November 2017   Volume 43, Number 11      


The End of Facebook for Real Estate?

The traditional U.S. shopping mall business is in need of a significant revamp if it is expected to survive, according to a CBRE report.

The golden era of real estate Facebook advertising, a time when agents could see returns after only spending a few dollars, could be coming to an end. As Facebook competes with giants, such as Google and Zillow Group, for real estate marketing dominance, the social network’s ad prices are increasing.

Its ads may still deliver a high return on investment for a few years to come, as marketing firms and Facebook look for new opportunities to convert social media users into real estate clients. However, increasing advertising costs are shifting the advantage to big spenders over agents with smaller budgets.

In March, marketing guru Gary Vaynerchuk said Facebook video ads are similar to Google search ads in the early 2000s, CNBC reported.

“We are paying $6 to $13 CPM [cost per thousand impressions] on Facebook right now that are going to be $50 to $80 in 36 and 48 months, and everybody is going to be sad that they didn’t jump on it,” he reportedly said.

Facebook’s price per ad more than doubled in 2014 and 2015, according to SEC filings. Price growth then decelerated to only 5 percent in 2017, but has since picked up, increasing 24 percent year over year in the second quarter.

Slowing growth in Facebook’s ad inventory is expected to “play out higher pricing,” Facebook Chief Financial Officer David Wehner said in a recent earnings call.

There is no consensus as to what works best on Facebook. Marketers’ views vary greatly on issues such as ad designs and targeting, with some saying Facebook lead forms aren’t as effective as simply featuring an agent’s contact information.

Facebook is also reviewing its activity for techniques that deliver the best ROI. It wants to adapt those top actions into industry-specific products.

“Our best ideas often come from our clients,” Facebook’s Keith Watts, who oversees projects covering the real estate and financial services industries, recently told Inman. That was the case with Facebook’s first custom product targeted to the real estate industry, “Dynamic Ads for Real Estate.”

The feature is designed for brokerages and listing portals (not individual agents). It allows advertisers to market relevant listings to Facebook users who have previously searched for properties on their website.

“Real estate is an area we’re betting big on as a company,” Watts said. “We think it’s content that consumers want to see ... I think there’s a lot of ways that we can help the industry in general.”

All of this – rising demand for Facebook ads, slowing growth in inventory and the proliferation of real estate-specific products – gives an edge to deep-pocketed real estate brokerages and teams. It is part of a larger trend that is emerging in the digital real estate marketing industry, epitomized by Zillow Group’s decision to focus on “super agents” (teams who spend at least $60,000 annually) and phase out sales to smaller spenders.

[return to top]





In this issue:

The 5 Hottest Hipster Real Estate Markets Across America

Could DACA Repeal Impact Real Estate?

Houston Rethinks Real Estate Development After Harvey

Hurricane Irma Not Likely to Affect Florida Real Estate Prices

NAR Forced MLS Membership Up for Review

REIT Investors Look to Alternative Property Sectors for Bigger Returns

Berkshire’s HomeServices of America Acquires Long & Foster

Harvey Victims Facing Temporary Housing Shortage in Houston

Malls Need New Business Model Says CBRE Report

The End of Facebook for Real Estate?


The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher's permission. All rights reserved. ©2017 The Insurance 411. Tel. 877-762-7877. theinsurance411.com