Quick Changes, Big Results: Compelling Classified Advertising
Sat, Dec 20, 2014Let me ask you a question: Would you like to have a sleek arsenal of high-performing ads that convert your ideal leads into paying customers?
Okay, that’s kind of a no-brainer. Who wouldn’t want ads like that?
But most agents don’t have ads like these, and that’s because they’re looking at advertising in completely the wrong way. They see advertising dollars as a fixed expense like rent — a certain amount they must pay day in and day out — and blindly throw money at the ad monster, hoping it will bring them some leads in return. But when they instead look at advertising dollars as a strategy game, the results change entirely.
Advertising as an Investment
When you’re looking at advertising as a fixed monthly expense, it’s natural to want to lower that expense in order to maximize profits. That’s what causes so many agents to pull classified ads in favor of running free online ads on sites like Craigslist. That may or may not be a wise move. More important than what an ad costs is what it earns you.
I want you to start looking at advertising dollars as a vehicle to make money, instead of a cost that should be reduced. Think of advertising as an investment. And as with any investment, it’s important to determine what your return will look like as you plan out your portfolio.
What “Free” Can Actually Cost You
I know this is a perplexing statement, so let me explain with two scenarios:
- You run a standard ad on Craigslist, for free. Over a month, you bring in $3,000 in commission from people who contacted you through Craigslist. Total profit: $3,000
- You run a carefully planned classified ad in your local paper at a cost of $500 per month. Over that month, you bring in $7,000 in commission from people who saw your ad and called you. Total profit: $6,500 ($7,000 commission - $500 cost)
If your goal is to keep advertising costs down, you will go with Scenario 1 every time. But when you consider advertising as an investment, you’ll see that Scenario 2 is the better option. You had to grease the wheels by paying $500, but that money allowed you to reach a targeted audience of people ready to buy — which made you $3,500 more than free Craigslist ads.
In reality, running the free online ad would actually cost you $3,500 at the end of the month.
How to Play the Strategy Game
In understanding this new logic, how exactly will you achieve the scenario I mentioned at the start of this blog post? How do you create that high-performing arsenal of ads?
The key here is testing. You need to be consistently evaluating the performance of each ad you are running to see which is bringing in the most leads. To do this, each ad you run must be trackable by having a direct response component to it so your hotline and/or website can measure results for you.
For each ad you run, note things like media cost, number of responses, and quality of responses. This will allow you to calculate cost per lead and the cost to obtain each client.
Once you have these numbers, you prune as you would any investment. You ditch the ads that are not bringing in high-quality leads and high profits, and add more of the type of ads that are performing well. Over time, you’ll find your sweet spot and discover the ratio of ad types that work best for you.
Bottom line: be smart with your ads. There is no “right” strategy and every agent will see different results. Who knows, you may be killing it on Craigslist and want to invest all your attention there! Keep an open mind and incorporate a system of proper tracking and testing so that you can make strategic decisions instead of uninformed assumptions.
“Open your mind to a different way. You'll notice an immediate change in your business as you begin to implement Craig Proctor’s systems and then one day you can't believe how you did business without them!” – Doug James and Melissa Hatfield, The Wise Listing System Team, Greenwood Village, Colorado
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