets tend to be higher to address the increase in turnover that occurs.
Daily High/Low Budgets For
Google & Meta Ads
On average, A-class properties spend between $300 and $1,770 per month on their PPC ads, B-class properties spend between $240 and $1,080 monthly, and C-class properties spend between $150 and $420 monthly. These are the benchmarks for the maximum amount you could expect to budget each month on your apartment's digital ads, with your community's unit count factoring into which end of the range you'd be.
(If these prices may seem high at first glance, note that many of our clients have eliminated many or all of their ILS packages and moved the bulk of their marketing budgets to PPC.)
How do Google and Meta charge apartment marketers to use their advertising platforms?
Google and Meta share three pricing models for advertisers:
- Cost-Per-Click (CPC)
- Cost Per Thousand Impressions (CPM)
- Cost Per Acquisition (CPA), a.k.a. Cost-Per-Action
Cost-Per-Click (CPC)
As its name implies, cost-per-click is the most straightforward pricing model to understand (which is why CPC ads are the most popular). CPC campaigns intend to drive traffic to the advertiser's website. Google and Meta charge advertisers each time someone clicks one of their ads.
CPC is the best and most practical payment model for your apartment's ads, but discussing the other payment models while we're here is still important.
Cost Per Thousand Impressions (CPM)
An impression occurs anytime an ad appears. Advertisers who choose this payment model have little intent on pushing browsers to their website but solely want to increase brand awareness.
As an apartment marketer, it's critical to understand that your apartments aren't for everybody and that using ads to grow your community's brand is not advisable (more on that in the next section).
Cost-Per-Acquisition, or Cost-Per-Action (CPA)
Advertisers who choose the cost-per-acquisition or cost-per-action models pay only when one of the results of their ads is a purchase (or other specified action).
Deciding which pricing model you prefer is only just the first step. Ultimately, how much you're willing to bid on any ad campaign influences the costs you owe either Google or Meta.
But when your community is experiencing an uptick in vacancies, and you need to drive more prospective renters to your website, your best outcome will be using PPC ad campaigns.
That said, even though every community can afford PPC ads, various factors affect how much those PPC campaigns actually cost your apartments.
Next, let's dive into what influences the costs of PPC campaigns.
What factors influence the costs of a PPC ad campaign?
For both Google and Meta, advertising is their top source of revenue, and both companies care tremendously about maintaining the popularity and usage of their platforms.
That's why both Google and Meta structure their advertising services to prioritize ad campaigns to ensure that only the most relevant ads to an individual user's needs appear on their platforms. If they don't, people will stop using their platforms, ad engagement will diminish, and advertisers will opt for more effective platforms—all of which have massive implications for both Google and Meta's profitability.
While they allow advertisers to bid for the placement of their ads in an auction format, they purposefully avoid running ads for only the highest bidders (even if that sounds counterintuitive to revenue generation).
Paying for digital ad campaigns for your apartments only to say you're using digital ads, especially if they're not relevant or specific to you, can lead to spending more money on marketing than necessary. Understanding this before implementing or adjusting your community's ads strategy is essential.
Neither Google nor Meta wants to make money by letting a minority of big brands outbid the competition; they want to make money by displaying ads with the highest probability of resulting in a click, impression, or conversion—all of which produce a profit for those platforms. And they also want to encourage more digital marketers to advertise on their platform and benefit from their unrivaled reach and visibility.
Google makes it clear how they ensure relevant PPC campaign ads appear. They apply a Quality Score to each by measuring an ad's relevance to its target keywords, website user experience, expected Click-Through Rate, and other signals. It then determines which ad is best for an individual user through a metric called AdRank, which calculates an advertiser's maximum bid multiplied by its Quality Score.
The graphic below portrays how Google's AdRank and Quality Score measurements influence how many times an ad campaign's effectiveness and, most notably, the effect on cost-per-click.
How does this all tie back to how much digital ads cost for your communities?
- Targeting keywords most relevant to someone searching for your apartment community online will help you earn more qualified traffic to your website for the lowest possible price.
- Running defensive campaigns that target your community's name and location is best for directing your best leads to your apartments, and those ads are affordable for nearly every marketer's budget! (Here's how you can target renters with PPC campaigns.)
- Knowing that your ad campaigns target your desired audience means you can safely adjust your maximum spending budget anytime.
- Ads that target broader or less specific keywords will be more expensive.
- Spending more on an ad campaign is not a guarantee of its success.
Remember, Google has a business incentive to show the most relevant ads. So if you're trying to get an ad for your apartment community in Chicago by targeting the keywords 'apartments for rent in Chicago,' Google cannot specify that an advertisement for your community is the best fit for that search query. You'll ultimately pay Google more if the broadly-targeted ad does appear.
Other factors which drive up ad costs that are also worth mentioning include:
- Poor ad design.
- No discernible call-to-action to prompt someone to click on the ad, or if there is a call-to-action, but it's too powerful (try saying 'See Floorplans' or 'Take Virtual Tour' instead of 'Rent Now').
- Ads point to a website that has broken pages or isn’t as helpful as it could be.
To be clear: Paying for digital ad campaigns for your apartments only to say you're using digital ads, especially if they're not relevant or specific to you, can lead to spending more money on marketing than necessary. Understanding this before implementing or adjusting your community's ads strategy is essential.
Summary
- To optimize PPC campaigns, understanding the pricing structures of Google and Meta is crucial, along with determining appropriate spending levels for your community's unit count and property class.
- Apartment communities with more units generally need higher ad budgets to drive traffic and awareness. Luxury properties may require double or more spending compared to C-class properties in order to compete effectively.
- Google and Meta present three pricing models: Cost-Per-Click (CPC), Cost Per Thousand Impressions (CPM), and Cost Per Acquisition (CPA). CPC, popular for driving website traffic, is practical, but advertisers must align their choice with campaign goals and budget.
- Google and Meta prioritize relevant ads using Quality Score and AdRank metrics, valuing ad effectiveness over high bids. Proper keyword targeting, ad design, clear calls-to-action, and relevant landing pages influence costs and success.
Need help with your apartment's digital ads? Watch the video below to learn more about our multifamily-specific PPC ads strategy. Or check out our complete multifamily digital advertising guide for more insights on the same effective approach to ads we use while managing millions of dollars worth of our clients' apartment ads annually.