Transcription
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: Does 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. And 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: Does Facebook Ads Work and How Can You Make It Work for Your Real Estate Business?
Yep, it's going to be good.
Yeah. So, the 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 tends to get in this industry specifically. I think the biggest things that you'll see is 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 tend to be a poor understanding of what Facebook is and what it isn't, and where it fits into your strategy. And 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. Like, 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 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. So, even our most successful clients with Facebook, they 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. And the reason they marked that is because Facebook went through this fun journey of privacy. And 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. And 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. And 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?
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. And 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. And 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 they used to do a lot of targeting 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 were even 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 were actually having better results with different strategies anyways. And 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 is 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 like the type of lead you're getting. And 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 that's 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 that? 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, apps that are outside of the Facebook platform, but are still Facebook ad inventory. And in general, almost always, those are going to have much lower quality of traffic than the Meta proper spots, like the feed, Instagram, those more like 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 into just calling it Meta. Okay. I don't know why.
So, that considered, really helpful what you said. So, 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 the series, but we did, I think it was eight, 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, like 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. And 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. So, 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. And we could talk about how you dial in quality a little bit better. But yeah, that's just the simple example I would give. And then the other thing is that these third-party placements sometimes have incentive for fraud. Because like, is Facebook going to knowingly sell you traffic from Facebook that's not good? Probably not, because the reputation 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. It's a huge industry. So there's a real industry of like spam leads. Of course, how would you, if you were doing that, how would you make your traffic not look complete junk? You would probably end up taking some actions that people care about, as long as they don't cost you money. For example, filling out a lead form. If you didn't do that, then Facebook would really know that you're not good. But if you start doing that kind of stuff, then as far as Facebook's concerned, your quality channel that's providing quality leads because they don't see anything that's not that. So that's something to keep in mind. So the placements are like Facebook, Instagram, and then you have this Audience Network, and you have like Messenger now. And Facebook's always buying new stuff and releasing stuff. Like, I think are they on WhatsApp yet, or is that coming?
They are. Yeah, so we got some WhatsApp placements and stuff like that. But the big one's going to be like Facebook Newsfeed in this industry.
Yeah. What's your experience with Instagram? A lot of people would say you shouldn't target Instagram. What's your opinion?
What we've seen actually work super well is Reels on both Instagram and Facebook because they're highly engaging, they get a ton of traffic. And so just on both platforms, Instagram and Facebook, that's been great. And I always recommend having both as an option at first, and then if there's like a difference with data, then make changes. But in general, I haven't seen a difference at all in the quality between the Facebook feed and the Instagram feed. I think that quality is pretty consistent. The other thing is a lot of times people are just thinking where they're thinking like TV, right? Like, I don't want to run an ad on that show because my person doesn't watch that show. The reality is, your person does. There's just a smaller percentage of them. So that's where my mindset has always been. We're not looking for people on Facebook or for people on Instagram. We're looking for motivated sellers. If we can get really good at targeting motivated sellers, which we're going to talk about how to do that in the rest of the series, like how do you get your targeting dialed in with limited options, if you get really good at targeting motivated sellers, I don't care what platform they're on, right? We can have a motivated seller on Facebook or a motivated seller on Instagram. What you're going to find in this industry is that we spend a lot more money on Facebook than on Instagram, just by nature of more of our target audience being there. But I don't see any reason to ignore Instagram if they exist, if your targeted audience is there. So the only thing that we really stay away from is stuff that really messes with the lead quality, which is mostly going to be Audience Network. And here's the tricky thing: if you don't know what you're doing here, you will automatically target Audience Network without really trying. And I've seen it for people be a big failure of their campaign at some point. Like, they're running a Facebook campaign, it's spending some money on Newsfeed, it's spending some money in Audience Network, but you don't know how much it is. You're not really paying attention to how much on either. And maybe the Audience Network spend is really small, and you get some weird leads here and there, but that's just kind of part of the game. And then one day, Facebook starts noticing it can get leads really cheap in Audience Network, so it starts doubling down, and that becomes 90% of your budget. And then suddenly you have this big shift in lead quality. But as far as you can tell, you haven't changed how you've managed the campaigns at all. I've seen a lot of people in this situation where their quality is just taken a nose dive. And because they don't understand how placements affect the quality, if you have, if you ever have in a digital marketing campaign, something that produces a good lead quality and something else that produces a bad lead quality, it's really ripe for the scales tipping as to how much spend you have on one versus the other at some point. And that's going to be like the silent killer. Like, you never made a change, but your lead quality changed. And it's because you didn't make the change, but Facebook made the change. That's how their algorithm works, and you have to watch for those things.
I have a theory too for the Audience Network thing. Because I know there's some fraud in there. But outside of that, there's genuinely a large number of people that will want to buy the house that you might have in your picture of your ad, or they want to rent a house or something like that. And I talked with so many people that are just really frustrated by this. And they think it's a messaging issue. They're like, "I just need to make it like more clear." We have gone to the ends of the earth trying to make it like as clear as the ad can possibly be. You will find people that speak a different language, and they want to rent the house for whatever you're for whatever you're doing, and they'll fill out the form and clog up your pipeline. The only thing I can think, and there's no way to prove this, but it could have to do with where the ad is contextually shown, especially if you're showing on third-party websites and stuff. Facebook could find that it works really well on a website where people are looking for rentals, for example. And then there pops up your ad in the middle of the page, and it says, "You need to sell your house." But then the language barrier makes it so they don't realize. And you end up getting a lot of those types of leads. So anyways, if you want to get those types of leads, like in Facebook Marketplace and stuff, they're really cheap, really easy to get. So you don't want to spend a lot of money trying to find motivated sellers and find those instead. So yeah, that's easy advice, right? Cut out Audience Network. Anything else that you cut out in terms of placements?
I've seen that taking out the Facebook Marketplace is a good one also to exclude. It's just a very different kind of audience than the rest of the platform. And there's just a bit more of an impulsive audience, I guess, is the best way to like describe them. So there's less friction involved. And there's also less of your ad copy visible as well. And so there's less time and space for you to disqualify them if they aren't your target audience. The other thing that you can have in Marketplace too is it's another situation where things can be very contextual. Let's just say I'm someone and I'm looking in Marketplace for a house to rent, which is a common use for Marketplace. Then the ad could show there, and Google and Facebook could learn that the ad shows there pretty well, pretty successfully, and it gets people to click it. But contextually, it's in a list of places that they can rent. So my experience with Marketplace is that the lead quality can be really tough.
Yep, definitely. Cool. All right, so that's the beginning of this. Just to lay out like the rest of this series and what we're thinking. So the biggest thing that people are struggling with right now on Facebook ads is targeting. And the reason is, it doesn't work the way you think it works. The way that you actually get to the motivated sellers is so different from other channels. It's different from Google PPC, it's different from direct mail, it's different from cold call, it's different from TV. It's like Facebook is a completely unique machine, right? So the next episode, that's what we're going to talk about. We're going to talk about how can you actually target specifically with Facebook to get the kind of people you're looking for. After that, we'll talk about ad copy. And then in the video following that, and because there's a lot of different ways that you can test ads and different types of creative that we're finding working better than others, so we'll dive into those. And then the last video, we talk about some of the stuff that we're most excited about, that we're on the cutting edge of right now, that's making a big difference for our clients, and that we think will be a big piece of our strategy over the coming years as well. So, anyways, there's a brief idea of the series here. But if you take nothing else from this video, I want you to consider: Facebook ads do work for real estate investors. It has a bad reputation because of that bad reputation, people are quick to cut it before they can get it to work. And because of that, we've even noticed our internal team be quick to cut it because clients feel so poorly about it from the very beginning. And sometimes you get leads that are just straight-up frustrating from Facebook because the lead quality isn't the same as PPC, but you can still get a great return on investment on the channel, right? So definitely give it a chance. And if you're working with us, it's pretty economical to run both Facebook ads and Google ads side by side and see how that works. If you're doing it yourself, then the good news about Facebook is it's easier to learn than Google is. I think Google is, if you could do Google ads, you could do Facebook ads. If you can do Facebook, it does not mean that you can do Google. They are absolutely very different platforms, but there's very little that Facebook has that Google doesn't, and there's a lot that Google has that Facebook doesn't. So just keep that in mind. We'll dive into it. That's why we have a shorter series for Facebook than we did for PPC. There's a lot more to go into for PPC. But we'll, yeah, we'll talk about what is the stuff that's working the absolute best in this industry right now. And I'm super excited to go into that. But for today, that's it, and I'll see you guys next week.
Okay, thanks.