"Hello and welcome back to another episode of the Collective Clicks Podcast. This is your host, Brandon Baitman, and today I'm joined by Garrett Kraan, our Director of Paid Media, to talk all about Facebook ads. How are you doing today, Garrett?"
"Doing good. How are you?"
"Hey, doing awesome. Thank you. I'm super excited for our topic today, and that topic is, 'Do Facebook ads still work for Real Estate Investors?' It's a little bit of a controversial topic, and the reason I say that is because there's a lot going around in the industry about the efficiency and efficacy of Facebook ads. Some of it, I think, is true. Some of it is founded in poor strategies and things like that. So, this is the beginning of a four-part series where we're going to break down: 'Do Facebook ads work, and how can you make it work for your real estate business?'"
"Yep, it's going to be good."
"Yeah, so first, let's just go over what exists out there. If you look around, you'll see a lot of negative attention that Facebook ads tend to get in this industry specifically. I think the biggest things that you'll see are a lot of people struggling with lead quality pretty significantly on the platform, just arguing that you can't really make it work. Is there anything else that you've seen, Garrett?"
"Yeah, I think there's just a poor understanding of what Facebook is and what it isn't and where it fits into your strategy. What we found is that it actually can be a much bigger part of your marketing mix than people think."
"Yeah, and I think it has some inherent limitations. Even if you do Facebook just right, it's more limited in scale than PPC is, at least that's what I've noticed in this industry, which is interesting because it's backwards compared to most industries. In most industries, you have a really limited search volume on PPC, and then with Facebook, you're doing demand generation and you can reach way more people. But in this industry, just because we're so niche and there is so much demand on Google, I think it's definitely a lower level of scale. Even our most successful clients with Facebook spend less money than our most successful clients with PPC. You have to consider it's a lower level of scale. But the interesting stat that you shared was that our cost per deal was actually lower on Facebook last quarter than it was with PPC across our clients, and I thought that was really neat and not what a lot of people expect to see, just considering it has such a bad reputation in this industry."
"Yeah, it's true. If we look at also what we're hearing a lot in the industry, a lot of people marked a few years ago as the death of Facebook ads. The reason they marked that is because Facebook went through this fun journey of privacy. We talked a little bit about this in our last podcast, about the world of privacy and what's happening with digital marketing. In short, to summarize it, companies like Facebook gather a lot of data on their users, and it's not heavily regulated, and people are starting to get upset about it. One of those places where people get upset is it's called discrimination. If you can show an ad to one person but not to another person, we marketers call that ad targeting, not discrimination, but the government is what the government is, and Facebook got sued. Because of that, they've gotten really gun-shy in certain industries, especially where there's a history of discrimination in the United States. One of those is going to be the housing industry because equal opportunity housing is a big thing that I'm sure we all believe in. So, that considered, Facebook got a lot of negative press for allowing people to target based on certain sensitive demographic characteristics like their age, their gender. Is there anything else that you know of?"
"It's a lot of categories. I don't know if that's Facebook preemptively saying, 'We don't want to target based on these categories,' or if that's specifically part of the lawsuit, but zip code is another example."
"Zip code, yeah, targeting one zip code but not another. Basically, what Facebook had to do was remove the option to do those kinds of targeting things when you're in a housing category in order to be compliant with equal opportunity housing regulations. For a lot of people, that was the end of the success of Facebook because they used to do a lot of targeting by zip code and by age, right? Because we don't want to reach 14-year-olds on Facebook, but we end up doing it whether we want to or not. So anyways, that was a few years ago's turning point for a lot of people, and people that were successful with Facebook ads started to see that their lead quality diminished really significantly."
"And basically, my summary of what happened there is yes, it became more difficult in some ways for those strategies. Here's the interesting thing: if you looked at what I was doing, and this is before you even were with the company, Garrett, so times have changed a little bit, but the kind of strategies we're using today for Facebook are very similar to the kind of strategies that I was using even before then. A lot of the strategies that ended up getting shut down and didn't work anymore, we actually were having better results with different strategies anyways. When this change happened, it didn't actually drastically affect the way that ads were working, and that's what we're planning on diving into in this four-ad series. How do you think differently about Facebook in such a way that's going to be more consistent and have a higher production over the next several years, even with the difficulties of targeting that we have there, to get it so that you can have a lower cost per deal than PPC like we've had. So, that considered, I think one of the biggest problems that has existed with Facebook that I've seen, I'm curious to hear your thoughts on this, Garrett, is the type of lead you're getting. If you are listening to this and you've ever noticed that with Facebook ads you get a lot of leads that want to rent or buy a house, and very often they're like a rent-to-own type buyer, or they could be more likely to be spam, they often speak another language, so there's a language barrier, and you think that the issue is that you're getting leads with the wrong language. Turns out it's not actually the problem most of the time, because often they're a renter and they speak a different language, so they're like double not the lead that you want. But let's speak to that a little bit. What is the thing in Facebook ads that causes that, and if somebody has dealt with that before, how could they potentially fix that problem?"
"Yeah, so that's going to come down to where the ads are showing. There's a setting on Facebook where your ads can show on what they call the Audience Network, and basically that's a number of websites and apps that are outside of the Facebook platform but are still Facebook ad inventory. In general, almost always, those are going to have much lower quality of traffic than the proper spots like the feed, Instagram, those more native placements."
"Yeah, understood. I think it's a good conversation to be had around placements in general and what is good, what isn't. I like how you called it 'meta.' I just can't bring myself to do that still. I still don't call it 'X,' right? For me, it still is Twitter, but I have given in to just calling it 'meta.' I don't know why. So that considered, really helpful what you said. If anybody's seen our PPC Essentials podcast series, which if you haven't seen that, I highly encourage you to check that out. It was similar to this series, but we did, I think it was eight different topics digging deep into what you need to do to succeed with Google PPC. One of the things that we talked about there was Google search partners versus the search network, and it's a really similar concept to this. If you look at Google, a lot of people assume when you're running ads on Google, you're running ads on Google, and that's not true. When you're running ads through Google ads, sometimes they're selling partner inventory that they don't own, and what can happen with that is that partner inventory is just not as high quality. Where we run into big issues in this industry, but you don't run into issues in some other industries, let's just say I have an e-commerce company and I'm running ads on Google search and search partners, or we could say on Facebook and Facebook's Audience Network, which is what their third-party placements are called. If I have an e-commerce company, I'm optimizing based on people purchasing, so the quality of the traffic almost doesn't matter because it's automatically going to optimize to the better quality traffic, and things don't really become an issue. Where you run into an issue in this industry is oftentimes we're not optimizing for a closed deal because there's a bunch of stuff that happens between here and then, and closed deals are so rare that it's not a common enough conversion event. So, we end up optimizing for something like leads, and when you optimize for leads, if you have any platforms or placements that you could be running that will generate leads but they are worse quality than other placements, then what's going to happen is Facebook is going to see those and often be able to find them at a cheaper cost than your leads that you're getting from other placements. In Facebook's mind, it's just getting you low-cost leads, which is what you asked it for because it doesn't know about the quality. We could talk about how you dial in quality a little bit better, but yeah, that's just the simple example I would give. Then the other thing is that these third-party placements sometimes have incentive for fraud because is Facebook going to knowingly sell you traffic from Facebook that's not good? Probably not, because the reputation is at stake. But if you're some third party that nobody's ever heard of and you're just programmatically selling through Facebook's platform and you want to fake traffic, you could probably make a lot of
money doing that. And so, there's just a lot of fraud, and it's just general worse placements. So, what can you do about that? Garrett, what's a better way that you could set up Facebook placements to get better traffic?"
"Yeah, the easiest thing to do is just make sure you're only running in the Facebook feed and the Instagram feed. When you're looking at your Facebook ads, it's pretty easy to set up an ad set and select your placements and turn everything off but the feed placements. If you do that, it's going to make sure you're just in those spots and you're not in some of those less desirable placements."
"That's great advice. If you're listening to this and you're currently running Facebook ads, I'd highly encourage you to go in there, and depending on the number of campaigns you have, this could take a little bit of time, but just go into your placements and look at the breakdown. Turn off anything that's not either the Facebook feed or the Instagram feed, and those are the primary placements that I would use. There's some other placements that could be okay, but I wouldn't mess with it until you can get feed placements working. If you're not getting good lead quality and that's your issue, this is almost always the thing, because what happens is you go to these third-party sites and these apps that they're running ads on, people accidentally click on the ad. They didn't even mean to click on it, and it's a lot easier to fill out a lead form in some of those places than it is on a native placement on Facebook. So, what will happen is, for those reasons and the ones that Garrett shared, you're just getting a ton of low-quality traffic. It just doesn't work well. So, start there, and if you do that, that's one way you could get better lead quality. That's just a small sample of what's to come. In this series, we're going to be breaking down things like what are the best campaigns, audiences, types of ads, so if you enjoyed this one, make sure you tune in to the next ones."
"This is going to be a good series. Don't miss out on it."
"Absolutely. Thank you so much for tuning in, and we'll see you next week for the next episode of the Collective Clicks Podcast."
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