This article will buck the trend about Facebook Ads for real estate.
For a long time, I have been observing and reading all the great things about real estate leads from Facebook and how popular this platform is for real estate professionals.
The short answer to whether Facebook ads work for real estate:
Yes, Facebook Ads work for real estate, provided you…
- Are aware that most prospects on this platform have problems and needs they are unaware of (buying or selling is likely something they may do in 6-12 months).
- Find workarounds for the special ad category.
- Have a nurturing and follow-up system in place.
- Know how to deal with ad fatigue.
- Don’t use Facebook’s own lead generation forms.
- Are aware that the majority of users are not in the age groups of sellers.
- Have a backup platform in place if your account gets disabled for no reason.
So, you can generate real estate leads from this platform, and it can be worth it, provided you get these things right before, during, and after launching your lead gen campaign.
However, I don’t like presenting Facebook real estate lead generation as easy and generally as an economically-sound option.
For various reasons, it’s often presented as the “be-all and end-all.”
But just because something is popular doesn’t mean it works from the get-go.
Besides, we often don’t even know what “it works” means anyways. Because it’s not clearly defined.
Some articles cover whether Facebook ads work, then say it works, but do not mention how it does regarding marketing performance indicators.
This article will be different.
I have a love-hate relationship with Facebook ads (well, with all social media).
So, I hope it will be beneficial for painting a clear and honest picture of the real situation with Facebook ads for real estate and whether they are worth it.
User Behavior Demographics on Facebook and How It Is Relevant for Real Estate Lead Generation… Think Curious Gossiping People at a Cocktail Party
Let’s start with a story. It’s a story about Chana.
Chana is 35 years old and an avid fan of Tolkien’s books (e.g., Lord of the Rings).
And a rather unhealthy morning routine she has after snoozing four alarms is checking her Facebook feed on her phone first thing.
Actually, that’s not the only time she checks her feed.
On average, she checks it several times daily and spends 57 minutes on Facebook.
Much of what she consumes is news her friends and the people she follows share.
So, while she is checking her news feed and watching several in-feed videos, usually without leaving comments, today is different.
She suddenly stumbles upon a video about the new series “Rings of Power.”
She discovers there is already a lively debate going on in the comments.
There seem to be two factions of Tolkien fans.
One faction complains passionately about the bad screenwriting the series has shown, and another doesn’t care too much about it.
Since she is not spontaneous and has already been checking her feed for a fair amount of time, she suppresses her impulse to comment.
She decides to return later to enter the discussion defending the faction that likes the series so far.
Although she should get going and get some breakfast, she decides to do a little more scrolling and suddenly sees a post (maybe your ad).
“It’s probably advertising,” she thinks. The ad says, “Name the price of your home.”
Entirely irrelevant to her present life situation, she doesn’t have to think much about it (she is far from owning a home) and just leaves Facebook.
Chana’s story is a short snippet of her life and is relatively shallow.
The only thing that border lined a struggle was suppressing her impulse to comment.
But let’s prevent this article from becoming a novel chronicling her struggle to win the argument with the adversaries who don’t like “Rings of Power” and why she needs too many alarms in the morning.
So, I didn’t develop the plot, Chana’s character, and her hurdles further.
But there is something we can take from this little user story.
It’s based on the following user behavior statistics about Facebook:
The largest user group is in the age range between 25 and 44 (that’s 44.6%).
Since this is not the typical age group of sellers, chances are understandably lower to generate seller leads via Facebook Ads (source).
Something not to neglect, however, is that the fastest growing demographic is aged 65 and older (so not all is lost regarding generating seller leads via Facebook) (source).
Like Chana, a large majority (70%) visits Facebook daily and spend 33 minutes across devices and 57 minutes via mobile phones on the website (source).
What does the majority (two-thirds of adults) consume?
News (only in their bubble, of course, because of Facebook’s algorithm).
And where is this content coming from? It comes from friends and people who followed (54.4%) (source).
The preferred content format consumed is Facebook in-feed videos (51% of users).
Let’s also briefly examine the performance of businesses running ads to get the whole picture.
Ads have become more expensive since businesses now pay 122% more per ad unit than a year ago (this stat is from 2021) (source).
Suppose I understand the statistics correctly, according to this source.
In that case, 40% of surveyed companies (a minority from where I am coming from) believe using Facebook Ads is effective.
But the data is a bit contradicting overall.
Contrarily, this relatively objective source mentions that Facebook would provide the highest return on investment of all paid channels for most companies.
Considering the above statistic about the mobile phone use of Facebook, it’s no surprise that mobile ad placements outperform desktop by over 45% (source).
Starting with a mobile placement is also what I recommended in my article “The Facebook Marketing Strategy Guide for Real Estate.”
In my article about real estate prospecting conversion rates, I mentioned a 10.68% real estate lead conversion rate from Facebook Ads.
The 10.68% look good on the surface.
But as the above statistics already show, there is a lot you can do wrong.
So, when you are too pushy and try to sell a product directly, as this source indicates, you can expect lower 0.1 to 0.2% conversion rates.
This may happen when you run Facebook ad campaigns the same way as direct mailing campaigns or lead generation campaigns more suitable to prospects with a higher product and service awareness.
Now that I’ve buried you in statistics, what can we do with them?
We can better assess what you are dealing with when you consider generating real estate leads on Facebook.
Perry Marshall writes in “80/20 Sales and Marketing” (I read it once yearly) that Facebook is like a cocktail party and Google is like Yelp.
So, when you run ads on Facebook, it’s like the guy selling flowers, interrupting a group of people at a cocktail party, and gossiping about the latest events.
They are unaware of the problem they may have the night before their wedding anniversary.
Suppose the flower salesman knew that the people at the cocktail party would all have their wedding anniversary the next day (pretty unlikely) and usually forget this day.
In that case, the situation would be much more favorable.
This flower salesman could make the people aware of them having problems.
In contrast, Google users already know they have a problem, need, or at least a question.
Let’s stay with the flowers.
Quite embarrassed, a user would remember the wedding anniversary just the day before and look hastily for a flower delivery service or something like that.
The infographic below will illustrate the contrast between Facebook and Google users’ product and service awareness.
I will also use the infographic of the different product and service awareness levels I used in this article.
What I think is essential to remember is that when you enter the game of running Facebook ads for real estate, you enter the content marketing game.
And this happens on all social media channels.
Thus, running ads needs to be approached like content marketing.
So, you target people who are usually unaware of a need or problem.
Yes, leads may be cheaper, but as I worked out in this article, the cost per qualified lead may be higher.
This is also why many perceive real estate leads from Facebook as bad quality.
When you expect higher problem-aware leads from Facebook, then yes, what you get is likely bad quality.
They are primarily leads that need to be worked on to increase their problem and need awareness, and that’s done with follow-up systems.
When you know the level of need and problem awareness Facebook users usually have, it’s to be expected. Then it just is what it is.
A Word or Two About Traffic & Lead Quality… Facebook vs. Google Ads
Now, we can explain why Facebook’s traffic quality is not on par with Google’s.
The users of both websites are just on a different problem and need awareness level.
The higher the awareness level, the higher the traffic and lead quality, the higher the costs per lead, and thus the competing advertisers.
But, in turn, it also often means lower costs per qualified lead.
You may pay less per lead initially when the problem and need awareness are low.
Still, you also have to factor in the costs to bring the lead up in their awareness level via nurturing and follow-ups.
But there is another technical issue at Facebook’s lead capturing level that can deteriorate the lead quality.
To better understand, let me explain a logically transparent concept from the world of CRO (conversion rate optimization).
You may know them.
I think about long lead capture forms often found on insurance and financial service providers’ websites.
When you are only semi-interested in their services, you rather click away than spend your valuable time filling these long forms out.
These hurdles and hoops to jump through in the conversion rate optimization world are often called friction.
And the higher the friction, the lower the lead conversion rate, and vice versa.
So, it’s no wonder many CRO sources recommend reducing this friction to increase the generated leads.
What happens when you use Facebook’s lead or the automatic messenger lead capture campaigns where users can fill out a form with just one click and instantly be converted into your lead, never leaving the platform?
Exactly, you reduce friction and can usually generate more leads.
Sounds nice at first.
But these prospects will not leave Facebook, and the platform can show them more ads.
So, it benefits Facebook, and not necessarily the advertiser.
You will lose the opportunity for them to visit your landing page, which you could control and tweak.
As a consequence, the leads generated will often be of lower quality.
Doing this right is art and science at the same time.
You want to find an equilibrium (with enough testing) between enough friction to generate a decent amount of leads while avoiding lowering their quality too much.
This leads me to…
4 Sneaky Tactics to Increase Facebook’s Real Estate Lead Quality and Outwit the Data-Grabbing
So, in general, you want to reduce your reliance on social media platforms such as Facebook regarding lead generation directly on their platform.
Instead, you want to get them to your website.
Conversion rate optimization strategies and tactics will have almost no limits.
To name a few, you could change…
- Your copy
- Form elements
- Overall design
You can also better expose the visitors from Facebook to your brand, and they can browse your website, read articles or consume other content.
So here are three sneaky tactics to increase Facebook’s real estate lead quality and outwit the data-grabbing.
- In general, host the starting points of your sales funnels on your website (e.g., polls, calculators, etc.)
- Don’t use automated lead generation campaigns; capture the leads in your forms.
- If you can’t forgo the use of these campaigns, where leads can be generated automatically with a click of a button, try to get them to opt into your email list with the help of an enticing lead magnet.
- Bring Facebook traffic via ads to high-quality content, but have a Facebook Pixel installed, so you can retarget the visitors with a lead magnet to opt into your email list.
This is a bit like thinking around corners.
But something else exists on the targeting level that’s not ideal for running Facebook ads.
The Next Bummer for Real Estate Pros… Facebook’s Real Estate Ads Policy (Since 2020)
Facebook’s Real Estate Ads Policy (the Special Ad Category) is the next hurdle where things can go wrong when running Facebook ads for real estate.
I have already had more than five different Facebook ad accounts.
And for no reason, they can be disabled. You never know when and why it’s coming.
Not the best place to be when you want to rely on a steady stream of real estate leads.
Just look at the various search suggestions regarding this topic below and the many results catering to the issue of getting a Facebook ad account back.
It’s a common problem, even if you do everything right.
That’s for Facebook’s general ads policies that, similar to Google’s various algorithm updates, are a bit like Voodoo.
Now for Facebook’s Real Estate Ads Policy (Special Ad Category):
This update was done in 2020.
And when you want to create a new ad on Facebook and it is related to housing, credit, or employment, you need to put it in the Special Ad Category.
What does this mean?
In one sentence: You get to use the castrated version of Facebook Ads, heavily limiting your options of granularly targeting your prospects.
You will not be able to target…
- Geographic targeting by postal or zip code
- Interest targeting related to religion, gender, or ethnicity
And you cannot exclude audiences based on lookalike audiences and interests.
Now, I may get into controversial waters…
While I am against discrimination in general, Facebook probably overdid this, at least by excluding age and exact geographic targeting by postal or zip code.
So you can’t target specific age groups due to this special ad category anymore.
Therefore, you will always risk that Facebook will serve your ads to age groups unlikely to be ideal leads.
And since the majority of users are in the age groups between 25 and 44, it will be especially challenging to generate seller leads.
Therefore, you will find more often service providers offering to generate buyer leads.
There are some workarounds for that (but still, they are workarounds), such as…
- Targeting specific locations (no zip codes) with an extended radius.
- Targeting interests that correlate with the prospects you want to reach.
- Uploading an email list of prospects (e.g., from data providers) and creating a lookalike audience.
Another bummer unrelated to the special ads category is the nature of running Facebook ads long-term.
After a few weeks, the effectiveness will also decrease because of the ad fatigue I covered in this article.
This doesn’t happen that way with Google ads.
Yes, you will have to tweak the campaign initially until it becomes profitable, but once you do, you can run it for much longer.
So, yes, you can run real estate ads on Facebook.
Still, again, you will be limited in taking advantage of the usually nice and granular targeting features it offers in other industries.
A Real Estate Facebook Ads Case Study from a Struggling Real Estate Investor Who Tried Really Hard
I will end this article with a small case study of a struggling real estate investor (also relevant for realtors) who tried pretty hard to make a Facebook ads campaign work for himself.
You can find it here.
When you read it, you will see how easy it is to get things wrong by having wrong expectations.
Again, Facebook lead generation is getting into content marketing and mainly targeting prospects unaware of their problems and needs needing long-term nurturing with a follow-up system.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.
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