The cost of PPC
When deciding to start pay-per-click (PPC) advertising, one often considers the cost of running ads and what to expect from those ads.
As experienced PPC service providers, “how much will PPC cost me?” is the number one question we get asked by our clients. Unfortunately, the answer’s not so simple.
How Does PPC Work?
Before we get into how much PPC will cost, it’s important to understand how PPC works.
PPC ads are displayed on search result pages, Facebook feeds, or on websites that partner with PPC advertising platforms. These ads don’t show up all the time though, only to users who search for or show interest in your service.
Unlike traditional marketing where you’re paying for airtime or ad space, PPC advertisers only pay when someone clicks their ad. And it’s important to note: while you may ultimately generate leads from those clicks, you’re not actually paying for leads—you’re paying for clicks.
So, when we’re thinking about the cost of PPC for real estate, what we really want to know is: how much will a click cost and how many of those clicks will convert into leads. By answering those two questions, you can answer the bigger question of how much each lead will cost.
How Much Will a Click Cost?
The cost of a click on PPC advertising platforms like Google, Bing, and Facebook is determined by three main factors:
The relevance of your website to the keywords you’re targeting
The quality of your campaign
Across industries, click costs can range anywhere from $0.10 to $20.00 or more, while real estate PPC campaigns tend to see click costs between $0.50 and $4.00.
This wide cost range demonstrates that without proper management and expertise, click costs can quickly spiral out of control. So how do we manage those costs?
An experienced PPC manager can monitor ad position and set bid limits to ensure that the strongest position is maintained for the best price. In addition, they can create compelling ads and ad extensions with high click through rates. This contributes to higher quality campaign.
Lastly, an experienced manager can suggest changes to your landing pages to make your website relevant to targeted keywords.
With smart management and the right campaign settings a cost per click between $0.50 and $2.00 can be expected.
How Many Leads Will Be Generated?
When determining how many leads your campaign will capture, we have to consider the conversion rate.
The conversion rate is the percentage of clicks that complete a valuable action on your website. This could be filling out a contact form, registering on your website, or submitting a listing inquiry.
At REW, we see conversion rates range from 3-20%. However, the average conversion rate is around 6-7% after your campaign has been fully optimized.
Like the cost per click, the conversion rate can be affected by a variety of on-site and external factors. These factors include:
Your website’s functionality
The competition in your market
Seasonal market fluctuations, and more.
This means that even campaigns within the same market can experience wildly different lead counts. As real estate focused PPC advertisers, we know how to optimize your campaign and website for the highest possible conversion rate.
How Much Will Leads Cost?
Ultimately, the cost per lead is affected by your campaign’s conversion rate and cost per click.
As mentioned above, these are two factors that are difficult to predict. This means that it would be irresponsible for any PPC specialist to guarantee a certain cost per lead.
Over the past year, the average cost per lead for Real Estate Webmasters’ PPC clients has been an average of $20.00. This of course varies widely depending on your market.
In large, highly saturated markets, a cost per lead from $20-$35 can be expected. With small to mid-size markets where there are fewer advertisers, we typically see a cost per lead range of $5-$15.
To summarize, without first running your campaign, we won’t know your campaign’s cost per click, cost per lead, or conversion rate. We do know that you will never spend more than your campaign’s maximum daily budget. Not sure what you want your budget to be? We recommend at least $600/month for most markets but it’s advisable to spend as much as you can.
As with all forms of marketing, PPC advertising can be unpredictable. This is why it’s important to have a skilled PPC manager who’s able to properly run your campaign. As Google certified partners working exclusively for real estate professionals, we’ll be able to manage using latest techniques to ensure the lowest possible cost per lead.