Many Realtors and real estate investors complain that PPC (Pay-Per-Click) campaigns are no longer cost-effective. Real estate keywords have become so competitive that the cost-per-click (CPC) is increasing with each passing year.
All the big brands in the real estate industry are aggressively bidding for high converting keywords on Google AdWords (Google Ads), pricing individual real estate professionals out. As a result, most of them don’t even think of giving this great advertising platform a try.
There is no denying the fact that PPC costs are rising, but the best thing about Google Ads is that you have a great deal of control over how much you want to spend for clicks and conversions. It means that you can adjust your bids and run a profitable campaign in your budget.
In this guide, I am going to explain how real estate PPC cost works in 2022 and how you can optimize your ads to lower CPC and customer acquisition cost (CAC):
How much does real estate PPC cost?
I am going to let you in on a heck that makes it extremely easy to find out real estate PPC cost for any keyword you want to target.
Real estate PPC cost ranges from $0.50 to $5 for Realtors (CPC for keywords such as ‘homes for sale’) and from $5 to $65 for real estate investors (CPC for keywords such as ‘sell my house fast’).
In order to get a more accurate estimate of real estate PPC cost, you can use Google’s free tool ‘Keyword Planner’.
In your Google Ads dashboard, go to Tools & Setting and then click Keyword Planner.
Then click on ‘Discover new keywords’ box. On the next page, type in the keyword that you want to know PPC cost for.
Before click the ‘Get Results’ button at the bottom, you should change the location.
Let’s say for example, you are a real estate agent in Kings County, NY.
On the location pop-up, type in Kings County New York and click the relevant location link in the drop down. Remove ‘United States Country’.
After you have set the location, click Get Results button and click Save.
You will get a lot of data including average monthly searches, bid range (lowest and highest) for your target keyword. You will also get keyword suggestions by relevance.
The big range is an estimate of cost-per-click for your target keywords. This helps you get an idea how much your real estate PPC campaign for that particular keyword will cost.
You can also make a list of keywords and get an idea of how much you will need to pay for those keywords by click ‘Get Search Volume and Forecasts’ box which is located next to ‘Get new keywords’ box.
Make sure that you have ‘Kings County’ selected for location on the next page also. Once you click ‘Get Started’ button on the next page, you will get an estimate of how many click you will likely get. Increase or decrease Max CPC to know if the number of clicks changes.
How to lower real estate PPC cost?
Now that you know how to know real estate PPC cost, let’s discuss how to make it more cost-effective and get the best out of your ad spend:
Don’t overwhelm yourself; start with 1 campaign
When you start out, you will feel like setting up multiple campaigns, so that you can drive traffic for a lot of keywords.
For example, a real estate agent can launch several campaigns at once to target first time home buyers, people relocating to his or her area from other places, and potential sellers looking to get an estimate of their home’s value. You can set up a separate campaign each type of these potential clients.
The same goes true for a real estate investor. You can set up different campaigns for different types of prospective sellers – for example, people looking to sell without a Realtor, people looking to sell fast for cash, and people looking to sell as-is (in most cases, it would be a mistake to target all these types of audiences with one campaign because you won’t be able to write highly relevant ad copies which address pain points of sellers with different motivations).
This type of strategy is a huge mistake, particularly when you are get started on this platform and when you have a limited budget.
Start with just one campaign targeting a few keywords. It will give you an idea of max CPC, conversion rate and several other metrics. Armed with this data, you can set up campaigns in the future with more confidence.
Consider switching to manual bidding
Google has launched AI-driven smart automated bidding feature which makes setting up and running a Google Ads campaign a breeze.
This feature automates the bidding process with Google deciding the bid amount based on the competition for a given keyword.
For real estate professionals starting out with Google Ads, it’s definitely a great feature. But, if you want to lower your PPC cost, you should consider switching to manual bidding.
The reason is that you will have a greater control over how much you want to bid for a keyword.
You will find that many keywords are getting a lot of impressions, but they are not driving any sales. You will be able to lower the bid for these keywords in a manual bidding strategy.
Your ads will show at a lower position for these keywords, so you will pay less and at the same time, won’t risk missing out on conversions in case a motivated buyer or seller happen to use the search queries related to those keywords.
On the other hand, you can increase the bid for keywords which are driving the most amount of conversions.
This will reduce your PPC cost and improve the quality score of your ads.
Focus on search network in the beginning
Avoid wasting money on display network advertising, especially in the beginning.
Display advertising is effective only if your objective is brand awareness and you have a huge budget.
Leverage the power of long-tail keywords
As a real estate professional, you probably want to get a lot of traffic for search queries such as ‘homes for sale’ or ‘realtor near me’, but these keywords are extremely competitive.
You should get try to target less competitive keywords. Find out the average CPC for long-tail keywords such as ‘closing cost for sellers’, ‘real estate agent fee’ in your area.
Long-tail keywords are usually high-converting and less competitive which means that you will get a better conversion rate without breaking the bank.
Get familiar with conversion metrics
Once you’ve run the ads for a while, you will start getting an idea of your conversion rate and how much each conversion is costing you.
But even before you get this data, you should know how much you are willing to spend for a sale. Once you determine this, you will know the maximum amount of money you are willing to spend for a lead.
So let’s say for example, you are promoting listings in your area, but in order to view those listings, a person has to fill out a form and share his or her phone number and email ID.
Let’s assume, one per 100 form sign-ups converts. It means one in 100 potential buyers (leads) who filled out the form hires you. It means that your conversion rate is 1%.
From your previous sales, you know that your average commission from a home sale is $12,000. This is your profit margin, right? You are willing to spend 30% of the profit margin for a sale.
So let’s use this data to determine the maximum amount of money you can spend for a form sign-up.
Here is the formula:
(profit per sale) x (1 – profit margin) x (website conversion rate)
$12,000 X (1-0.70) X 1% = $36
So you can spend a maximum of $36 for a form sing-up. Multiply 36 by 100 (we assumed that one in every 100 people will convert). $3600 is 30% of $12,000 that you are willing to spend for a sale.
There are several similar formulas that can help you to determine max CPC, return on ad spend (ROAS), target CPA etc.
Optimize your landing pages and improve quality score
A high-converting landing page can help you reduce PPC cost.
Every element of the landing page should serve a specific purpose and prompt the users to take a specific action – for example, a landing page where sellers can get an estimate how much their home is worth instantly or calculate their closing costs. If you send prospective home buyers to this page, you will end up wasting a lot of money.
It means that you may have to create multiple landing pages.
Most real estate professionals send the users to the home page of their website. Nine times out of ten, it’s a big mistake.
Adjust bids based on historic data
A great thing about Google Ads is that you can track everything. You can get specific insights on what time of the day or which days of the week are bringing in the best conversion rates. Are you getting more conversions from mobile devices?
These types of data can help you spot opportunities and adjust your bids accordingly. Let’s say for example, you are getting a lot of clicks on Sundays, but no conversion. You can lower your PPC cost by reducing your bid amount on Sundays.
Google Ads can help you get high-converting search traffic within 24 hours.
Simple steps such as optimizing your landing page, adjusting bids, and adding negative keywords can make a big difference and help you lower PPC cost.
Real estate industry is competitive, but you can still get leads in your budget because you have control over how much you are willing to spend for conversions.
Let me know in comments if you have any questions or feedback?