Friday, December 8, 2006

Should you bid on PPC ads?

PPC stands for Pay Per Click - You pay every time someone clicks over to your website from your ad.

A lot of home builders and new home community developments are showing up on google adwords and yahoo sponsored search. I am often asked is it worth it? "Is it worth it to pay $1 for a site visitor to my website selling new homes in a specific community?"

With all marketing expense decisions, you need to know the numbers. What is your cost per website visit? How many visits does it take to get a lead? How many leads does it take to get a traffic unit to the model? How many traffic units does it take to get a sale?

Let's say you paid $1000 to get 1000 visitors to your website and 10 of those people filled out a lead form and let's assume your on site agent was able to get 2 of those people to the model and 1 of them bought a new home from you. If the sale price of the home was $150000. Then you spent $1000 to get a sale...that's less than 1% of the sales price. I know a lot of builders that would gladly pay only 1% to sell out their subdivision. Many of them are spending a lot more than 1% on advertising costs.

The problem is the limited availability of searches and the bid strategy. Sometimes it is very hard to get 1000 quality visitors to your website for $1000 looking for the your product or new home. It may cost you $2000, you may have a location or product that is not in demand. Picking the right keyword phrase is a big challenge.

If you are building condos in atlanta, simply bidding on the word 'condos' may not be cost effective. 'condos in atlanta' may be be too expensive. Bid on the keyword phrase 'new homes flowery branch' and you could probably get traffic for only $0.50 a click, but with so few people searching that phrase, it would probably take you an entire year to get 1000 people to click on your ad.

How about 'Intown atlanta condos'? You will probably get good quality traffic to your website, but if the search is only being performed 200 times a month, you can't rely on the search engine to help you sell many homes. With the scenario above, it would take you 5 months to get 1 sale.

My recommendation is to get someone to help you with this type of marketing. It is not a waste of time or money and could get you some incremental sales at a very effective cost.

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