Why We Stopped Advertising on Google & Zillow

Filed in Google, PPC Advertising, Small Biz Marketing by Matt McGee on February 24, 2019 0 Comments

My wife had her best year ever as a real estate agent in 2018. Most transactions completed. Most dollar value sold. Most commission income. It was a great year by almost all of the metrics that a real estate agent measures.

But we didn’t have our best year ever in the one metric that means more than anything: net business profit.

In order to have such a great year, we had to spend a lot of money. Some of that was the necessity of changing the business name, forming a real estate team and doing a big branding push to get mindshare and familiarity. And to a large degree, we feel that was successful.

But there were also a lot of expenses that maybe we didn’t need to spend. I say “maybe” because we’re gonna find out in 2019 whether that’s true or not.

We’ve stopped spending on Zillow ads and Google ads.

Why? Have a look at this chart that I put together for our year-in-review deck.

What it shows is that 83 percent of the leads we generated last year were from paid sources. But only 7 percent of our transactions came from paid sources. In other words, we spent a lot of money generating leads and very few of them turned into revenue-generating clients.

The vast majority of our lead gen expenses was spent on Zillow; it’s insanely expensive to advertise there and frankly, most of the leads were bad. So we stopped advertising there in December.

We stopped our Google advertising last summer for what I expected would only be a couple months. But that turned into “for the rest of the year” and now I’m not seeing any reason to start again.

I’m not saying paid lead gen is bad; we’re still advertising via other channels and acquiring new leads. It’s just that we’re spending a lot less to do it, while getting essentially the same quality of lead (i.e., not great).

That’s been the biggest takeaway for me in the 18 months or so since I changed careers and began working as my wife’s Chief Marketing Officer — in this industry, SEO and PPC are dwarfed in importance by the three Rs: relationships, referrals and reviews. As we adjust our expenses in 2019, that’s where our focus will be.

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