Many agents are going to get a lot of traction with their online marketing efforts in 2019. The good news is much of that marketing can be done for free, but is spending for online ads a wise idea?
The majority of real estate agents spent less than $5,000 on their marketing efforts in 2017, and altogether nearly two-thirds spent less than $10,000, according to data from Real Trends. It's worth noting that the vast majority of those investments are going toward online advertising of some kind. This makes sense, as many would-be buyers and sellers start their search for agents via the web. The share of shoppers who start their search there, in fact, is only likely to keep growing.
However, Real Trends found that only 38 percent of agents actively marketed on social media in 2017 - the most recent year for which data was available - and more actually advertised in local newspapers than search engine ads (26 percent to 23 percent, respectively). No surprise, then, that more than a quarter of agents plan to spend more on their web advertising going forward.
Where to look
Social media seems to be the big frontier for real estate professionals' investment opportunities, as that may leave a lot of wiggle room for how much they actually have to spend, depending upon how many people they want to reach in a number of specific categories.
"Our real estate clients are investing in three core areas: SEO, pay per click, and paid social media," Morgan Carey, CEO of Real Estate Webmasters, told the site. "SEO and PPC are tried and true, and they've long been the backbone of almost every successful strategy we've seen. But agents across all income levels have also figured out that platforms like Facebook provide huge opportunity to generate new leads as well, so the industry is naturally gravitating towards social advertising in 2018."
Setting the standard
When trying to determine how much to spend, then, real estate pros need to consider a lot of variables, according to Zipper Agent. The long-standing rule of thumb in the industry has been to spend about 10 percent of the total commission they earn on marketing. Of that, a large and growing percentage will likely be devoted to online marketing.
However, some agents who work in particularly busy markets with a lot of competition might want to invest more like 15 percent or even 20 percent into these efforts, and spread some money around (for example, 30 percent in the spring but only 10 percent in the winter) to make sure they're capitalizing on the market at all the right times.
Of course, every individual agent will eventually be able to figure out what's the best possible strategy for determining how much they should spend on marketing in any given month or quarter. A little trial and error will go a long way toward determining what's helping connect with their preferred client base on an ongoing basis.
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