Real Estate Ads on Social Media

There is no question that online ads are a shortcut for quick results. Social media, being an important part of our lives, has proven to be valuable for business too. Real estate as well as other businesses seem to enjoy Real Estate ads on social media. However, there are a lot of questions regarding ads and their efficiency. To shed some light on the matter we have analyzed thousands of Real Estate posts and ads on social media and have picked agents’ minds about the issue. What follows is our findings which can be valuable for all Real Estate agents thinking of promoting their business on social media.

Why Paid Facebook Real Estate Ads on Social Media Stand Out More Than Other Content

According to Statista: Facebook advertising is an important aspect of a business’s marketing strategy, as 70% of marketers use ads to target their audience (Stelzner). In fact, Facebook had 10 million active advertisers on their platform in Q3 2020.

More and more marketers are incorporating social media ads into their marketing strategy because, unlike organic posts, ads allow them to generate fast results, target higher quality leads, and increase their ROI. As demonstrated in the table below, paid Facebook ads provide our agents with the opportunity to reach more users that are outside of their current followers (their own sphere).

Read More: Why REALTORS® Should Run Facebook and Instagram Ads

roomvu Data

It is a given that organic outreach has a limit based on a poster’s audience reach and engagement size. As shown in the following table, paid Facebook ads to generate considerably more impressions when compared to the organic posts that agents share on social media.

Paid Facebook Ads’ Performance for Real Estate

Background Study

The Real Estate industry is competitive, and hence, advertisers are constantly battling for ad space. The chart below shows Real Estate ad spending between 2018 and 2020.

The ad spending, notably, has to contend with the varying habits of Facebook users. For example, the average American male user of Facebook clicks on eight ads per month, while the average female user clicks on 10. It is estimated that every Facebook ad click will cost agents between $0.50 and $4.00.

The potential engagement that Facebook Real Estate ads can deliver depends heavily on the ad setup, including ad targeting, messaging, creative, content, etc. Even the length of time a specific ad is run determines how well it performs, hence changing the number of clicks and ultimately the CPC, CPL, etc.:

Read More: What is the Facebook Ads Learning Phase? When Will Your Ads Start to Work?

Roomvu Analysis: Data Breakdown

roomvu has spent over $500K in paid Facebook advertising for agents. However, we analyzed only 1,600 sample ads to draw our findings and elaborate on things we have learned.

Background studies on paid ads for agents are limited. But those we were able to access were enough for comparison with our data. Aside from comparing these studies’ data versus our survey, we will also cover what we have found in our analytics of paid Facebook ads.

Ads Goals

Out of our 1,600 sample ads, 800 of them were designed for lead generation or finding potential customers. This means dealing with Facebook’s algorithm that focuses on gathering information from prospects. Our ads’ structure also seeks to move prospects through the buying process, a level ahead of brand awareness campaigns solely focused on reaching more people.

Ads Performance Data

Our 800 sample ads received 3 million-plus impressions and drove the average cost per click to just under $3. These campaigns generated 7,200 leads at an average cost per lead of $26. When it comes to lead generation and conversion, it is a rookie mistake to confuse website traffic with high-quality traffic coming from lead generation campaigns. Although 300 of our sample ads focused on website traffic, they received 1.5 million impressions. Their cost to drive a click was under $1 (CPC=$0.76). The final cost per lead was up to four times higher than the former approach (lead gen).

Ads Types

To provide a better perspective on these ads, they are presented below as placed through our Smart Ads Center. This selection is our most common ad placements; the better-performing ads of Forecast short videos and pre-construction (coming-soon projects) are not covered below. We will present those separately.

Sellers ads covered in this report, are as below:

Home Worth: An ad asking the audience to provide their home address to get a free home valuation.

Home Worth Neighbour: An ad asking the audience to provide their home address. This way they can get a list of prices of residences sold around their neighborhood.

Buyer- targeted ads covered in this report are shown below:

Home List < $1M: An ad asking the audience to provide contact details to get a free list of homes under a certain price (we used $1 million in this study).

Home Buyers Can Afford: An ad asking the audience to provide details on their income and savings to get a mortgage qualification.

Forecast Ads: Ads asking the audience to provide contact details to watch a full video about the market forecast in the near future.

Pre-Construction Ads: Ads asking the audience to provide contact details to get on a VIP list of a coming-soon/pre-construction residential project.

Read More: How Long Should You Let Your Facebook Ads for Real Estate Run

Real Estate Ads on Social Media: Analysis

We consider as vital eye-openers the ad campaigns soliciting information from their audience in exchange for home listings under a certain price range, e.g., a list of homes under $1M. These lead generation campaigns’ cost per lead on average was 50% less than the rest of buyer-targeted campaigns.

In other words, for every dollar spent on a sample “What’s your home worth” seller campaign, agents can get up to two times better results with a “List of homes” or a “pre-sale” campaign.

Home Valuation: Ad Fatigue

We can trace the inferior performance of the “Home Worth” ads partly to a long time that it has been used in the industry. From 2016, we have seen RE/MAX running this type of ad for their agents. We believe that the seller community has reached an “ad fatigue” state with this type of creative approach. Ad fatigue is the phenomenon when your audience becomes overly familiar with your ads. They then get bored of them and stop paying attention.

Buyer Ads vs Seller Ads

It is also noteworthy that buyer ads on average convert 92% better compared with seller ads. This means that there are higher chances of generating leads with buyer ads compared to seller ads. The importance of buyer ads is often overlooked. Most agents think seller leads have way more value, especially in a seller’s market like in most of 2021. However, one reality often overlooked is that some sellers want to first see what they can afford for their next home purchase before they list their home for sale.

Market Forecast Ads

Another interesting development we had during our 2021 effort to produce quality leads for agents was how a new breed of online ads was discovered. Observing what agents did on their own, our creative ad team became inspired to think of how or why some agents ran advertising on some of the video content produced by roomvu.

These contents usually were made of new future market forecasts, essentially educating the audience as to what will happen in the market in the near future. However, one key aspect of these ads was, to withhold some information and only release it once some information was provided by their audience. We call these ads “Market Forecast Ads”

Building Projects Ads

Another type of ad we saw many agents run in many urban areas where supply is limited and inventory of new homes is low, were ads about building projects that will complete in the near future. We call these ads “pre-sale ads”. The pre-sales usually target buyers who are not fully ready to commit to a purchase. These buyers are willing to put in part of the purchase price and lock today’s prices before paying or financing projects closer to the finish line. An important aspect of pre-sale ads was the ability of agents to get closer to the developers to lock in VIP incentives and show them as market experts and leaders in their field. The pre-sale ads mainly were popular in urban centers that promote vertical living for instance Toronto and Florida. 

The Best Performing Ads

Surprisingly, the lowest cost to produce leads was using recent market happenings and forecast ads. The cost to produce these ads was as low as a quarter of “home worth” ads. Pre-sales ads, however, were still the most promising form of lead generation in urban areas.

Real Estate Ads on Social Media: The Budget

When running ads on social media, the first variable to consider is the budget agents want to use on ads. Being cautious, many start their campaigns with a limited budget. But will spending larger amounts of money result in better conversion? Here is what we found out.

roomvu Data

Data from roomvu analytics demonstrate that as agents spend more money on ads, the better is the engagement that they get. However, this observation should not be mixed with impressions. We are strictly looking at cost per click which is the optimal result of interest on the post. It also indicates the right audience found within the network of that advertisement. This may sound like common sense. But what is interesting to note is that as more money is spent on ads, the lesser is the CPC. We mean the cost agents incur per engagement/click. (The blue line in the chart.)

One could conclude that ads will work only if agents run them for long enough. This way lead costs will decrease. Running Ads for a short period of time will also confuse social media algorithms. Facebook Learning Phase, see Appendix) will increase the overall expense. No need to mention that there are other factors affecting the outcome of Ads like ad setup (targeting, etc). 

Real Estate Survey

Having covered the cost of lead generation, it is important to note that this cost is only one factor when we look at the whole life cycle of online lead generation and activation for Real Estate agents. To gain a better perspective on what happens after a lead has been generated, we conducted a series of interviews and surveys among the agents that used our Smart Ads features. The goal here was to gain a better perspective on what happens after a lead has been generated.

Ad Follow-up

Only 15% of our subscriber agents said they followed up a lead within the first hour that it was generated. For their reference, roomvu smart ads send to the agents a text and an email as soon as a lead was generated.

Ad Conversion

We also asked the agents how many of their leads became active clients and actually turned buyers or sellers with an appointment to see them in person. This is considered the key milestone in lead activation. The agents revealed that 19% of the leads they received responded to them. They had further questions and requests for in-person meetings.

The last step of lead activation is conversion to an actual sale. This way the lead goes from an online form to an in-person appointment and finally a closed deal. It’s worth mentioning that this survey was self-declared by Real Estate agents. We believe there could be a small bias about the results when asking Real Estate agents about their performance. Aside from the result that agents declared they closed roughly 4% of the leads given to them. Top teams (agents who had an insider sales team, or someone to follow up with leads) reported almost double the closing rate for the leads (7% vs. 4%) they received. This is consistent with findings of other industry players. And notes the importance of timely follow-ups and conversation initiation in a timely manner by the agents. 

Ads and Follow-up Content

The last question we asked was whether there was a point in sending follow-up content regarding the market to the leads that the agents have received. To test this, we took a sample of 20 agents and we started sending SMS messages and emails about recent market happenings on behalf of the agents. On this page is an example follow-up text.

Surprisingly, we saw a significant increase in the number of leads converted to an active conversation or an in-person meeting with the agents. Notably, these follow-ups were sent within a two-day schedule and paired with timely content about the market to avoid making the lead feel like they have been spammed.

As mentioned earlier, there was a further 12% increase in the lead activation cycles when automated follow-up was in place (a 50% increase compared to manual agent follow-ups).

Real Estate Ads on Social Media: Final Words

Real Estate ads on social media work and we all know it. However, to make the most out of the Real Estate agents need to consider multiple factors. These factors include ad setup, ad fatigue, and ad budget. Otherwise, the whole campaign will yield little to no significant results. Maybe that is why many agents tend to blame social media platforms and their ads for not being effective. Given all of the complexities of running Real Estate ads on social media, agents can have the best possible ads for their business for a small fee. That might sound like an extra expense but we believe it is better than wasting the whole budget.

Read More: How to Run Real Estate Ads on Social Media