Does It Pay to Buy Online Leads?

Guest contributor G.M. Filisko of REALTOR®Mag says:

Why I Do.

I generate hundreds of leads each month for my seven sales associates from my company's 12 Web sites. My primary focus is my main site, www.regentpg.com. I require consumers to register after they've viewed a certain number of pages of listing information or if they'd like to inquire about a property. I get at least several hundred registrations per month, which my sales associates and I follow up on. That's where I get the majority of my Internet leads.

I also do pay-per-click campaigns on Yahoo and Google to get exposure with certain search terms, and I funnel all those PPC campaign leads through my main Web site. PPC campaigns aren't a main part of my marketing, but people who are serious about the organic search engine ranking of their Web sites usually also advertise through PPC campaigns because that increases both your Web exposure and the chance people will visit your site.

It's very expensive to purchase online leads. I've paid as much as $4,000 per month, but today I spend about $500 monthly. I was part of the problem because I used to tell Google or Yahoo to just make me the highest bidder for a particular search term, like "Austin home search." That just made the price go up and up, and then you start spending a ridiculous amount of money. I don't do that anymore. Instead I focus more on my efforts to increase the rankings of my main Web site without PPC campaigns.

Though the campaigns can become expensive, I view purchasing online leads as high risk with the potential for some reward, though I wouldn't call it high reward. If you're spending around $1,000 per month on online leads, it takes only one decent-sized transaction to pay those costs back. However, as those costs add up, especially if you're paying more than that, it begins to take several decent-sized deals to recoup your costs, and that really starts to weigh on you. Honestly, the cost of purchasing online leads is still higher for me than I'd like.

That's why I'm in the midst of evaluating my return. I've spent a lot of money on PPC, and tracking it has been an ongoing trial-and-error process. But now I've got an expert working on a cost-benefit analysis of my PPC campaigns so I can learn what they're costing me per lead and what my conversion ratio is. I've heard other brokers don't do PPC campaigns at all anymore because they believe the benefit isn't there.