Social media marketing holds special appeal to the real estate industry. Agents and brokers spend twice as much on social media tools and outside assistance as the average local advertiser, according to Borrell.
Eighty-seven percent of agents and brokers have a social media presence, and of that group, nearly seven out of 10 have “boosted” a post, meaning they have paid to promote a post on their Facebook business page.
In addition, nearly six out of 10 agents with a social media presence purchased targeted social media advertising. This involves paying to promote an ad to a specified audience, such as likely first-time homebuyers, but doesn’t require posting on a business page.
The attraction stems largely from Facebook’s sophisticated ad-targeting capabilities, which allow agents to target ads by categories such as “likely to move” and “first-time buyers.”
“When you consider that Facebook and Instagram can also deliver ads to users by ZIP code and household income, it’s easy to understand the allure to agents and brokers,” the report said.
Adoption versus spending
Superior adoption of social media advertising does not necessarily mean that agents are collectively spending more on social media than on listing portals. Nor does it mean that total advertising spending on listing portals has diminished.
In fact, the advertising business of Zillow Group and realtor.com has grown rapidly in recent years, Borrell notes.
Since Borrell expects agents to spend a total of $2.559 billion on “targeted display” advertising this year — that includes listing portal ads and virtually all social media ads in Borrell’s book — Zillow Group and realtor.com’s collective revenue of $1.5 billion (most of which comes from targeted display ads) suggests that listing portals still receive more agent advertising dollars than social media sites.
It’s also worth keeping in mind that listing portal advertisers appear to spend more generously compared to Facebook advertisers.
Zillow Group advertisers were on pace to spend nearly $6,000 annually for leads from the listing portal in May 2016, the last time Zillow Group reported average advertising spending. Its revenue has grown substantially since then, as the company has focused on selling to deep-pocketed “super agents” while phasing out smaller customers.
By contrast, agents and brokers who buy social media ads spend just under $5,000 on average, according to Borrell’s survey.
Agents are the online marketing early birds
Real estate agents have embraced digital marketing more than perhaps any other type of professional. Of the total ad spending by agents and brokers this year, 87.1 percent is expected to go towards online marketing, up from 84.9 percent in 2016.
In fact, real estate agents and brokers are “the first and, so far, only big advertising category where digital expenditures aren’t continuing in an upward spiral,” Borrell reported.
Spending by agents on digital advertising peaked nearly three years ago and has been flat or slightly down since then, according to the research firm.
Real estate agents and brokers’ total ad spending — on both digital and print advertising — followed the same trajectory, dropping 8.5 percent from 2015 to 2016 to $9.87 billion.
The trend is expected to reverse this year, with Borrell Associates projecting a spending increase of 6.2 percent to $10.48 billion in 2017.
While the report highlights social media momentum, email marketing accounts for the largest share of spending by agents and brokers. Borrell expects them to dish out $3.59 billion on the medium in 2017.
Email marketing spending includes that which is allocated to email marketing systems, such as Constant Contact, as well as agencies that handle email marketing on behalf of agents and brokers.
Targeted display advertising — which Borrell anticipates will grow the most in the coming years — was runner-up among marketing spending categories, projected to account for $2.56 billion in spending in 2017. It covers both social media ads and all listing portal ads other than paid listing promotion. (Most paid listing portal ads are for buyer’s agents, while placing listings on portals is generally free for agents.)
The increase in marketing spending by agents and brokers will be driven almost exclusively by investment in digital advertising channels — social media chief among them, according to Borrell.
Over half (53 percent) of agents and brokers buy social media ads already, Borrell found. The marketing medium trailed only postal mail (77 percent) and newspaper (66 percent), while outranking magazine (48 percent), email marketing (36 percent), search engine marketing (34 percent), display ads (21 percent) and online classified ads (15 percent).