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The Successful Marketing Campaign |
Internet Marketing
Overview
If we put aside the technology involved, marketing on the Internet is very much like any other marketing. We are seeking to satisfy the consumers' needs. In the case of real estate marketing we are targeting the homebuyer. We incidentally address home sellers with the marketing at the same time but, buyers represent more 95% of the activity. As with any advertising, the basic process is one of determining the home buyers' needs and then creating websites that satisfy these needs while also meeting the requirements of the Realtor or real estate company. Unfortunately, the vast majority of on-line real estate marketing has been created utilizing the traditional real estate marketing philosophy. This philosophy is based upon the behavior of the homebuyer of years past before the introduction of the Internet. Before The Internet Prior to the development of the Internet a homebuyer would gather information from classified ads and real estate magazines. He would also drive neighborhoods looking for sale signs. He might in this way find homes that interested him. He ultimately would visit real estate offices and speak with a Realtor. The Realtor would discuss his needs and utilize the MLS book to select homes that might meet the buyers' criteria. If he (the buyer) was ready to buy the Realtor would then take him to look at these homes. This process would progress through to the closing of a sale. Under the then existing conditions the real estate company or Realtor was the primary source of information about homes for sale. The MLS listing book was a closely held "book of knowledge" that the public did not have access to. The marketing targeted for this buyer was an advertisement competing for the opportunity to show the buyer homes. These ads were saying "come to us for information on home listings". The buyer accepted the fact that he had to contact a Realtor to get complete information on homes for sale. While the details vary from state to state, a Realtor provides a buyer and the seller with information and services that are required in order to initiate and complete the sale of real estate. So, very few transactions occur without the involvement of a Realtor. The Impact of The Internet Ten to fifteen years ago the introduction of the Internet initiated what has become progressive changes in the real estate industry. To this day, in 2007, the real estate industry is still undergoing changes. As the industry is guided by its' senior and established executives, there is a considerable lag in the adoption of new technologies and new concepts. Most of the leaders of the real estate industry are not fully experienced in, or knowledgeable on, the Internet. Unfortunately, the real estate industry has not adapted to the technology of the Internet and continues to apply an out of date traditional marketing philosophy to the Net. In recent years there has been ongoing controversy regarding the multiple listing services and how the information on listings may be distributed. Each MLS has a unique set of guidelines and very few have their databases generally available. Some are exclusively controlled by brokers while others are open to both brokers and sales associates equally. The controversy regarding this issue is costing the industry as elements outside of the industry are taking advantage and inserting themselves into the industry revenue stream. Internet Real Estate Marketing Today Today, in 2007 the vast majority of real estate websites are still employing traditional real estate marketing methodologies. A successful, but traditional, real estate website achieves a 1% to 2% conversion rate between visitor traffic and leads. That is, one or two people out of every 100 that visit the site contact the Realtor. These sites are producing 20 to 40 leads per month. A very small percentage of these leads turn into sales. Realtors are spending a small fortune to generate visitor traffic to their website only to realize a minimal return. These websites often have 50 to more than 100 pages, have been optimized for the search engines and the Realtors have paid to have a high link popularity developed. The sites earn high positions on the search results and attract more than 1,000 visitors every month. Some Realtors have developed multiple websites in order to attract enough visitors to produce a significant number of leads. In many cases the Realtors have invested $5,000 to more than $10,000 developing this marketing. It has taken a year or more to develop the visitor traffic. By comparison, the latest marketing concept utilizes a two page lead generator website that produces a 10% to 15% conversion rate resulting in 100 to 200 leads each month. These sites produce leads on the first day that they are launched and then every day afterwards. They use an automated program to maintain contact with the buyers and thereby incubate these leads until the buyers are ready to purchase a home. The conversion rate to transactions is ten times the rate of the traditional sites. But, these sites break all the rules of traditional real estate marketing. It may take years for the real estate industry as a whole to adapt to this marketing philosophy. As the industry gradually adapts to this new approach it will bring about a change in the homebuyers perception of Realtors. In the meantime, there will be companies who will exploit this failure on the part of the real estate industry. The industry will continue to see a significant percentage of revenue go to people outside of the real estate industry who are capturing real estate leads and selling them to Realtors. The Internet is ultimately going to be the primary medium via which real estate transactions will be originated, processed and closed.
GAW
Associates, Inc |
