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Quality Over Quantity in the Digital Marketing World

Diversifying advertising streams will help make it easier to both expand and refine who is being exposed to your broader campaign.

In the world of digital marketing, particularly in real estate crowdfunding where firms are often trying to get money from many different people, it can be difficult to determine whether quality of targeted ads or quantity of targeted ads will ultimately be more important. Of course, a real estate sponsor would want to make the “best” connections possible, but these sorts of connections—particularly on platforms such as LinkedIn—will often be extremely expensive. They will also want to reach as many different people as possible, but again, if you are hoping to reach a larger audience, you will inevitably end up needing to make larger sacrifices.

Increasing quality (as in, targeting the ads to more qualified people) and increasing quantity of targeted ads will both run up your total marketing budget. Assuming you have limited funds that can be committed to digital marketing, you will eventually need to make a very important decision: do I hope to target people who are most likely to take action? Or do I simply want to engage in the “spaghetti strategy” and throw as many ads against the wall as I can and see what ends up sticking?

In many cases, the battle between quality and quantity will necessitate a very careful balancing act. Diversifying advertising streams—using multiple different social media platforms, for example—will help make it easier to both expand and refine who is being exposed to your broader campaign.

Within the social media space, Facebook ads and LinkedIn ads are often compared to one another. Facebook, still the world’s most used social media platform, presents firms with the potential to reach more than 1 billion different people. LinkedIn, which is has a much more professional, business-oriented audience than Facebook, has an audience that is much smaller, but is also much more serious about doing business. Both platforms can be extremely useful for real estate sponsors wanting to find investors – as well as for individuals wanting to find opportunities to diversify their investments. When all else is equal, LinkedIn ads can cost five times as much as Facebook ads on a per qualified lead basis. If your enterprise, like all enterprises, is dealing with finite resources, you will need to be judicious when making your commitments.

On the margin, should I commit additional digital marketing resources to Facebook or LinkedIn?

Watch Adam Gower discusses the cost of LinkedIn ads with AJ Wilcox of B2Linked:

The challenge of advertising to investors

In real estate syndication, you are not advertising to pixels: you are advertising to people. Ultimately, if you hope for these people to take some sort of tangible action in the future, such as committing funds to a real estate venture, then you will need to know how to effectively speak their language. Real estate is serious business and if your firm is serious about generating results, you will need to do more than simply generate clicks using various “gotcha!” advertising strategies—you will need to know who your target audience is inside and out and know how to generate action.

Whether LinkedIn—the undeniably more expensive platform—is “better” than Facebook will take time to assess because the only true measure of a successful campaign is how much was raised, and that can take a while to determine accurately. That said, there are quite a few reasons to believe that LinkedIn can be more effective in syndicating real estate, even if it carries a heavier price tag. The most important differentiator is, of course, that LinkedIn was specifically designed for people wanting to engage in meaningful business interactions. Naturally, individuals who are considering investing in real estate, at least when compared to the population as a whole, are much more likely to be business inclined. They are on the platform to learn, to find opportunities and are not there to socialize outside of a business context.

That said, the further a firm can define its target audience, the easier it will be for them to decide which social media platforms will be worth their investment, and indeed once that decision has been made, how to best target their ideal audience. They will want to know where prospects live, the types of jobs and incomes they have, their interests, and many other factors. Since LinkedIn does cost more than Facebook per targeted ad, the burden of proof remains on LinkedIn to prove that they can better “link” their advertisers with their target audience than the much more affordable alternative.

When it comes to general products that are bought by a broad audience and where the purchase is actually conducted online as a direct result of the ad, this burden of proof is much easier to reach—a dollar spent on advertising can be shown to yield a very specific return on advertising dollars spent.

But if the target audience is real estate syndicate investors—a group that, realistically, is less than 1 percent of the population—then investing in much more targeted campaigns is vital and yet results are harder to measure because the transaction itself is unlikely to be conducted at the same time as the ad is delivered and certainly not in a direct line of sequential clicks from seeing the ad to making an investment.

What makes raising money online through advertising challenging, therefore, is that while traditional digital marketing measures such as click through rates and other metrics the only thing that really counts in syndication is a conversion – which can only be measured by actual capital raised.  There is little point running a ‘cheaper’ ad campaign on Facebook where click through rates (for example) are very high but that raise no money, when a relatively expensive campaign on LinkedIn where click through rates on their face look low and hence costly, but where the campaign itself raises all the capital you need.

There will always be a tradeoff between quantity and quality. Every firm will want to send highly targeted ads to as many people as they can. But when decisions are made on the margin, as they always are, firms that are in highly specialized, business-oriented spaces (such as real state syndicates) will usually be much better off from choosing quality before all else.

Adam Gower Ph.D., builds digital marketing systems for real estate professionals who want to find more investors so they can raise more money and do more deals. He is known as the creator of the Investor Acquisition System and combines a lifetime of experience in real estate investment and finance with best-of-class digital marketing tactics, techniques, and strategies to help crowdfund real estate syndications.  Find out more by subscribing to his free newsletter, the only one of its kind in the industry that focuses exclusively on real estate crowdfunding.

TAGS: Proptech News
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