Published on Friday, February 25, 2011, 2:52 PM Last Update: 8 hour(s) ago by Craig Proctor
Category: All Articles » Marketing and Farming
You’ve probably heard it said that classified advertising is dead or at least dying.
Major newspapers are suffering a decline in the number of subscribers to the daily print editions. These days, with free lead generation vehicles such as Craigslist so readily available, many agents actually believe it’s criminal to spend money on classified ads, especially when the number of readers is declining. Seems logical, right?
Well don’t count on it. I’m still a big believer in classified advertising as a source of good quality leads, especially for those buyers moving to a market and first time buyers. Why? Because it still works. And it is still the least expensive way to generate leads from people ready to buy real estate now. This is especially true if your major newspaper also posts your classified ad on their website. Now that’s the best of both worlds. Over the years, I’ve found that many people moving to our market not only search online, but either subscribe to the major newspaper or buy it on newsstands. And my classified ads are designed to get those buyers to raise their hands and contact you for more information.
The mistake many agents make is looking at their advertising dollars as a fixed expense of their business like rent, but this is the wrong way to look at it. If you ran a $300 ad and it got you $6,000 in business, did the ad really cost you anything? Of course it didn’t – it actually earned you $5,700 (i.e. $6,000 minus $300). If you hadn’t run the ad, this decision actually would have COST you $5,700.
Similarly, if you ran the same ad on Craigslist and you got $2,500 in business, while this would be great, it still wouldn’t be better than paying to run the $300 ad because the paid ad actually returns you more money every time it runs.
You don’t need to become a financial wizard to do this kind of analysis. It’s really very straightforward. The most important thing is that you’re aware of the implications of what you’re doing so you can make informed and financially profitable decisions about the ads you run.
Of course the only way for you to know whether the money (and time) you spend in any of your marketing is costing or profiting your business is to test, so every classified or Craigslist ad you run must have a direct response component to it so you can measure the results via your hotline and/or website.
You should test not just which ads to run, but also where, which days, how often, etc. You have to look at a number of factors together in order to get a full and accurate picture: media cost, # of responses and quality of responses (i.e. how many of the prospects from this ad actually turn into clients.)
There’s no argument that all of you should be taking advantage of the free lead generators, but that’s definitely not all you should be doing. The nature of these free vehicles is that the leads you will generate will not be as qualified – you’ll have to work harder (spend more time) sifting and qualifying them, so to a certain extent it’s a trade off. The bottom line is that you should be both taking advantage of Craigslist AND investing in classified ads.
Remember, not all ads work all the time in all markets. So testing small is critical to maximizing your returns – both in the free and paid vehicles. When you do invest in paid classifieds, remember to ask each of the publications about remnant space. This is space they otherwise cannot sell and they would rather run your ad with some revenue than run unpaid filler. Take your time and investigate your options and you can profitably generate lots of leads no matter where you run.