This week's blog is written by RentVision's Founder & CEO, David Watson.
Digital ads are one of the most powerful tools an apartment marketer has. They allow you to increase demand when you need it, and save marketing dollars when occupancy is strong. You can also determine exactly who gets targeted. Better, you can do it by targeting prospective residents based on their online search behavior rather than just their demographics (which may get you in trouble with Fair Housing Laws). Unfortunately, digital ads require knowledge and time to become an expert. Hopefully, this blog series can provide some helpful information to fill that gap for you.
This blog will give a brief overview of our targeted digital ad strategy. Specifically, we will look at four cost-effective campaigns that will help you reach the right audience. Each blog will get more advanced and challenging to implement. The second blog will give you insight into how to measure your digital ad effectiveness, simplifying all the complex metrics into one single important metric. The third blog will show you how machine learning can further optimize and automate your performance. The final article will talk about how you can make your digital advertising predictive by increasing demand when you need it and saving money when future demand will be more than adequate. Let's dive in!
Understanding Google's Business Model
When we first begin working with clients, we often get a common question: “Will I show up first on a Google search for ‘apartments for rent in Fort Worth, Texas’?” This of course is asked by a client with a property located in Fort Worth, Texas. The answer may surprise you. Yes, you can show up first, but we don’t think you want to. Why would you not want to show up first? Showing up first on broad keyword searches can be very, very expensive and the return on your investment is almost always negative.
To understand why this is the case, we need to first understand Google’s business model. Google has one single goal: maximize their income. In order to do this, they realize it is imperative they deliver a good experience to their searchers so they come back again and again. What makes a good experience? A good experience is primarily driven by getting helpful search results. If you typed into Google, “Apartments for rent in Fort Worth, TX,” you would not want an individual community website. A searcher who types this in would hope to get websites with a large number of apartment communities. Google knows showing a community website would be a bad experience. In fact, Google goes so far as to give a relevancy score to each ad to measure this. When your relevancy score is low, Google penalizes you and requires your cost-per-click bid to be substantially higher to show up at the top of the results.
One reason Google does this is because fewer people are going to click an ad that is less relevant to what they are looking for. Many times, people believe that whoever bids the highest cost-per-click always shows up first in the search results. But that wouldn’t maximize Google’s income. Here is Google’s income equation:
Cost-Per-Click (CPC) x Click Through Rate (CTR) = Revenue
It does help to place a higher cost-per-click, but if your click through rate is low because your ad is less relevant to the searcher, then your click through rate will also be lower. Imagine we had two bids—one for $10.00 per click and the other for $2.00 per click. You would think the $10.00 bid would have an ad that would show up first in the search results. However, if the click through rate is significantly lower, it may bring in less revenue for Google. Here is an example:
100 searches x $10.00 CPC x 1% CTR = $10.00 in Google Revenue
100 searches x $2.00 CPC x 10% CTR = $20.00 in Google Revenue
You can see how a lower cost-per-click bid with a substantially higher click through rate garners more revenue for Google. The best part about this is that keywords that are more relevant for your community almost always target individuals more likely to rent your apartment. In other words, the people most likely to rent your apartment are the least expensive to reach with Google digital ads! With this in mind, we set up a targeted digital ad strategy.
Here is an illustration of a target. Imagine your community is at the center of the target. The closer a campaign is to the center, four things are likely to occur:
Google will give that campaign a higher relevancy score.
Your click through rate will be higher.
Your cost-per-click will be lower.
The searcher is more likely to be interested in your community.
All four of these things are beneficial and why we help our clients maximize impact at the center of the target prior to moving further away from the bullseye. Here is how that looks:
Digital Ad Campaigns
First, it is imperative that one focuses on people searching directly for your apartment community. We call these ads “defensive” campaigns. Now, if the name of your apartment community is, “Regency Park Apartments,” why would you want to pay to get clicks from people searching for that name? The answer is simple: Some people searching for you will click on an internet listing service ad or a competitor’s ad.
Many ILS’s that you may pay to be listed on will run digital ads targeting people searching for you. This sounds nice, except those same people will end up on a website where they can see you and many of your nearest competitors. Do you want your prospective residents to also check out your competition? We didn’t think so.
Second, competitors may be attempting to get their apartment to show up when people search for you. In fact, we have helped many clients deploy this strategy and we know in some cases it can work quite well. When a competitor does this, they are essentially standing in front of your clubhouse and handing out a flyer about their apartment community to any prospective resident that is about to walk in and tour your community.
Buying ads targeting your community keywords is protecting your community name from competitors and listing services, which is why we call them “defensive” campaigns. Fortunately, Google knows these keywords are extremely relevant to your community and the click through rate will be really high. As a result, the cost-per-click will be extremely low, making these the most cost-effective campaigns to run.
Once your name is protected, you can move onto the next ring on the target.
Have you ever looked at a product on Amazon and then as you browse the internet you see the exact product you were just looking at? What you witnessed is an example of a remarketing ad. Remarketing ads are the 21st century way of following up. After an individual comes to look at one of your properties, you would desire your leasing agent to follow up with a phone call over the coming few days. In the same way, remarketing ads are able to follow up with people who have visited your website.
Remarketing ads identify a computer, phone, or other device and track what that device has viewed. From there, ads can target that device as it navigates the internet. These ads are highly relevant because that individual has looked at your community already.
The reason remarketing ads are second on our target is because defensive campaigns focus on the people we know who are trying to find you, and remarketing ads focus exclusively on people who have shown interest in you. They are generally more expensive than defensive campaigns, but everyone they are shown to expressed some level of interest in your apartment community.
After you have built and implemented defensive and remarketing campaigns, it is time to move onto the third and fourth rings on the Target.
We break offensive ads into two types:
Specific Relevant Keywords
General keywords, the outer ring, are search terms like “apartments for rent in Fort Worth, TX”. Specific, relevant keywords are more targeted. Even a small adjustment like, “apartments for rent in southwest Fort Worth, TX” is more targeted. But you can take it further with much more specific and relevant keywords like this: “Apartments for rent near TCU.” If people are searching for apartments near Texas Christian University, and your apartment is located just a few blocks away from campus, this is going to be highly relevant.
“Apartments for rent near TCU that accept dogs.” Maybe you accept dogs, but many of your competitors don’t. This becomes more relevant.
Other keywords used to make things more relevant may be luxury, 1 bedroom, 2 bedroom, studio, brand new, pool, near xyz location, your competitors’ names, etc. The list is endless. When your keywords become more relevant to your searcher, you are going to have a higher clickthrough rate, lower cost-per-click, and better prospects. The end result is a higher ROI.
You can also begin to target various geographic regions. You can couple certain keywords with certain locations. You may want to target only people searching for an apartment from Fort Worth. You can get even more specific with locations, but you need to be careful in doing this because it may be a violation of Fair Housing Laws.
Because there are thousands upon thousands of possible offensive campaigns to run for your community, deploying cost-effective digital ads can be difficult. Keeping your marketing budget intact isn’t the only marker of success; the ads still need to make renting your apartments easy. To know if your ads are working, you’ll need a way of measuring success. Our next blog will discuss our simple solution to helping you evaluate your digital ad’s effectiveness.