Mark Zuckerberg. Does he just hate realtors? Facebook ads deliver notoriously low lead quality, ad costs are only going up, and their customer support is just about non-existent (they also ban realtors for seemingly no reason at all). There are reasons for all of these things, and at first glance it may seem like Zuckerberg is trying to drive realtors away from the platform at scale. Is he, or is there more to the story? Let’s go down the list and keep score of whether or not he has something against realtors, starting with lead quality.
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We all know somebody who has said something along the lines of “Facebook leads are horrible,” whether it’s because of tire kicker leads who have unrealistic expectations, who are just browsing, or who are giving 18-24 month timelines. Many people will argue that this is because Facebook ads are interest based, and not intent based like Google ads. I’ve discussed this in a previous video, but the difference between the lead quality of these two platforms comes from Google users being forced to have landing pages vs. Facebook users who default to On-Facebook lead forms which are automatically filled in with people’s information, so lower-intent leads are attracted unless you’re using a landing page. Sure, Google leads may be better than Facebook leads when you’re using the same landing pages, but the difference is marginal. An easy way to improve your lead quality on Facebook, even if you’re using auto-fill lead forms, is by adding additional questions to the form that people have to manually answer. Only more serious buyers will answer extra questions like when they’re planning on moving, where they want to move to, and what their approximate budget is. The rest will bounce (or leave) because they can’t be bothered. On Google, people have to click an ad, load a page, manually type their name, email, and phone number in, and then answer additional questions. That’s really why the lead quality on Google is perceived to be higher. So far, 0 points for Zuckerberg driving realtors away, and 1 point for “there’s more to the story,” but we still have two more points to go. Onto their customer support.
The customer support for Facebook ads is practically non-existent. If you manage to even find where on their extremely convoluted website navigation system to contact their customer support team (show this in the video), they often can’t do much and they waste your time. They also don’t help you understand the policies Facebook has which are hidden in a box with an extremely general web page that has titles and brief descriptions of what their rules are, so you don’t know how to avoid getting your ads rejected unless you know somebody higher up the ladder than you. For example, when recently setting up a new client’s ads, the page, not the ads, the PAGE was disabled for “inauthentic behaviour.” After Googling this and adding “Reddit” to the end of the search, because people on the r/PPC subreddit often spend loads of money on paid ads themselves or know somebody who does, the answer was hidden in a tiny Reddit post. It turned out that in October, Facebook stopped allowing new pages to run ads, as per some guy who knows a guy. Now it’s important to know that Mark Zuckerberg runs one of the biggest businesses in the world, and in order to do that successfully, you need to be cutthroat. He needs to provide customer support, but the thing is, 80% of your revenue comes from 20% of your customers. This is why some of those people on reddit have access to Facebook account reps, they spend tons of money on Facebook ads every month. As for the other 80% of his clients, that includes realtors. These clients are the ones who take up the most time and money to provide support to, yet they bring in the least amount of revenue in the grand scheme of things. If your business has to appeal to investors, you have to cut costs and take the 80/20 rule seriously. As a result, realtors lose out and that’s one point on the board for Zuckerberg driving realtors away, and one point for “there’s more to the story.” Now for the tiebreaker, rising ad costs.
In the last 5 years alone, Facebook’s ad costs have increased drastically. But why? There are two reasons. One. The way Facebook’s ad system works is based on an auction. What this means, is that Facebook’s technology will perform a bunch of calculations to determine a) who the right user is to display ads to and what time is best, and b) which ad in the auction that user is most likely to take the client’s desired action on (such as opting in as a lead). So finding the right user and time is done with a huge amount of data, and determining the best ad in the auction to display is done by numerous variables such as an account’s spending history (which indicates how good of a client they are), their bidding strategy and max bid (the higher the bid the more likely to win the auction), the amount of data such as clicks and leads they have in their account (which helps them match with the right user at the right time), and the sentiment and emotion lexicon analysis of the ad (how positive or negative the message in the ad and image or video in the ad is - the more positive the better). It goes a lot deeper than this, but without working at Facebook we can’t know for sure what the other variables are. Two. As more and more big businesses take part in social media marketing, they’re taking up huge amounts of ad inventory (remember the 80/20 rule, the big players are taking up 80% of total ad space with Facebook ads). More and more small businesses (like realtors, local service-based businesses and storefronts) are running ads too. It’s simply supply and demand that’s driving up ad costs. When you combine an increasing number of big businesses running ads with huge bids in the auction and teams of people doing ad design with an increasing number of small businesses competing for the same amount of ad space, ad costs rise. That’s two points on the board for “there’s more to the story.”
So does Mark Zuckerberg just hate realtors? Well, he doesn’t intentionally give realtors low lead quality. Lead quality is more determined by the use of landing pages with manual information entry and additional lead form questions than it simply is “because Facebook.” However, their customer support is awful, their user interface is extremely convoluted (especially for their less technical clients), and Zuckerberg is choosing his investors over his clients. So it’s safe to say that in this case, he doesn’t really care about realtors, although I wouldn’t say he hates them. They just happen to be in a segment of his clientele that gets treated poorly. Facebook’s auction-based ad system simply favours ads that perform the best, and accounts that are proven to be more reliable clients. It just happens to be that bigger businesses have larger budgets and more leverage to build better ads, which causes small businesses to get the short end of the stick. So no, Mark Zuckerberg doesn’t hate realtors. He surely doesn’t favour them, but that’s not to say you can’t make boat loads of money with Facebook ads.
As a small business owner myself, I still think Facebook ads are great and my entire business revolves around running Facebook ads for realtors. My clients are the happiest they’ve been with the quality of their leads, and if you set your mind to it, you can become one of the bigger players. That’s what I’m doing.
- Evan Vance, Founder of RocketSense