The State of Multifamily Advertising in 2019
Over the course of the last 2 years, the Carroll marketing team has tested several different advertising strategies and vendors in an effort to create the most effective and efficient way to generate leads. We have also conducted primary research in an effort to gauge the regional effectiveness of advertising sources. Through each of these tests, we have derived insights that are driving the approach we are taking in 2019.
The Declining Role of the ILS
Given trends in consumer shopping behavior, it shouldn’t be surprising that Internet Listing Services (ILS) are losing traction as destination sites that drive the apartment search. Even with a significant investment in brand building by Apartments.com and Zillow.com’s dominance in single family, consumers are looking for the quickest way to get information and these websites are not changing shopper behavior.
The primary benefit of the ILS in 2019 is the size of their websites and therefore, their ability to rank well in search. Few property management companies have the portfolio size that could compete with an ILS in search, and those that do, are not strategically focused on SEO. I’m looking at you Greystar. 😉 More on this later.
Multifamily Advertising Vendors are Taking Advantage of the Industry
It isn’t surprising either that companies have popped up offering advertising services specifically for multifamily property management companies. PMCs are constantly looking for a new lever to pull as competition heats up as product continues to pour into nearly every market. However, these companies are taking advantage of the industry’s tendency to hire from within the industry resulting in a lack of out-of-category experience and its over-reliance on (and trust in) vendors. The result is management fees being charged that are in some cases 2 or 3 times higher than what other industries pay for the same services. Put simply, your $3,000 Facebook Ad budget is actually only $1,500 if you are using one of these services.
This has created a huge whitespace in the industry. Traditional ad agencies lack the industry knowledge needed to perform well and the industry-specific partners are grossly over-charging. PMCs are overpaying and getting fewer leads because of it. This is a huge opportunity for an ambitious PMC looking to outperform in a market.
Google is King
As Google continues to innovate, it is quickly becoming a destination site. More and more each day, consumers are able to access the content they need without ever leaving a search results page. For example, if you search for a property name on Google.com, you will see photos, reviews, hours, contact information, a map, and promotions (if the property is using GMB strategically). It is very easy for a prospect to access basic information to compare against your comps without ever visiting your website or an ILS. This is why your website is essentially a pricing and availability portal. The expensive marketing wrapper you put around pricing and availability is not trusted and rarely consumed because all of the details are found before they ever get there. This is also why the ILS is declining. Their websites are cumbersome, difficult to navigate, incomplete (Google alone has nearly 100% of the apartments), and almost always inaccurate.
The simple truth is that consumers trust Google’s data more than yours or your favorite ILS.
Facebook Advertising is at a Critical Tipping Point
Facebook has been a highly effective channel for targeting in-market consumers in a place where they spend a lot of time. But over the last year, that effectiveness has been chipped away to a point where it may soon not be a viable place to put your advertising dollars.
Following the 2016 election scandal, Facebook was pressured to ramp up security measures. It removed valuable 3rd-party data sources that allowed multifamily advertisers free access to in-market consumers (that is, people actively looking for an apartment). Then HUD sued Facebook for violations of Fair Housing because it allowed advertisers to target users based on demographics. Not to devolve too far into a tangent, but this lawsuit shows how uninformed the government is on the matter. Just because an advertiser creates an ad that promotes a property’s proximity to local bars and targets 21-30 year olds doesn’t mean they aren’t also creating an ad for the same property that promotes it’s gated parking deck that targets 31-50 year olds. This should not be a violation of Fair Housing as it was intended because it actually helps the prospect find the things that matters to them. It is not discriminatory unless the property refuses to lease to a protected class.
Ok, back to the topic at hand. The last event to diminish Facebook’s advertising effectiveness is only just beginning to be understood. Following the removal of 3rd party data, Facebook announced a button that will allow users to delete their data from the platform. What that means is that all of the data that Facebook has about a user’s interests, the websites s/he has visited (including yours), the pages they’ve liked, etc. will all be gone. You will no longer be able to target dog lovers with your special about waiving pet deposits. There is potential for this button to be minimized as it is unclear how much Facebook will promote it and how Facebook users will use it. But it could be disruptive to advertisers.
Combine each of these Facebook changes and multifamily advertisers are limited to essentially running digital billboard ads that target large swaths of consumers who may or may not even be renters. It will waste your budget and time, and we will see more ad budgets going to Google.
Strategic Performance Marketing Wins Every Time
The way to win in 2019 is through a nuanced advertising strategy that capitalizes on 1st and 3rd party data (that is, your own data and data available through data brokers like Experian) to target in-market consumers in your submarket with relevant messaging. 99% of PMCs are still using the same spray-and-pray advertising strategy from the 20th century, but doing it online and hoping that it is more effective. They’ve moved their print ads online and that wastes at least 50% of their advertising budget, if not more. Spend less and get better results by focusing on the tactics that matter in 2019.
As the category gets more competitive, PMCs will need to find new ways to stand out. Giving the same vendors, both ILS and non-ILS, the same budgets and hoping for the same results will not work. The strategy has to evolve to meet the needs of the property and the prospect.
NocturnalXD is an affiliate marketing services provider of Carroll. It provides both managed and consulting services for multifamily owners and operators in the areas of brand development, performance marketing, resident experience, website development, search engine optimization, and marketing strategy. Learn more at CarrollOrganization.com.