In our recent webinar with LabCoat Agents, Dan Lott and Harry Kierbow discussed the current state of real estate advertising, focusing on Google and Facebook strategies and the impact of the NAR settlement on lead generation. Together with host Trenton Bodin, they delved into key market trends, how they've changed from the back half of 2023, and offered expert advice on structuring your ad spend for optimal results.
Discover why Google leads are stabilizing post-pandemic and why Facebook leads offer a lower cost per lead. Learn how CINC's innovative approach has led to a 5% decrease in cost per lead, bucking industry trends. Gain valuable insights into the evolving role of AI in real estate advertising and the importance of remarketing to engage leads over the long term.
Watch the full video or read the transcript below to stay ahead of the curve in real estate advertising and to gain actionable strategies for maximizing your advertising ROI and converting leads into clients.
Trenton Bodin: welcome everybody. Good morning. Good afternoon to LabCoat agents, to those that are on the call here as well. We have an exciting conversation that's going to be happening today with CINC. We're going to focus on Google and Facebook advertising and what the current market looks like and how the NAR settlement is going to affect that lead generation.
And we have two of our great guests here, Dan Lott and Harry Kierbow from CINC, and they are going to walk us through what this state of the market looks like and how things are going to be progressing as far as Google and Facebook advertising goes. So I'm going to kick it off and turn it over to you guys, Dan and Harry. You guys have a deck you guys want to walk through and looking forward to hearing what you guys have to share with us today.
Dan Lott: Fantastic. Thanks Trenton. Yeah, I'm Dan Lott and I'm joined by Harry Kierbow here. And so let's get this going, Harry. Press that button.
All right. So this is what we're going to talk about is the current state of real estate ads. How NAR is going to impact this. And how you should structure your ad spend moving forward, just in light of the NAR decision and just In general, with our best practices that we've been around for 12 years. We have some best practices. We're going to share those with you.
All right 1st quarter real estate lead generation in Google. It was a good quarter. All right, so some of the things, I've done presentations on this, how the one of the things that impacts the cost per lead is just generally the amount of people who type in the phrase homes for sale in Google, and usually when it goes up, it's when the number of searches goes up, the cost really goes down.
However, right now the number of searches for homes for sale, it's trending down and the other factor we look at too, is the actual number of home sales that have happened, they're trending up for the first quarter. And then we are happy to report that CINC's buyer cost per lead improved for the last two quarters.
And, Specifically last quarter, then this is the 1st improvement since the pandemic and specifically last quarter are the cost per lead went down 5%, which is a pretty big improvement. Yes, we're really happy. And 1 thing is that Harry put this in, which I like, is the the real estate industry average cost per lead worsened by 40 percent in 2023.
When the cost per lead worsens, that means it goes up. And so our cost per lead is lower, but industry wide it's 40 percent higher. So we're doing something to outpace the market. And so we saw the report, it was very exciting.
All right, here we go. Just Google leads in general. They're on pace with how it was before the pandemic were roughly equivalent. And so Trenton, you know this. During the pandemic, the cost really plummeted because everybody was stuck in their house and all they Did was register for a real estate lead generation sites.
But after that happened, the cost really started to inch up, and now we are right about where we were prior to the, pandemic. And this is what our cost per lead is last quarter it was $6.04 was our cost per lead for Google, which is a good good cost per lead.
All right.
Harry Kierbow: I think another thing that's important to talk about when you talk about the pandemic pricing is the drop in competition as well from advertisers. I think like the NAR settlement, there's some similarities there where maybe it's not advertisers dropping out, but maybe it's the difference in what they're spending on that leads to a drop in cost per lead and more leads in general.
Dan Lott: All right. And all right. So after the pandemic, pandemic was cost per lead was very low. It gradually increased. Now it is going down again. This is exciting. Last quarter, or fourth quarter of 2023, we beat the preceding year, which is very exciting when going to that 40 percent how the market as a whole was up 40%. We were down. And then last quarter, we were down by 5 percent year over year, which is which when you're dealing with the amount we spent a lot of money and that we generate a lot of leads. So just any sort of increase or decrease is very significant.
And then y'all know about NAR. And I think the impact may be on lead generation specifically. It may be, over presented a little bit. But what we think is going to happen is the demand for seller leads is going to increase, which will cause the lead price lead costs to increase because you're going to have more competitors out there trying to get seller leads.
But we don't anticipate there's gonna be more money. It's going to be a shift from people trying to get buyer leads to seller leads. One of the things that we have found at CINC, which is very logical, is that buyer leads are also seller leads because everybody's trying to buy a house, or most people who are trying to buy a house are also trying to sell a house. And so you can also focus on buyer leads.
Trenton Bodin: We've noticed that as well. A lot of our agents are asking to transition over to seller leads, and we try to remind them that about 30 to 40 to 50 percent of those, if you position yourself to go for buyer leads, those are also sellers. Most of them have homes already too.
And so that could help offset some of those costs if you're so concerned about trying to just get sellers. And that way you could also get both really, or at least both sides of the transaction there. For those on the call, don't just think that you have to go for seller leads just because of the market that we're in. Because in the nature of it, a lot of those are the buyers are actually sellers as well.
Harry Kierbow: That's really interesting that you said around 50%. Because. That's what we saw from our registration in 2023. So yeah, that point is very valid.
Dan Lott: Yes. So most people who have a who are buying a house, are also selling a house they indicated they own a house at, sign up. And then an important thing is seller leads are more expensive than buyer leads. They are 2 to 3 times more expensive than buyer leads. So if you put those together, the fact that seller leads are more expensive, like 2 to 3 times, If you're looking at around $6 for a buyer lead, you're looking at maybe $15 for a seller lead.
The fact that half of your buyer leads are also seller leads makes those a better investment. You're getting, a buyer, 100 percent buyer leads, but then you're also getting 50 percent seller leads. And if there is a shift to more people just going, okay, I'm going to buy, get more seller leads. That's going to cause that $15 to increase beyond that. And so these, the two to three might become three to four. Exactly. Oh, sorry. Go ahead.
Trenton Bodin: I was going to say, I'm curious for those in the audience right now. Are you guys generating buyer leads or seller leads? What is your guys's focus? In the chats, just drop it in the chat and just let us know buyers or sellers is what you're going for right now.
Harry Kierbow: Yeah. And I was going to say too the that 54 percent from last year was at signup, right? So that's when they're coming through the signup form. Also within the CRM, within whatever nurture program you're using, there are ways to try and get those people to convert to seller leads down the road as well. And that number will only go up as those people are being nurtured by your, whatever you're using to nurture your leads.
Trenton Bodin: Looks like a good mixture of buyers, sellers, and both. Looks like some are transitioning to focusing more on buyer leads in the second quarter. So it's a nice little shift here that I'm seeing.
Dan Lott: Yeah, that was interesting. That was interesting to see those those chats. Yeah, so a diversified buyer campaign. It keeps the cost low. Diversified. And just, we've been focusing on Google, but it's also social. If Harry would have put his chart on there showing the cost per lead for Facebook, it is approximately 40 percent lower than the, buyer cost per lead. So it's the social has a lower cost per lead Facebook, Instagram. And then with the advertiser shifting spend to seller lead generation, that should improve the cost per lead for buyer. And especially the, gap. The cost per lead for buyer relative to seller especially will improve.
Harry Kierbow: What if you continue to receive 54 percent of your buyer leads that are sellers and the cost per lead goes down you're actually getting even more leads by focusing on buyers and finding the sellers within them.
Trenton Bodin: Yeah, definitely a better ROI upfront.
Harry Kierbow: We've using this data and I think this is one of the most important things when we talk about CINC is we have all this data from end to end when we look at we were able to see the lead from generation to conversion and what that path looks like.
And so we've always felt that lead generation was a numbers game. And social has always had a lower cost per lead compared to search. But there's always been a lot of pushback or not a lot, but more pushback about advertising on social versus search. And a lot of that comes from the way that people find those ads, I think.
Search, it's a very active kind of participant, social you're on Facebook, Instagram, watching a reel, whatever it might be, and you find something that piques your interest. When we make these recommendations, we don't make them lightly. We just recently have completed, and it's still going, but we've put our 1st draft out of a 5 year cohort analysis of leads by source. And 1 of the things that we saw, which really led us to promote social to clients as a viable lead option is that we saw that leads from social might take longer to convert, but within 1 to 2 years of registration, those 2 actually convert at about the same rate.
So just pull in some stats from this analysis, looking at 2023, we saw that leads from social were 33 percent more likely to convert to appointment set social leads were moved to the appointment met, which is a pipeline stage within our CRM at the same rate of search in 2023. And then over the past 3 years, 2021 2022 2023, these leads have actually converted to sold at the same rate. And there's a lot of enhancements that we've made on the social side I think that is driven this, but I think to a lot of it is just this access to information to see that while social leads do convert, they convert at a different time frame and in a different way.
If you guys want to watch the recording of that we have that on the CINCPro blog, CINCPro.com/blog. Alvaro goes into all the details there. Okay, so we've established that social leads convert. So why do we still get pushback, right? Why do people still say they suck? So I thought this was really, interesting.
We followed the results of a 60 day follow up cadence with a third party over a six month period, just looking at CINC generated leads. And so what we saw that leads from social when they were being followed up correctly and, routinely, we're actually 104 percent more likely to convert to an appointment than a lead from search.
So this was mind boggling to me, right? I always want to say mind bottling. I watch Anchorman too much. Is that Anchorman? I think it's Anchorman. Anyway, but this was mind boggling to me, right? So why do we still get push back? Why were people still more interested in the search side?
This was very interesting is that the leads that were coming from social were also about two times more likely to be classified as a lead or an agent reject, which that just means that for whatever reason, the lead said I don't want to work with you anymore or the agent this price point is too low, it's unrealistic. Whatever it may be.
I thought that was really interesting. Yes, you, you will, and we still see this in the numbers today. You will get increased appointments or higher percentage of appointments from your leads from social, but you're also going to get more leads that are going to tell you to screw off. I don't know who you are. Why are you calling me? I've never been to your website. And I think that I understand that, negative is. Hit right of I've been calling these leads you're less likely to remember the 3 or 4 appointments you set and more likely to remember the 10 to 20 people who said, I've never heard of you. Don't call me ever again.
I thought that was really interesting and then also we talked about social leads do just take. More nurture, but. The data that we have shows that conversion catches up towards the end of year one, and then in years one to two, they're basically the same. With a lower cost per lead on the social side, you could see a higher return over time by including those leads. And that's, really the main reason it's diversification is just a wise strategy in general. Years ago, Facebook was getting sued every three days. You never know what could change on those networks. So having those multiple pillars is smart and it's just the best way to efficiently spend your money and promote things like your listings Google advertisements. Cast the widest net possible.
Trenton Bodin: That's really interesting. Because you have a lower cost per lead, maybe less likely to have that many more that move forward, but also the fact that you're paying less for it and you're getting more. So in theory, it should work out a little bit better. And plus, if you're thinking about one to two years especially during that 2021, 2022 time of people when you know they were visiting a website, taking a look just to understand the market. Now you had 2023 to where the mortgage rates were pretty high. Now that they're coming down, you really have to think that all these leads that are in your database right now have a really high chance of converting here in the next year. So even though they were an old I just had a call yesterday about teaching about how to re engage dead leads and I think that's why it's so important to make sure that we're focusing on who's coming to our website and how to get them to come back as well.
And so again, back to the audience here. I'm curious for those in attendance. Are you guys focused on Google pay per click or Facebook leads? And I'm curious as what that structure might be there. Okay. And I'm hoping that people are going to be transitioning more towards the Facebook leads, but love to hear it in the chat, what you guys are doing.
So we got some Facebook leads, Google local service ads, both. Want to focus more on pay per click. So I just think that's interesting with the stats that you're showing Really shows that maybe we don't want to spend that 15 20 25 dollars for that google pay per click when we can spend You know, $6, $7, $8, $9, $10 dollars on the facebook leads and get double the amount of leads and have almost the same percentage wise and moving them towards the appointment set. And then in fact, with your stats there, it looked like it was more towards the social Facebook, Instagram leads.
Dan Lott: Yeah, that was good to see. And somebody put the local service ads on there. I don't know, Trenton if you've used those before, but we also offer those and those are really tricky in that. They perform really well if you're able to get traffic. And so we have somebody who's dedicated to getting people there's a lot of hoops you have to go to and. But the thing that you're able to dispute the the leads, which allows you, if you go through and you'll dispute it and get, your money back.
But it's getting traffic. It's, that's a very frustrating ad site because it works really well, but it's like people call uplike I want more leads. I want to, spend more money. And then we. We physically cannot spend this money on your behalf and you have to get more reviews. It's like you constantly have to get Google reviews which is just in general, it's a good idea, but but yeah, I, so I like the, local services and just on diversification, it's good to see, like people are saying, again, I'm doing both. And it's cause you never, there's seasonality with everything and Google takes a longer time to ramp up. It's usually like around a month before you're full throttle on your Google. Facebook is a hundred percent right out of the gates. And so it's good to if, somebody's struggling for the first couple of weeks, they're getting all these Facebook leads. And then once Google's grown great, then you have a good mix. So that's why we, suggest that.
Harry Kierbow: Yeah. And that's the goal, right? Like for us we always say we don't have customers, we have clients. So our goal is that we're setting you up for success. Not just 3 months from now, but 24, 36 months from now, and then once that pipeline matures, that's when you're really rolling, and doing well.
Yeah. And so this my last slide. We've got time for questions or whatever. I'll leave if you guys want me to, you just tell me what to do. But, this is, always a quote that stuck in my head. I think it's Gary Vaynerchuk. I don't know. But he said social is the flyer that's announcing the sale at the dealership, right? That's where you're catching those early end buyers that early end interest in developing that relationship. Search advertising is the showroom floor, right? If I want to buy something, I'm not going to go on social and just scroll mindlessly until an ad pops up. I'm going to go to Google and do that search. But social is also a very effective avenue. That's why we recommend people put the majority on search just to get those, showroom floor buyers. But social is also an effective avenue. So again, when you're 6, 12, 18 months in, you're really seeing the results. So, that's the end of our deck.
Trenton Bodin: No, excellent. I think this was great to see some of these statistics great to see an understanding of the potential of Facebook and Instagram ads because of how you mentioned before that people were saying that they suck. Understanding that this is a long term play not something that you should always expect within the first three months of seeing results, but you should start to see six to nine, six to twelve months, maybe twelve plus months after you start to nurture them re engage with them.
Start to offer other opportunities to come back to your site, such as a blog article, such as your newsletter, such as social posts, things like that. But I would like to venture over to an area that's buzzing with potential here is with the impact of new technology, such as AI and how that's being used with Google and Facebook ads.
Can you guys shed some light on how these technological advancements are influencing real estate advertising strategies?
Dan Lott: On the search side It's not really impacting it yet. And I always I think, and we, talked, we had a meeting, we had a webinar a few months ago and I was like, yeah, I don't think it's going to have any impact at all. But I think it is just because there's going to be options that are not, there's going to be different search options out there, which is going to reduce the traffic to Google, which is then going to cause Google's cost per lead to increase. Just supply and demand. That's where I would see.
So it's going to cause, especially at the beginning, it's going to cause You're going to have to be more flexible in your advertising spend. Like these other AI providers are going to call, are going to provide a different advertising option and you're going to have to be able to get in there, dive in there and test some stuff out to see what works for you. But I know Google is actively trying to incorporate AI. They're doing it a lot on the just on the behind the scenes with your advertising, they're using AI and then things like that with mixed results. But the but so that's what they're doing a lot of focus, but then they're also doing it with the AI generated advertising or ad results and things like that. So anyway, that's my thoughts on the, search side.
There is going to be an impact. It's not huge now, but it will be. And it's just going to cause more confusion. And that's why you need, a steady hand like CINC, which is the One of the largest advertisers in real estate to guide your spend at least on the search side.
Harry, what's your thoughts on social?
Harry Kierbow: Yeah it's similar on the social side. I don't know if you guys are working in Facebook ads manager, business manager now, but there's a tremendous amount of Suggested AI options and that kind of stuff that you can use, will they be, how effective will they be?
I don't know. Something will be right. And Dan, I think what you're saying makes sense about there will be other there's always other providers coming up that are trying to take down the stranglehold that, Alphabet and Meta or Google and Meta have on. On the advertising industry as a whole. Yeah, I think that makes a lot of sense.
We use AI for some, some generative purpose purposes for creating ads, that kind of stuff, images. I think there will be a lot. There's a lot of stuff behind the scenes like dan said, a lot of false positives that are happening now with ads getting denied and things like that, which is fun. Yeah, I think that'll just be really interesting. I know when you talk about AI 1 way that we've incorporated that and I think have, Improved our services is with a newer version of our AI that's been released for messaging for clients. So better communications, better opt out rates, all that kind of stuff. Basically just tailoring more to what that person is saying. And every message being sent out is individualized now, which helps deliverability and spam reports and that kind of stuff. I don't know how impactful it'll be to. Like Facebook as a whole. There's stuff going on in the background. I don't know what that'll look like, but I do think the implications of it in like downstream, how we interact with leads and how we convert leads. I think that's where it'll be more prevalent myself.
Trenton Bodin: So I'm going to shift just a little bit going from, we've generated leads talking about how the structure of those are working. Now that we have them in our system and we're Communicating with them, do you guys offer such like a retargeting type of campaign so that way they continue to be re engaged with?
Harry Kierbow: So we do have, we have a couple of different remarketing options. One is a branded remarketing option or brand advertising, which is your traditional kind of someone visits your site, they're followed around with your face, your tagline. The goal of that is to familiarize people with you when you follow up with them. Oh, you're that person that's been following me around on Google for 6 months. Yes. That's me.
And then we have a dynamic property advertising type or remarketing type that we call List Cast. If you guys are familiar with their dynamic ads for real estate, or now they're just called Facebook real estate ads. That's the framework that is built on. So that'll actually take into account what that person is seeing on your site, the characteristics of the homes they're looking for and then show properties based on that. So we definitely utilize remarketing once we're able to get those leads in the door.
Trenton Bodin: Which will be great for staying in front of them, especially if they were someone that came in last year or the year before. And just for everybody in attendance, just don't ever forget about those leads that may not have done anything in the past, because at one point in time, they did express interest. And then you have to think of when they were expressing interest as far as what the market was like at that time and how things have changed progressively since then. Always keep that in mind and how you can definitely try to reengage those and then with the the services of CINC obviously having that retargeting. They have their AI that's following up with the leads as well, making sure that you have the correct smart plans in place as far as that 60 day campaign looks like. So all those combined will help you be able to convert these leads and just know that you probably can't just do it with one of those pieces. You really need to make sure that you have a cohesive unit there that's going to be following up.
Dan Lott: And that's a good thing in that if we, if you're with CINC or with another CRM company, the the property alert emails, and you're just tracking like somebody who registered two years ago, but it's still on a drip campaign where they get property alerts. And if they click on one of those properties two years later, it's Oh, maybe this guy's actually thinking of going ahead and buying and give them a call or get them The AI will kick in with text messaging. So there's a lot of, as he said don't forget about these old leads though. They buy houses. And we always hear about now that we've been around for 12 years, it's oh yeah, this guy registered 10 years ago and now he finally bought a house. It's yeah, it happens. It really does.
Harry Kierbow: But I think your point, Trenton, sorry, I'll be real quick. I know we're right up. But I think your point about the pinup demand is a really good one, right? And people have been waiting to see like what's going to happen with the mortgage rates. So I, agree with you. I think once things smooth out, we will see a big increase in the conversion. So yeah, I think that's a really good point. And I just wanted to delay the end of the webinar to say that.
Trenton Bodin: That's all good. I want to say thank you guys for those in attendance. Thank you guys for sticking with us. Dan and Harry, thank you both from CINC. Share some great invaluable insights here. And I hope everybody found this webinar informative and enlightening as I did. I love seeing some of those statistics as far as how Facebook lead ads were outperforming Google pay per click and at a better price point as well.
So just keep in mind that as you guys try to plan out your your strategies here in the next quarter to six months here but thank you guys for having us here and looking forward to our next talk that we have with you guys.
Dan Lott: This is great. Thanks, Trenton.
Harry Kierbow: Yeah. Thank you very much. And thank you, everybody. This was really fun. So appreciate it.
Trenton Bodin: All right. Have a great day guys.
Harry Kierbow: Have a great day.