I was recently asked to give my pitch why an advertiser should pick Apartment Finder over our competitors. The right answer surprised me – a savvy marketer should probably NOT choose, but should participate with all.
While there seems to be no equilibrium in the Real Estate portal business, the Multi-Family ILS’s have achieved a mid-term sustainable parity. All of the ILS’s are running fast, changing their sites, changing their lead generation tools and capabilities, changing their SEO and paid marketing strategies we seem to be in a world where we can all play tit-for-tat and rapidly follow each others innovations. The only concrete sustainable point of differentiation that I can see is our un-duplicated audiences (check the link to an old post by Dan McCarthy analyzing the May Comscore data). I’ll try to answer 2 key questions in the remainder of the post; what does this mean for ILS’s and more importantly, what does this mean for Multi-Family marketers.
I think that we in ILS land watch each other pretty carefully. We listen to our advertisers describe new programs that are being introduced, we watch Comscore, Hitwise and Compete for changes in measurable online behavior, we read all of each others white papers, press releases, blog posts and tweets. It is just good business. Moreover, when someone does something smart, we follow the leader. As just a smattering of examples – For Rent took an early lead in video, followed by just about everyone else. Apartment Guide took an early lead in iPhone app development, followed shortly by almost everyone else (we have completed coding on the Apartment Finder app and will be releasing it soon – some very cool features!). Apartment Finder found a great presence on its blog, Facebook and Twitter followed shortly by, well, almost everyone else. We are all in the same playground singing “Anything you can do, I can do better…” The most recent changes at Apartment Guide are steering the pack to (a) simplify their sites around lead generation and (b) become more aggressive with email marketing – we can see the lead impact their changes have had and will all likely be followers.
This is GREAT for advertisers – you want us to try to beat each others brains out with innovative solutions. You want there to be no winner. You want us watching each others every move to copy those things that work. You want us to strive for greater and greater efficiency in deploying your scarce resource of marketing spend. Have faith that we are all highly competitive and will continue this trend for the foreseeable future.
I can tell you that Apartment Finder, when we measure ourselves we watch trends in our leads per advertiser and our cost per lead. All of this competition has driven us to be more and more efficient and effective each year.
So – what should an advertiser do? Well if my assertions seem true (that
we all run in a tight pack where innovation can be rapidly copied) and the Comscore numbers are true (of the roughly 15mm unique visitors that go to the top ILS sites, roughy 11mm of them only go to one of us) your strategy should likely be, “drive down cost and increase breadth of exposure”. It should yield the most unique leads at the lowest possible aggregate cost per lead. The threshold for not advertising with us should likely be a return on marketing measured in expected margin per lease/cost per lease – where you should continue to spend in any vehicle that provides a ROM that is greater than 1 (Marginal Cost < Marginal Revenue). An ideal strategy is to buy everyone’s most basic package at the cheapest rate we will sell it to you – test our upgrades and if they provide enough lead lift/$, great; if not we all understand you know what to do.
This approach flies in the face of some of the approaches that I have recently heard. Most recently one advertiser was trying to reduce their online partners to one or two. While that may make day-to-day operations for the marketing or accounts payable departments a little easier to manage, it ignores the facts that we all reach unique audiences and we all follow similar innovation trends.