Why Digital Marketing Fails For The Real Estate Industry
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Why Digital Marketing Fails For The Real Estate Industry

According to the Borrell Associates report ‘2013 Real Estate Outlook’, real estate advertising as a whole is projected to grow by 9.7% overall to $27.2B, while the online/digital category is projected to grow by 16.9% in 2013 to reach $15B in spend. This makes the real estate industry the number one spender in the online advertising marketplace, surpassing the automotive industry for the second year in a row. 

The industry’s shift from traditional (offline) marketing to online marketing has reached new levels of disparity. Legacy marketing mediums such as newspaper ads now only account for 14% of the overall market spend while online ads account for over 56%.  This trend is expected to continue as newer digital platforms such as social media, mobile, video, paid lead generation portals and contextual display advertising all continue to develop, rapidly.

The Borrell report goes on to explain that future growth rates in real estate advertising are directly correlated with the number of “planned purchases” by consumers, which is expected to increase for every home type into 2014. As demand exceeds supply in many markets, the National Association of Homebuilders reports single-family residential new construction starts are forecasted to increase 26% and 30% in 2013 and 2014, respectively. These significant economic indicators calling for consistent market growth, coupled with the substantial shift of cash moving from traditional into online advertising, clearly point to a continued and unprecedented digital marketing spend from the greater real estate industry.  

Real estate online ad spend

According to www.emarketer.com, overall online ad spend is projected to steadily increase year over year:

•  2013- $42.5B
•  2014- $47.8B
•  2015- $51.9B
•  2016- $55.2B

If the real estate industry simply maintains its current share of overall online spending, using www.emarketer.com data as a baseline, the relative yearly spends would equate to:

•  2013- $15B  +9.7% Year over Year (YoY) growth
•  2014- $16.7B  +19.2% YoY
•  2015- $18.1B  +8.3% YoY
•  2016- $19.3B  +6.6% YoY

Digital Marketing Failures

The REAL Trends 2013 Online Performance Study reveals some shocking statistics around how the greater real estate industry effectively throws its online advertising budgets to the wind. 

Considering that:

•  90% of consumers did online research before they bought their last home
•  45% of consumers expect an initial response from an online inquiry within 15 minutes
•  56% of consumers expect a response from their agent within 30 minutes
•  89% of consumers said response time was very important when choosing their agent
•  45% of inquiries on real estate websites never receive a response.

…billions of dollars are being wasted on digital marketing products and services. 


1. Poorly Run Digital Marketing Campaigns

When it comes to online marketing campaigns, most in the real estate industry tend to focus on generating traffic and acquiring as many leads as possible with little emphasis on relevance.  This overgeneralized strategy is myopic in nature which amounts to a big waste of time and money for brokers and agents.  The correct focus involves a well thought out strategy with proven tactics that create relevant traffic, leads and ultimately clients. It’s disturbing how little focus is given to the last conversion point. 

Some examples of shotgun marketing tactics we commonly see:

  • Matt Cutts' new blog post gave you the confidence to become a technical SEO which took your site from a blip on the search engine radar to military grade stealth invisible.
  • Feeding property updates to your thousands of ‘friends’ on Facebook, even those that live thousands of miles away.
  • Blast emailing your entire database just to stay ‘top of mind’. Tweeting incessantly because, you know, the first place people go to when they think of buying a house is Twitter.
  • Personally creating 200 *awesomely clever* AdWords campaigns using tactics you learned on YouTube.
  • Attempting to design and maintain two dozen websites that address your brand, buyers, sellers, and every community you service.
  • Indiscriminately blogging away using comic-sans and other font treatments that make eyes cross while routinely violating Fair Housing laws and the Realtor Code of Ethics along the way.

These are highly irrelevant, borderline toxic, yet all too common digital marketing practices.  

While we all know people who like to play Social Media Guru, The Accidental Spammer, AdWords Self-Certified Power User and Website Usability Pundit, and they may very well generate visitors to those two dozen websites, the traffic is likely not very relevant and probably not looking for a good practitioner of real estate. Don’t mistake motion for action. Moonlighting as an experienced digital marketer will yield lower results than refrigerator magnets branded with a picture of you on the phone with your dog in front of a For Sale sign.  Raise the bar. Stop throwing up all over the internet.

The other side of the personas above are those who do not believe internet traffic and subsequently generated leads are of much value.  Bogus information, non-responsive, not ready to sign my agency contract and/or aren’t buying/selling in the next 30 days… a waste of time, they say. Poorly run marketing campaigns definitely contribute to this perception as the likes of The Social Media Guru (very) publicly struggles to generate any actual business from their marketing efforts.  Social Media and other online marketing strategies work, very well, if implemented by professional marketers.

The stigmas that surround Internet leads evaporate once it becomes understood that they are no different than the real people who give up enough information (bogus or authentic) to become one. Bogus information is often the result of a consumer who is interested in the real estate information you’re offering and is just as interested in remaining anonymous, for now.  They’re just beginning their search and don’t want to talk to a real estate professional, yet. Too many real estate professionals engage in consistent interruption based marketing tactics (blasting out general emails and phone calls) which consumers have been conditioned to tune out as noise.

Discarding these ‘bogus’, ‘low quality’ leads is a short-sighted mistake and likely results in lost revenue.  Digital marketing has become equal parts Art and Science for those who are well trained. Cultivating these leads through multiple automated marketing tactics has turned more ‘MickeyMouse@aol.com’ leads into paying clients than we can count. 

At this point, if you are still insistent on continuing to play self-educated digital marketer rather than real estate professional, stop reading here.  Do not adopt a digital marketing platform. No need to throw good money after bad. 

2. Fragmented Platforms & Providers

The digital marketing landscape is littered with $1.99 to $1999.99 products and services that promise to ‘streamline’ one’s business.  Most of these marketing-based products and services are disparately engineered, meaning different companies sell and service different components of a greater platform, i.e. the website, the IDX, lead generation, lead cultivation, market stats, etc. Managing one platform or product, like email, is challenging.  Trying to manage three or four? Insane.

A common product strategy around the real estate vendor industry is for sales pundits to align with a group of technology providers that cobble their systems together.  This often leads to less than desirable results. Disparate systems that are integrated aren’t a bad thing, rather, there are potential issues to consider when attempting to integrate third party platforms using an ad-hoc strategy and freelance tactics without considering all of the potential ramifications.  If one of the providers goes out of business, doesn’t provide clean or updated code, changes their terms of use, deprecates features and/or functions… systemic errors will occur.

There is a prevailing thought that integrations between disparate systems need to be ‘deep’, implying that each system becomes heavily reliant on the other to function properly.  Deep integrations are typically the most expensive, fail the fastest or tend to never work right to begin with.  And the level of depth is never likely needed.  A much more practical integration approach would be for two disparate yet complementary systems to exchange ‘thin data’. 

For example, personal contact information and search history may be passed from a lead management or customer relationship management (CRM) platform to a transaction management platform to eliminate redundant data entry, human error and increase workflow efficiencies.  The transaction management platform can feed purchase price, commission and other financial thin data back to the CRM upon closing, to accurately track metrics like Return on Investment.  These are two disparate systems, well engineered and supported in their own right, and integrated to provide value with minimal risk. 

Still, platforms that aren’t thoughtfully integrated to account for the impact of potential changes from multiple parties will experience a negative ripple effect at some point in time. It’s inevitable.  How fast and economically practical are the fixes?  Depends on how much gum and duct tape Angus MacGyver used to patch all the pieces together.

Issues may also arise when trying to implement a digital marketing platform designed with no particular industry, or too many industries, in mind.  While these platforms may eventually be molded into serviceable, even robust offerings, the time and cost to do so can become prohibitive.

Salesforce is a great example. The SaaS-based product and services makes up an expensive, extensible and powerful customer relationship management platform.  Proper implementation typically requires the expertise of specialized consultants who understand the unique needs of the company and greater industry it serves.  While Salesforce is very expensive compared to their competition, if it is installed with well-defined workflows and is widely adopted, the platform can dramatically improve a business's marketing and sales automation, service levels, overall productivity, and bottom line profits.

The reality that defines much of today’s fragmented digital marketing platforms equates to poor adoption, wasted time, and perpetual sunk costs due to consistent changes to one or all of the underlying components.  Spending $10k – $30k – $50k+ on a website every few years, plus thousands more to add the requisite bells and whistles, just isn’t economically or functionally practical, yet still remains a common practice. 

integrated digital marketing systems for real estate

What to do?  Identify a digital marketing platform that: 

  • Is engineered to be integrated. 
  • Provides valuable insights and metrics from user generated activities. 
  • Offers the ability to aggregate all of your leads from multiple sources into one centralized database. 
  • Automates many aspects of the real estate lead cultivation cycle. 
  • Substantially improves communication and reduces costly human error. 

This will go a long way to ensure web inquiries are addressed in a timely and efficient manner.

3. Accountability & Support

Intelligently cultivating online leads and thoughtfully nurturing them until they’re ready to become a client is a discipline that is very difficult to learn and takes years to master if you don’t have the right systems in place.  Even well-engineered digital marketing platforms are not worth the investment if users aren’t engaging them consistently and correctly.  Such adoption won’t occur unless there is measured accountability.

Depending on people to self-train, to learn new platforms and practices via handbooks and/or recorded videos is a recipe for poor adoption, failed implementations and a lot of wasted money. Bestowing the responsibility of implementing and managing accountability on the willing but uninitiated will not work in the long run, either. 

Digital marketing platforms require robust support from the companies that provide them. Ideally, they have an entire division dedicated to client services who help drive adoption and enforce accountability which procures success in the form of a measurable return on investment. They should also provide access to key performance indicators that are clearly defined and visible, like a scoreboard. 

People play games with an elevated intensity when the score is being kept. They play with even more focus and intensity when that score can be seen and compared by others. Measuring and publishing a given user's and the overall company’s Key Performance Indicators of a platform, such as:

These measurable metrics drive accountability which is absolutely vital for success. 

Finally, concerning multi-faceted platforms that are sold as all-in-one solutions, steer clear of companies that consist of a small group of people who play more roles that an aspiring actress in Hollywood.  The number of clients a company can effectively support is directly proportionate to the size and specialized experience diversity of that company’s human assets.  Do they have a dedicated training, strategic and technical support staff?  How many developers work full time on the product/ platform?  If they provide multiple offerings, do they have dedicated team members or divisions dedicated to each offering?  This isn't a knock on small business. There are very good product and service providers out there who are small in size yet big on focus.    
Do your homework. Beware of the over promise, it’s pervasive in the real estate vendor industry.

In summary, giving well-trained users access to a well-engineered marketing platform still does not ensure success.  Digital marketing platforms that yield the strongest Returns On Investment are:

  • Strategically implemented with a business model to back up the investment.
  • Robustly supported by properly staffed companies.
  • Foster adoption through scoreboard-driven accountability metrics.


Online ad spend in the real estate industry is huge in both size and inefficiency. The causes are rooted in poorly vetted tactics, fragmented systems, and a lack of sound strategies, consistent training, support and measurable accountability. These conditions result in a lack of response to 50% of inquiries on real estate websites. It’s not a real estate professional’s job to intricately understand web development, the user experience, search engine marketing and optimization, branding, conversion tactics and the intelligent platform it takes to manage all of it.  Pick a strategic partner to deliver on these value propositions that make up an intelligent digital marketing platform to ensure no online inquiry is left behind.

Not all real estate professionals will succeed at cultivating online-generated leads, regardless of if they are provided with the best resources. Just like you can’t make everyone good at say, football. It requires a desire to play, certain skill sets, discipline, a lot of practice and painful bumps and bruises also called: experience. That’s OK.  Identify the real estate professionals who truly enjoy the digital world of online lead generation and client cultivation. Give them access to the proper resources. Keep a compelling, public scoreboard.  

By addressing the issues and inefficiencies outlined in this article through the retention of qualified, proven digital marketing professionals who strategically employ tactics that yield a profitable ROI, the real estate industry can refocus on what it has lost sight of: providing value to consumers with thorough market research, experienced representation and negotiation, and facilitation of the tasks required to meet consumers’ individual needs to purchase or sell real estate.   

Reference Links:
•  www.borrellassociates.com/home
•  www.prweb.com/releases/2012/8/prweb9803865.htm
•  www.prweb.com/releases/prweb2012/10/prweb10030652.htm
•  www.emarketer.com/About.aspx
•  www.emarketer.com/newsroom/index.php/digital-ad-spending-top-37-billion-2012-market-consolidates

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