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There is increasing buzz around lawsuits against social media platforms, real estate agents and brokers over “scammy” and “spammy” lead generation activities. Some of these problems come from brokers who confuse social media with advertising (but we have a social media policy!); who don’t understand digital marketing practices and technology (I’m not techy!); and who don’t supervise their agents (I can’t track everything they do!)
Some brokers encourage illegal behavior, thinking that the laws only apply to big companies. Others just don’t care, because after all, it’s a tough business and the name of the game is lead generation.
1. A click is not a lead
Vendors, coaches and influencers provide countless videos and webinars on how to generate “leads” for very little money, and then how to relentlessly follow up to convert. For quite some time, I’ve been saying that a click on an ad is not a lead — you do not have permission to contact someone unless they said you could.
2. There are consequences for bad digital marketing
Email spamming is illegal. The CAN-SPAM Act doesn’t apply just to bulk email — it covers all commercial messages. To be compliant and not get fines of $42,000 per each illegal email, you must demonstrate affirmative consent. That means that a recipient has agreed to receive emails from you, also called an opt-in.
Robocalling and robotexting are violations of the Telephone Consumer Protection Act, which requires marketers to obtain prior written express consent from an individual for that marketer before any robocalls or text messaging can be made, also called an opt-in.
Calling or texting people on the National Do No Call Registry (DNC) is illegal. This should be basic info for real estate folks, but as a reminder:
- There are 200 million people on the National Do No Call Registry
- The DNC list prohibits unwanted telemarketing calls to consumer’s personal phone numbers, including home phones and cell phones
- Federal no-call rules cover both interstate and intrastate calls
- Some states have more restrictive laws
- Calls made to open house attendees are not exempt
Think of it this way: if I click on a Nordstrom ad on Facebook for a snappy pair of sandals, can Nordstrom email me with a list of all sandals at the local store? Text me to come in to try on sandals? Call me with an invitation to a sandal sale and a 50 percent off spa visit? Nope. They can’t do any of those things even if I have ordered from nordstrom.com in the past or asked a question in chat — unless I have expressly agreed to be contacted about offers for products and services.
This whole digital marketing thing is really quite easy to understand.
3. Cellphones are covered by the DNC list
Automated and pre-recorded calls (including texts) made to cellphones by businesses are prohibited by federal law unless consent has been given by the consumer. How hard is that to understand?
4. Never be a follower
There is rampant misinformation in the Facebook groups about what’s legal. I was recently in a meeting where an agent insisted that his practices were OK because he sees “how to do it” all over Facebook. But as my mother would say, if everyone else is jumping off a cliff, that doesn’t mean that you should too.
The vendors of various robocall, texting and email marketing products don’t advise users on legal practices. Is it their job to? Legally, probably not. But it seems wrong to make money from enabling illegal behavior and let agents take the brunt of the lawsuits.
The vendors, coaches and gurus should be worried that they, like Facebook, will be named in various types of lawsuits. If I sold products or services in this space, I’d want to demonstrate that I aggressively sought to educate users and subscribers on legal and best practices.
6. Social media isn’t always best
Facebook was charged in late March 2019 by the United States Department of Housing and Urban Development (HUD) with violating Fair Housing laws for data mining that allows advertisers to target their housing and lending-related ads to certain audiences.
Just like the banks that enabled — and profited from — loan fraud and precipitated the housing market melt-down of 2008-2010, Facebook enables — and profits from — discriminatory advertising practices that limit the housing choices of non-selected audiences. This is not about advertising to certain ZIP codes — it’s about mining personal data to allow audience selection.
This suit came just days after Facebook (including Instagram and Messenger) settled another group of federal lawsuits around targeting ads.
And before you go rushing off to start lead generation advertising on another platform, Twitter and Google might be next. The message? Audience-targeted advertising on social media platforms is becoming a bad idea for the real estate industry.
7. Be careful with cold-calling
Some phone-based cold calling might be OK from a legal perspective. “Real estate agents who manually look up or buy the numbers of prospects could text or call consumers at those numbers without their prior express written consent, provided they do not use an auto dialer and the numbers are not on the Do Not Call list,” Mark T. Dabertin, special counsel in the Financial Services Practice Group of Pepper Hamilton, told Inman.
Personally, I’d consult an attorney, your broker’s counsel and/or your association hotline before cold calling.
8. Have a plan of action
Education: Obviously the brokers are responsible for supervising their agents, but from what I see, the majority of brokers do not supervise prospecting activities nor do they understand the laws around digital marketing. So the industry has a massive need for education of brokers and, of course, the agents.
Accountability: Let’s hold the vendors, coaches and gurus accountable for what they encourage their users and followers to do. We should ask questions. Look for proof of how they help agents and brokers practicing healthy marketing. Reward the good and condemn the bad.
Choose good partners: There are great vendors and coaches in the world who aren’t slinging bad practices. Learn the technology. Hire trusted advisers to help you select the best products and services.
Content marketing: Digital marketing isn’t dead, it just needs to be done with a focus on creating evocative and relevant content and building organic audience reach. Stop spending money on buying ads, hiring inside sales agents (ISAs) to “follow-up” on non-leads and badgering agents to badger people who merely clicked on a Facebook ad. Spend that money on creating beautiful stories, taking and sharing stunning photos, getting and promoting client testimonials. And please don’t charge agents with becoming masters of content creation. Most can’t — or shouldn’t.
Engagement: Most important of all, spend some bucks on learning how to engage on social media, and stop thinking of it as an advertising platform. Most agents should be able to engage with their sphere of influence (SOI) and folks in their community on Facebook and Instagram. It’s not rocket science or advertising, and it is free.
Leslie Ebersole built the BRIXGroup, a successful real estate team at Baird & Warner Real Estate in Chicago, and is the Chief Marketing Officer at BRIX Twin Cities. The BRIX Group also provides marketing and consulting services to the real estate industry.