Technology

Thinking of buying online leads? You might want to act fast

Average cost of Google-generated lead said to be up 18 percent

If you’re thinking about trying to incorporate paid online leads into your business, you may want to take the plunge sooner rather than later — at least if you’re willing to take one lead generator at his word.

The cost of generating leads through pay-per-click advertising on Google has climbed rapidly over the last few years as more people have entered real estate and more agents have embraced online marketing channels, according to Shaun Greer, founder of ExpertHomeOffers.com.

ExpertHomeOffers.com scares up leads by paying search engines for clicks from consumers searching certain phrases, like “sell my home fast,” and capturing their information on websites. It also reels in leads through Facebook and email marketing, among other methods.

The average amount ExpertHomeOffers.com had to spend to generate one lead through a national Google AdWords campaign that ran from January 2014 to January 2015 climbed 18 percent over that period, according to Greer.

That jump follows similarly annual increases in the average cost of Google-generated leads dating back a number of years, he says.

Greer believes that the increase in the average cost of a lead has grown partly due to an influx of real state agents in recent years, with National Association of Realtors’ membership growing by 6 percent, or more than 61,000 members, from February 2014 to February 2015.

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Another force driving up the average cost of a lead has been the industry’s tightening embrace of online marketing.

“Google operates an auction-based system,” Greer says. “Now that the real estate marketing has turned a corner, existing agents are spending more money to market to consumers, thus increasing the cost.”

To provide real estate agents with more flexibility in managing their marketing budgets, ExpertHomeOffers.com recently began offering agents the option to choose the price that they want to pay for a lead.

The more an agent or broker pays per lead, the more leads ExpertHomeOffers.com can send their way.

The company charges a minimum price of $35 per home seller lead.

But due to the cost and competition of certain markets, some agents in Southern California and on the East Coast are already paying ExpertHomeOffers.com $150 a lead, Greer says.

That dwarfs the average lead cost, $0 to $5, cited most often by agent respondents to a recent Inman survey.

But that survey focused on the practice of buying leads directly from their original sources, such as Facebook or listing portals, rather than buying them through a company that specializes in generating and selling leads.

All buyer leads are priced at $15 a pop, but Greer plans to soon sell those leads using dynamic pricing, as he does with seller leads.

“We just released our new system this month, so I expect the price per lead to increase much above the $200 range in highly populated regions,” says Greer, guessing agents will choose to spend more than $150 per lead to nab the contact information of a larger number of potential clients.

Email Teke Wiggin.