You’re probably paying too much for Google Ads!

Realtors: Have you ever had a call from a random sales guy that goes something like this?

Sales guy: “Hello, you already know how important it is to be at the top of google search results for “[your city] real estate”. Unlike some services that are auction based, I can get you there with for a flat fee of $XYZ [usually $50, $75, or $100].”

I’m pretty sure I already know the answer because when I asked this same question to a group of REALTORS yesterday during a presentation at a WCR event, more than half the hands in the audience of around 200 agents went up.

So here’s the deal… The only way to buy Google Ads (i.e. the ads that show up above the google search results), is through a “pay per click” (or CPC) process where Google charges for each time someone clicks on an ad. At least for ads that show up in search results there is NO way to pay Google a “flat” fee.

In every case I’ve seen of a company charging real estate professionals a flat fee for google ads, it’s ONLY because they know that the ads they are buying are MUCH cheaper than the flat fee they are charging you.   For example, if they know that “[Your City] real estate” is likely to cost them $15/month because they are likely to get 15 clicks that cost them a $1/each, then they might charge a real estate professional a  $50 “flat fee” to buy the ads for you.

In practice, this would mean that you’re paying someone a $35/month “service” fee each month and all they have to do is configure a Google AdWords campaign to run on autopilot.

Even worse (at least in this situation), Google lets the people who manage Google AdWords campaigns set a daily and monthly limit as to what they’ll pay, so the people providing you the service can KNOW they will never exceed the flat fee they are charging you.  When you pay someone a flat fee for your Google Ads, the odds are completely stacked in their favor!

Now, I probably wouldn’t have written this post, except after I mentioned this situation in my presentation I was surprised at the number of agents who came up to me afterwords just to confirm their situation wasn’t the “exception”.  I found no exception, but lots of agents overpaying for their Google Ads…

So, what’s the solution?

Buy your own ads on Google’s self-service backend called Adwords.    It’s really not that hard to set-up an ad campaign and even if you simply bought the same exact ad you’re now paying a flat fee for, you’d likely save  hundreds of dollars a year.   Not only that, when you start buying the ads yourself, you’re likely to be far more selective because Google gives you the tools (and the encouragement) to test out using different campaigns and see which ones are working best for you.

I’ve found that the main factors that determine how successful your AdWords campaign will be are:

  • The price you’re willing to pay per click
  • The keywords you target
  • The text you use on your ad
  • The landing page that you send people to

As I mentioned, if you manage your own ad campaign, google gives you all the tools you need (and many more) to experiment with adjusting all of these factors so you can find the ads that are most cost effective for you.

Trulia adds Spotlight ads and lowers…

…the overall price of their featured listings with a revamp of their ad platform.

Some details… What used to cost $50/month for 10 listings now costs $39/month for unlimited listings.   In addition, as part of Trulia Pro, agents can also add unlimited spotlight ads.  So far, so good…

However, similar to Joel, a move toward “unlimited” ads had me scratching my head a bit.  From a business point of view, the upside of the spotlight ads seem somewhat limited for both Trulia and the ad buyer… especially in that they don’t do much to reward creative or innovative ads.

One of the keys to success of Google’s AdWords program is that users are constantly tweaking their ads and adjusting (often increasing!) budgets for their ad campaigns. With the Spotlight ads, there’s very little incentive to tweak. Sure you might be able to tweak things to get a slightly higher click-through-rate, but at the end of the day, you won’t be able to increase the amount of money you spend on the service (remember I get “unlimited ads for $39/month”), so even if you figured out the “system”, most agents won’t be able to use that knowledge to substantially increase their exposure.

Nonetheless, especially while the system is new with lots of excess inventory, there’s probably a lot of low-hanging fruit to pick up for agents looking to find potential buyers…