Maximize Your Success: What’s PPC ROAS in Real Estate?

Getting your real estate business noticed amongst the sea of other real estate enterprises with a strong SEO strategy is challenging.

While SEO is one of the most successful inbound marketing strategies, it requires continuous efforts and consistent learning of how the search algorithm works. It takes longer to show results.

For instance, if your SEO strategy takes at least 6-12 months to start showing results, it takes PPC only about 24 hours to begin making its mark.

In this guide, we’ll discuss the cost of real estate PPC in 2023, the average cost per lead, the cost of Google ads, factors that affect the pricing, and how much you should spend on PPC campaigns.

And how UpInFifty can help you with PPC marketing.  

What is real estate PPC?

PPC, or pay-per-click, is an advertising model in which advertisers pay a fee each time their ad is clicked. 

Let’s say you want to attract new customers or promote your property listings and need to organically get visitors to your website; you pay a certain amount to increase your visibility on search engines by advertising your offer. 

Let’s take an example to understand PPC campaigns better.

Say, you are a real estate agent working in a competitive housing market. You have a new listing for a beautiful three-bedroom house in a desirable neighborhood. To attract potential buyers and generate leads, you launch a PPC campaign for Google (there are others, too – like social media PPC ads). You may beat competitors who might not be as careful with their ad spend by minimizing your PPC campaigns to get a higher ROAS. This gives you a hand in drawing in and maintaining clients.

You define your target audience based on the location, demographics, etc., and create a compelling ad. Next, your research and select relevant keywords that potential buyers might use when searching for homes in your area. For example, “real estate agent in New Jersey” or “3 bedroom house for sale in New Jersey.”

To be at the top of the search results, you enter into an auction for the chosen keywords, indicating the maximum amount you’re willing to pay per click. The more competitive the keyword, the higher the cost-per-click (CPC) may be.

Each time someone clicks on your ad and goes to your website, you pay a certain charge based on your bid, quality score, ad rank, and others. 

Why invest in PPC over SEO as a real estate marketing strategy? 

One of the primary reasons is stiff competition from real estate giants like Realtor.com, Zillow, Trulia, Redfin, and others. 

We entered the query “Buy home in New Jersey” on Google and let’s see what appeared at the top of organic search results.

It’s the real estate giants at the top of the list. In such a situation, by the time your SEO efforts start taking your rank up the search results organically, you can start driving traffic with the help of PPC campaigns.

How much does real estate PPC cost in 2024?

An average small to medium-sized company that wants to generate good quality leads from PPC advertising spends about $9,500-$10,500. However, it depends on your budget.

Let’s see a basic breakdown of the costs involved:

Metric	Average Cost
Cost-per-click (CPC)	$2.59/ click
Cost-per-mille (CPM)	$3.12/ impressions
Remarketing	$0.66-$1.23/ click
PPC Management: Tools	$15-$800/ month
PPC Management: Services	$350-$5000/ month or 12-30% of ad spend
PPC Management: Ad Spend	$300-$100 Million+/ month

Want to compare the real estate PPC cost with SEO? Check out our guide on real estate SEO cost and get the complete cost breakdown.

What is the CPC for different PPC Channels?

Once you know about PPC, the most common question is: Where should I advertise, and what’s the cost-per-click for these channels?

There are a lot of channels where you can advertise, but the most popular ones are:

• Google Ads 
• Microsoft Ads
• Facebook Ads
• Remarketing Ads

Channel	Average cost-per-click
Google Ads	$1-$2 or more
Google Display Network (GDN)	<$1
Google Search Network (GSN)	$1-$2
Microsoft Advertising	$1.54
Facebook Ads	$0.44
Remarketing Ads	$0.66-$1.23

What is the average cost per lead in real estate?

According to the FirstPageSage study, the average cost per lead in the real estate sector is $480. 

As per the data provided by WordStream, the average cost per lead from Google Ads is $66.02.

Here’s how to calculate your average lead cost in your real estate business:

Total Marketing Cost / Number of Leads Generated = CPL

For example, if you spend $2000 on your ads and you generate 100 leads, your CPL is:

2000/100 = 20

Your cost per lead is $20.

How much does Google Ads cost in 2023?

On average, small-sized real estate businesses spend $1000-$2000 on Google Ads. Mid-sized real estate companies spend as much as $7000-$30,000 on Google Ads.

It’s important to know how much it would cost to opt for Google ads for your marketing strategy. Let’sLet’s see the average ad spend based on the real estate business size.

Real estate giants, like Zillow, spend millions. According to Adbeat, Zillow spent about $11.6 million in 6 months on Google ads. 

But, what’s critical to note here is that it’s very difficult to give a specific figure since Google ad costs depend on a lot of factors like:

1. Industry competition

Certain legal and real estate industries are highly competitive with equally competitive keywords. It increases the CPC and hence your overall Google ad spend.

2. Market trend

You may incur increased costs in highly competitive real estate markets due to bidding wars for ad placements. Seasonal fluctuations, like peak buying or selling seasons, can also drive up costs as demand for advertising rises. Economic factors, such as market growth or downturns, can also influence ad spend. 

3. Customer Lifecycle

Real estate requires people to make major decisions, and they won’t be buying with just a single visit to your website. Here, the customer lifecycle will require them to make multiple visits to your website before taking the final step, where you can see a conversion that pays off your ad spend.

4. Ad Management

One essential factor that affects the Google ad cost is – how well you manage your account. Posting an ad is followed by continuous optimization to see how well your ad performs. 

You’re wasting your money if your ad isn’t bringing in new leads. If it’s performing well, you need to scale the ad to leverage it. You must maintain your keyword list and proper Google ad account structure.

Understanding PPC ROAS in Real Estate

The Return on Ad Spend (ROAS) for Pay-Per-Click (PPC) advertising and marketing is a critical indicator that quantifies the sales produced for each dollar invested. Information PPC ROAS in real estate helps businesses and agents evaluate how well their online advertising strategies are working.

Groups may compare their performance to industry standards by being aware of the typical PPC ROAS in real estate. In order to maximize advertising expenses, a marketing strategy with a greater ROAS is likely to be profitable. By being aware of your PPC ROAS average real estate, you can keep your costs associated with acquiring new customers low and allocate more funds to client growth and loyalty. Your company becomes more aggressive by offering lower pricing and better returns.

How to calculate the conversion rate in a PPC campaign for the real estate industry?

In a PPC campaign, the conversion rate is the percentage of ad clicks that result in a desired action or conversion on your website or landing page.

This desired action can vary based on the goals of your campaign, such as making a purchase, filling out a form, inquiring about a listing, or leaving their contact information.

The formula to calculate the conversion rate is:

Conversion Rate = (Number of Conversions / Number of Clicks or impressions) x 100

For example, if your ad receives 500 clicks and generates 25 conversions, the conversion rate would be:

(Number of sale conversions/number of leads)*100 = (25 / 500) x 100 = 5%

A higher conversion rate indicates that a larger percentage of people who clicked on your ad completed the desired action, which is generally a positive outcome for your campaign. 

A low conversion rate may indicate that your ad, landing page, or targeting needs improvement, and you may need to optimize your campaign to increase conversions.

The average conversion rate for real estate businesses is 1.7%.

Important: Your website design and UX play an important role in improving the conversion rate. Learn how much it cost to build a conversion-optimized real estate website.

Calculating PPC ROAS for Real Estate Campaigns:

Divide the sales from PPC ads by the total cost of the advertising to determine PPC ROAS. For example, your ROAS is 5:1 if you spend $1,000 on PPC advertisements and make $5,000 in revenue.

Benefits of Monitoring PPC ROAS in Real Estate:

You may find high-performing ads, improve poor ones, and more effectively manage your budget by constantly monitoring your PPC ROAS. Higher ROI and more successful advertising and marketing campaigns are the results of this. A high PPC ROAS average real estate indicates that your ads are converting qualified leads into clients, which is important when promoting real estate offers online. It also enables you to reach an agreement with potential clients who view your company as environmentally conscious and results-oriented.

Optimizing PPC Campaigns for Better ROAS in Real Estate:

Focusing on the appropriate target market, using relevant phrases, and increasing attractive ad reproduction are the three main ways to improve your PPC Campaigns for Better ROAS in Real Estate Improving the results on your efforts through regular review and optimization can also help. While ROAS might vary based on the market and marketing strategy, real estate companies often strive for a ROAS of 3:1 or above. With this strategy, at least $3 is produced for every $1 spent on PPC advertisements.

How PPC ROAS Impacts Your Real Estate Marketing Strategy:

A strong PPC ROAS enables you to reinvest earnings into other advertising campaigns, increasing your reach and drawing in more clients. It also provides information on which advertising strategies work best for your business. By examining PPC ROAS data, you may determine which services your audience finds most appealing. Then, you may modify your products to more successfully meet the needs of your customers, boosting satisfaction and revenue.

Challenges in Achieving High PPC ROAS in Real Estate:

A number of factors, including competition in the market, keyword costs, and ad fatigue, might affect your PPC ROAS average real estate. It need continuous optimization and modification to change market conditions in order to overcome such difficult circumstances. You may improve your online sales strategy and increase the appeal of your real estate products to qualified buyers by focusing on increasing your PPC ROAS. This no longer just increases sales but also establishes your company as a leader in the field.

What factors determine the cost per click?

Whenever someone comes across your ad when they search a query and click on it, the search engine or the platform you’ve used for advertising charges you a fee called cost-per-click.

The CPC rate depends on a lot of factors.

1. Advertiser Bid

The primary factor is your bidding value. Advertisers compete against each other to secure ad placements. 

The higher your bid amount, the better your chance to have your ad displayed. Your CPC will be higher if the platform gives you a higher position in the search results.

2. Quality Score

Search engines and advertising platforms consider the quality and relevance of ads when determining their placement and CPC.

The quality score of your ad depends on the following:

• The click-through-rate
• Relevance of the keywords used and ad text
• Quality and relevance of your landing page
• Your Google Ad account performance

Here, the CTR is one of the most important parameters. When people who see your ad click on it, it strongly indicates to the search engine that it is relevant and provides value.

Your ad gets higher placement and is charged lower costs when you have a higher quality score.

1. Ad Rank

What if two ads have the same quality score?

In such a situation, you must pay a higher CPC to rank higher in ad placement. This increases your visibility and improves your chance of conversions.  

2. Campaign Age

As your campaign runs longer, you can optimize and improve its quality score, decreasing costs. Maintaining a consistently high PPC ROAS average real estate helps ensure that your marketing efforts are valuable and viable over time, which in turn adds to the long-term success of your real estate firm.

For example, a newly launched campaign may have a higher CPC initially, but over time, as you gather data and refine targeting, the CPC may decrease.

3. Keyword Competition

Google Ads functions like an auction, where advertisers bid on keywords. When multiple advertisers bid for the same keyword, the competition increases, increasing the CPC. 

For example, if you are in a highly competitive industry, the CPC for popular keywords may be higher due to increased bidding activity.

4. Website Quality

The amount of time visitors spend on your website, the bounce rate, and the loading time are all factors that signify the quality of your website. 

High-quality landing pages relevant to your keywords can contribute to a higher quality score. This, in turn, can result in lower CPC rates. 

If you have a well-designed landing page with engaging content and a clear call-to-action, search engines may view it as valuable to users, leading to a better quality score and potentially lower CPC.

5. Location

Costs can vary based on your target location and whether you target buyers or sellers. 

Suppose you are targeting a specific geographical region with a high demand for your products or services. In that case, the CPC may be higher due to increased competition from other advertisers targeting the same location. 

The CPC may be lower if you target a less competitive or less populated area. 

The type of audience you target, such as buyers or sellers, can affect the CPC rate. For example, if you are targeting buyers in a specific location, the CPC may be different compared to targeting sellers in the same location.

How much should I spend on PPC ads in real estate?

Even if you know all about real estate PPC advertising, determining your ad spend takes a lot of work. 

How much of the advertising budget should I spend on PPC campaigns?

There are a few things you should know about before you can determine your budget:

• What is the overall ad budget, and how much will you spend on PPC?
• What is the current conversion rate, and how much do you want the value to increase?
• How many new leads do you need monthly to ensure a certain amount in sales?
• How much can you spend on a lead, that is, what should your CPL be?

Once these figures are clearer, we can determine the PPC budget.

An example:

Let’s say you aim to acquire 150 new clients in a month, and your close rate is 10%. To achieve this, you would require a monthly PPC lead goal of 1,500 conversions, considering that 10% of them would convert into 150 leads. 

Assuming your cost per lead is $20, you would need a monthly budget of $30,000 to generate the desired number of leads and clients. This amounts to approximately $1,000 per day.

You will always have to account for variable factors like keyword competition, the maximum bid value, location, campaign, website quality, etc.

How does UpInFifty help you increase real estate conversion rates and lower your PPC cost?

Real estate agents, brokers, and companies often hesitate to hire a PPC management agency as that would increase the PPC budget.

But the advantages of hiring our services outweigh the cons of spending more on PPC management.

1. PPC Expertise at your service

Our marketing team at UpInFifty is an expert at designing PPC campaigns and excels at making the best of your budget. We experiment with strategies all the time, making sure that we apply only the ones that are sure to get you results.

We have designers and copywriters who know how to write click-able copies, include relevant keywords, and increase the rate of your conversions and, consequently, your sales.

Your landing page design and optimization will matter the most in improving your Google quality score. We structure your website design in a way that can generate more leads and improve the quality score.

2. We save you time and money

We know it sounds contradictory. How can we save you money when you have to spend money on paying us for PPC management?

Firstly, PPC requires you to monitor how the search engine algorithm works continuously. The UpInFifty team does that for you. We take the load off your shoulders and handle the extensive management.

Also, you need to monitor your ad’s performance and consistently optimize it to make it perform better. If you were to do that on your own, it would probably leave you no time to manage your real estate business.

You need to track and optimize ad performance to save money on ads that bring no leads and conversions.

We help you save money by making the most of your ad spend and ensuring you achieve your real estate goals. We help you save time so you can do what you do best – manage your real estate business.

Final Thoughts

Real estate is a competitive industry, and PPC advertising is complicated. People believe that PPC ads do not serve the purpose of increasing conversions and sales, and opting for that ad channel is like throwing money down the drain.

But that’s not the case. PPC ads help you put your business out in front of the world. And we help you do just that!

Contact us for a one-on-one session to understand how real estate PPC advertising can help you grow your business and how we can help you manage it better.