A Manhattan real estate brokerage is taking the guessing game out of marketing with the creation of a system that tracks responses to online and offline ads.
The system, launched last year by Coldwell Banker Hunt Kennedy, a brokerage with about 300 agents and $1 billion in annual sales, uses a pool of unique phone numbers to track the telephone responses to a range of advertising sources, and also tracks Internet responses to ads.
That information is helping the company and individual agents to identify what works and doesn’t work in drumming up business, and it is also useful in describing to clients how the company is marketing their for-sale properties.
As the real estate industry shifts more of its marketing dollars toward online advertising and looks for ways to accurately gauge return on investment, the brokerage company is seeking to quantify the successes and failures of various forms of online and offline advertising. The data is helping the company streamline its marketing strategies.
David Michonski, CEO for the brokerage, said the company has invested about $250,000 in the patent-pending technology. The system includes software that automatically logs each phone call generated from an ad — the company has about 5,000 numbers. Calls are then routed to agents.
“From our point of view we at least know what’s working and what isn’t working,” Michonski said. “It’s helping everybody to make better decisions. What I’m doing is holding the agent more accountable — you spent ‘X’ dollars last week and got ‘X’ number of calls.”
The brokerage is looking into joint ventures to expand the use of the technology. “I think it will be very helpful for others,” he said, adding that he has demonstrated the system to Google representatives.
“It allows (agents) to really see where they should be spending their money. We view this as an educational tool.”
Michonski cited the example of a printed real estate guide that had a high rate of responses and a long shelf life, generating calls well after the original publishing date. The company decided to expand its use of the publication based on this proven success, he said. Likewise, the company may decide to cut back on another publication, which generated about 60 responses at a cost of about $100,000 in advertising, because it costs more per response than other ad sources.
In a month, the company will have a year’s worth of data and will be able to begin comparing monthly totals for 2006 versus monthly totals for 2005. “When we start having year-over-year data we can slice and dice it more to produce more reports. That is very valuable data,” Michonski said.
Already, the system has shown that the response rate to Internet ads is higher than with the company’s print ads. “It’s staggering. Ad response to Internet (ads) is more than double what it is from print,” he said. “The Internet is the place to be.” Also, the system found that the company’s print ads tend to be far more costly than the company’s Internet ads.
Response rates to advertising are likely affected by changing market conditions, and the company’s data may reflect these changes, Michonski noted.
Information from the company’s ad-tracking system can be automatically plugged into reports that agents prepare for their clients. These reports give a rundown on all of the advertising media used to sell the home, as well as the responses to those ads.
While the average age of sellers is about 56 years old, the average buyer is about 20 years younger and is more likely to see ads on the Internet, Michonski said. “You’ve got to put (ads) on the Internet. What I see is a massive reallocation of our resources.”
The system does not collect callers’ phone numbers. “We are trying to get information and also maintain the privacy of people calling up. We are not calling them back at home,” he said.
Read the Inman News special report, “Web Lead ROI Secrets: Measuring Success on the Web.”
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