If you own a small real estate business, don’t be surprised if search engine giants Google and Overture show up at your door this year to woo you into plans for a locally targeted paid search world. The worldwide Web is finally figuring out how to facilitate local businesses like real estate.
Paid search is heading in new directions and the major players are honing in on local advertisers. Geo-targeting searches by ZIP code presents a great opportunity for real estate brokerages, perhaps the most location-specific business of all.
“Local search is still at its beginning,” said David Hallerman, senior analyst at eMarketer, which provides statistics on Internet, eBusiness and emerging technologies. “The pinpointing of where people are is still imperfect for various reasons.”
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Local search right now is somewhat limited to search queries in which the person enters a combination of keywords that include a city name. For instance, a person looking for homes in Los Angeles might conduct a search for “Los Angeles homes.”
Realty agents like Gregory Blackham with Prudential Americana Realty in Las Vegas have been at the forefront of paid search. Blackham has used local keyword combinations on Google and Overture for about two years. Using a city name in keywords is essential to target consumers, he said.
“Otherwise it’s useless. There has to be local traffic, people looking specifically for homes in Las Vegas,” he said.
Blackham’s Web site gets between 50 and 60 visitors a day from his paid search ads. But what about all those millions of broad search queries for “homes” and “real estate” that don’t include a geographic location?
As search engines reach for fresh market growth, they are working on methods to identify Web searchers’ ZIP codes so, for example, the person only needs to enter the term “homes” into a search query and the results will reflect only the relevant Web sites and sponsored links for that person’s ZIP code.
Google, Yahoo!’s Overture and Citysearch are just three of the players actively promoting new local search products and trying to create greater functionality, according to a report on search engine marketing Hallerman co-authored for eMarketer.
Local paid-search ad spending is expected to grow from $1 billion last year to $2.5 billion by 2008, according to the report, which cited Princeton, N.J.-based research firm The Kelsey Group.
Local search essentially will enable thousands of brokerages across the country to purchase the same keywords, such as “homes” or “real estate,” without having to compete with every bidder in the same industry nationwide. This levels the playing field for the single agent who previously couldn’t compete with bids from national aggregators for the top sponsored links spots in searches for these golden words.
National aggregators like HomeGain, LendingTree and HouseValues currently occupy the higher spots on paid search results for a simple search for “real estate.” Other major players include ServiceMagic and AgentConnect.
“I don’t even try to rank number one because people are paying $1 or $2 per click for those spots,” Blackham said. “I try to find the best ratio for cost effectiveness, between not spending too much and still getting visitors.”
Even more local agents will start to clog the paid search arteries this year. The search business has become a popular source of leads for traditional real estate companies.
Search “Oakland real estate” on Google and nearly all the sponsored links results belong to single agents. Same goes for New York. A search for “Boston homes” turns up more company Web sites than individual agents. ZipRealty, eRealty, BostonHomes.com and CityLife Real Estate all play the search engine game in Boston.
As geo-targeted search picks up, advertisers will still incorporate the city names in their keyword bids, according to Hallerman. The success of local search methods the search engines are trying to incorporate in their businesses will depend on their ability to pinpoint the location of the individual performing a search and their ability to serve up relevant ads that fit that geography.
Yahoo!, MSN and AOL have an advantage over Google in the local search realm because each has a large number of site visitors who are registered for their e-mail services. When signing up for e-mail, site users often disclose their ZIP codes, so anytime that person is on say Yahoo! searching for homes, the search engine could target its results based on location.
“Effective local search can really be one way to boost clientele. One thing we see in studies is that next to e-mail, search is the second most popular online activity,” he said.
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