Every multifamily company desires for their resident acquisition costs—or cost-per-lease—to be as low as possible.
This is why digital advertising has emerged as a popular and effective marketing tool for apartment communities. Unlike Internet Listing Services and their expensive package fees, there's no fixed price to highlight their units and amenities to a targeted group of prospective residents on Google or Facebook, meaning communities have more control on how much they want to spend depending on their occupancy situation.
The problem is that apartment communities shouldn't buy digital ads just to have digital ads. Digital ads are not a guarantee of lower acquisition costs unless they feature attractive, helpful content and reach the right audience.
Because we manage millions of dollars worth of our clients' digital ads each year, it was really important to us to make sure their ads generated more qualified leads and signed leases for the lowest possible price. This meant we had to find the best way to measure their effectiveness.
Introducing Cost Per Minute
There are many different metrics marketers traditionally use to see how their ads are performing—cost-per-click, bounce rate, conversions, etc. Each of these metrics are valuable, but they fail to tell the whole story—especially for the multifamily industry.
This is the backdrop behind how RentVision developed a new digital ad metric specifically for apartment marketers called Cost Per Minute. This one, unobjectionable number will give an accurate assessment on the performance of your apartment community's digital ads.
How Cost Per Minute Works
Cost Per Minute is calculated by dividing the average cost-per-click by the average time on site of an ad campaign.
Cost-Per-Click / Avg. Time on Site = Cost Per Minute
If every click from an ad campaign costs $1.00, and those visitors are spending an average of two minutes and 30 second on your apartment community's website, then your Cost Per Minute is $0.40.
$1.00 / 2.5 minutes = $0.40/minute
The lower your Cost Per Minute, the more effective your ad campaign is. It means your ads are targeted correctly, and their content is making those individuals click and visit your website. This gets to the heart of why we designed this metric specifically for apartment marketers. We know that the longer a prospective resident engages with your website and looks at floorplan pages or watches a walkthrough video tour, the more likely it is they'll convert to a lead and sign a lease.
Cost Per Minute is also helpful in that it can be corroborated with the other traditional digital ad metrics. If your cost-per-click is low, your Cost Per Minute will also be low and vice versa. Or if your bounce rate is high, that means that most users who visit your site are leaving after viewing one page, which would obviously result in a higher Cost Per Minute. And if your Cost Per Minute is low, that means more visitors are staying on your website longer which would lead to an increase in conversions.
Why Apartment Marketers Need To Use Cost Per Minute
1. Cost Per Minute is easy to decipher.
As we have begun rolling out Cost Per Minute with our clients, our advising conversations have been faster and more beneficial. This is due to the metric's objectivity. It gives a clear indication of which ad campaigns are working and which ones aren't, allowing our clients to reallocate their ad budget accordingly. It also eliminates having to comb through all of the other metrics in Google Analytics or Facebook to measure performance.
2. Cost Per Minute opens up the opportunity to apply Machine Learning.
Machine Learning is a process we provide our clients that automates the bidding process of their various ad campaigns, ensuring those ads are getting displayed to more of the right people at a lower Cost Per Minute. The Machine Learning algorithm looks at a wide range of auction signals (keywords searched, location of searcher, time of day, etc.) to figure out the optimal amount of money to bid on every individual pay-per-click auction. By utilizing this, we're maximizing our client's ad budgets and producing more effective ad campaigns.
Cost Per Minute is the only metric apartment marketers need to evaluate the effectiveness of their digital ad campaigns. It looks at the average cost-per-click of a campaign, as well as the time a prospective resident spends on the website.
A high Cost Per Minute indicates that your ads aren't reaching the right audience because those individuals don't find your website helpful or relevant. A lower Cost Per Minute means your ads are targeting the right people because they're clicking on the ad and engaging longer on your website, increasing the likelihood that they'll convert to a lead and sign a lease.
Our latest Ebook The RentVision Guide to Digital Advertising for Apartment Communities has everything you need to know about how to deploy effective and affordable ad campaigns that are optimized to achieve a lower Cost Per Minute. Download your free copy by filling out the form below.