(Article in Inman News notice quotes about
CondoBuzz.com)
Real estate digs deeper to harvest
online leads
Part 1: Search engines rev up for local realty results
Monday, December 06, 2004
By Glenn Roberts Jr.
Inman News
Editor's note: With more consumers starting their home search
on the Internet, online lead generation and management has morphed
into a sophisticated business as agents, brokers and real estate
companies scramble to adopt the new channel. This three-part series
examines the changing nature of online lead generation as local
Internet search becomes more relevant, more brokers get involved
in lead systems, and more technologies emerge.
Enough talk about the Internet as a tool for global information
exchange – that is so 1990s. These days it's all about going
local – consumers who are searching online for local goods
and services and the businesses who want to be the first to greet
them.
Search engines are driving to connect these consumers and businesses
while remaining relevant as information on-ramps. And the success
is measurable by the billions. Links that are paid for by advertisers
and show up in search results pages as sponsored links –
will account for an estimated 42 percent of the total online ad
revenue this year, or about $3.9 billion of the projected $9.4
billion total, according to eMarketer,
a company that tracks online marketing statistics. By 2008, eMarketer
predicts that total U.S. online ad spending will nearly double
to $17.5 billion. And experts say local search is quickly gaining
in popularity, growing about 50 percent faster than general search.
EMarketer reported that there are 121 million searchers in America
who conduct an average of 35 searches per month. Also, about 95
million Americans buy online and 115 million use the Internet
to shop and browse products. The company also reported that consumers
who researched and compared products online drove $180.7 billion
in offline spending and $106.5 billion in direct online spending.
Online leads generated at search-engine sites can be an important
source of future business, and real estate companies and professionals
are climbing aboard in growing numbers.
Real estate is a perfect fit for the surge in local and regional
searches, said Jim Delli-Santi, a product director for Overture,
a Yahoo! company that offers marketing services and products to
help businesses connect with consumers online. "If a person
searches for real estate, it implies locality," he said.
"Buying a home is implicitly a local shopping intent, and
we're seeing that reflected in the amount of advertisers we see
in our database and in the amount of searches they see."
Real estate and real estate professionals is a consistently higher-performing
advertising category than many other areas in terms of the click-through
rates, number of advertisers and the number of searches, Delli-Santi
said.
Overture offers one product that allows businesses to buy an ad
that is displayed when a specific word or term is entered in a
search. Another product offers the opportunity for the sponsored
link to be displayed when the search topic is within a half mile
to 30 miles of the business. Overture also offers a training program
that helps get business professionals up to speed on local-search
advertising.
"Real estate professionals are experimenting with a lot of
different lead-generation strategies. It is important to get educated
and try it out and see how it works," he said.
Greg Sterling, program director with The Kelsey Group, a research
company that monitors yellow pages companies, electronic directories
and local media, said that real estate professionals' online advertising
is fueled by the knowledge that many consumers use the Internet
to search for homes.
"There's a bunch of research about how consumer behavior
is really driving Realtor adoption of the Internet as a marketing
tool. This is a microcosm of a larger trend," he said. The
vast majority of buying and selling happens within a 50-mile radius
of where a consumer lives, Sterling said, and consumer behavior
is behind the push for local search. "Consumers have driven
the agents online. A lot of agents would like to ignore the complexity
of the Internet but they can't – they can't afford to."
The Kelsey Group conducted a recent survey with Bizrate.com of
about 3,900 online consumers. About 74 percent of participants
had conducted local searches on the Internet, and 27 percent of
their searches were local in nature, according to the study.
While local searches are becoming more popular, many small businesses
are still somewhat confused about how to reach this online audience.
Sterling said a telephone survey of small businesses, conducted
in August, found that about 75 percent of respondents had some
degree of confusion about Internet marketing. And experts generally
agree that local companies may benefit by building up their Web
presence as they look to increase their spending on locally focused
online advertising.
"What we have is a gap between the growing demand among local
businesses for exposure on the Internet and a confusion or lack
of understanding about the best way to do that," Sterling
said. Web advertising has complicated the overall marketing picture
for real estate professionals, adding another layer to the business
of being seen, he said.
While there is a big online buzz about paid-search advertising
these days, eMarketer reported that its leaps-and-bounds growth
will slow within the next four years, to 11.5 percent annually
by 2008.
Behavioral targeting and contextual targeting, which place ads
based on Web-users' search behavior and individual Web site content,
and local-search advertising, meanwhile, are expected to grow
dramatically. Spending on behavioral targeting will rise an estimated
50 percent, from $627 million in 2004 to $934 million in 2005,
eMarketer reported, while the Kelsey Group estimates that local
online advertising will grow from $1 billion in 2003 to $2.5 billion
by 2008.
In addition to pay-per-click advertising at search sites, which
has a cost formula that is based at least partly on the number
of clicks by consumers on paid links, there are also companies
that have developed pay-per-call technologies that base the cost
of advertising on the number of consumer phone calls to the advertiser.
Ingenio is one company in this arena.
Randy Kempenich, founder of CondoBuzz.com, a national network
of Web sites formed focusing on condos, lofts and town homes,
said his company's marketing plan is focused entirely on paid-search.
"We market mainly with Google and Overture," Kempenich
said. The company purchases sponsored links based on specific
keyword searches.
"It's all about paid placement now. That's all we're doing
is paying for placement. The only people who are going to show
up on the top of search engine results are going to be people
like us," he said. In Kempenich's experience, he said consumers
seem to prefer Web sites that appear to be neutral ground, and
so he deemphasizes individual agents in the Web network. He said
his company's model will have "a high lead-capture (rate)
because of our focus and niche marketing.”
Many companies have sprung up that promise to increase the "optimization"
of Web sites, or to improve the search-page ranking of unpaid
links or sponsored links. The search engines regularly change
their algorithms, or search formulas, though. "
David Hallerman, a senior analyst at eMarketer, said he hasn't
seen any solid statistics on the amount of money and time companies
are spending to boost their link rankings on search sites. He
said search-engines often provide few details of changes to search
algorithms that can impact the rank of natural, or unpaid links.
"They do change that. That's their trade secret. They don't
tell you exactly what the changes are. It puts a little more burden
on the Web site trying to improve its search-engine optimization."
Hallerman said that search engines are beginning to partner more
with yellow pages sites.
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Google is the most popular search engine among consumers, according
to a study by the Pew Internet & American Life Project conducted
this year. About 47 percent of a group of about 1,400 Internet
users said they most often use Google in searches, followed by
Yahoo! with 26 percent, MSN with 7 percent, and AOL with 5 percent.
Hallerman said Google has about 50 percent of the paid-search
market at this point, and Yahoo!/Overture has about 35 percent.
Google offers a paid-search product called AdWords that bases
sponsored-ad rankings on click-through rates and a maximum cost-per-click
amount, so that "the most relevant ads rise to the top"
of the paid search results.
Microsoft is working on a beta version of a new search engine
that features local search capabilities, and Hallerman said it
will be interesting to watch how that effort develops.
A Microsoft spokesman said that the company has redesigned its
search results "to ensure people clearly understand which
results are advertisements," and all links paid for by advertisers
are displayed in shaded boxes "that clearly identify them
with a 'sponsored sites' heading."
Another development, said Hallerman, is a move by search engines
to become a fixture on the screens of PCs. Yahoo! and Google now
offer thin, streamlined search toolbars that can be used to conduct
searches even when the computer's browser software is not open.
