Episode #248 – How To Get Better Leads In Today’s Market, Part 2

You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.

0:39 Hey, guys, welcome back, you're listening to the second part of last week's episode. Let's jump back in. So before we get into effects, let me just be clear about what I'm talking about. We're not gonna get too much into the technicalities, I'm just gonna keep this high level, or in Google ads, you have keywords. Keywords are how you tell Google who you want to see your ads, right type and sell my house fast. I generally want people who type in some as fast to see my ads. That's how it works. But there's another layer of that called match types. And basically, match types control how much leeway Google has in terms of interpreting that keyword. So it used to be if I had an exact match keyword, the only people who would see my ads are the people who would type in that exact keyword, no variations, no differences, they have to type in that exact keyword.

All right. Now, phrase match keywords were a little bit wilder than that, okay, they've got to include these words, but they could come in different orders. And you could add things to the end. So if I targeted sell my house as a phrase, match keyword, I would show up when someone typed in sell my house, but I would also show up and sell my house fast or sell my house, Arkansas, right, or I want to sell my house. Okay, as long as they say sell my house, that's fine. And you could add things on. And then we had broad match keywords, which were basically just topics, I say sell my house, Google's gonna show my ad to anybody who's interested in the topic of selling their house. And that that could mean that they typed in sell my house. But maybe it also means they had typed in Zillow, or I typed in, you know, I don't know, MLS listings or something. Okay, so we have this system, where you would give Google more or less control over how they interpreted that keyword.

And that was the primary lever you had to pull to improve your lead quality. Okay, if you want more motivated sellers, the system used to work this way, if you want more motivated sellers, you got to choose, I'm sure you've heard this before, motivated keywords. So sell my house fast, is going to be more motivated, the thinking wins, then sell my house, right just like if I'm if I type in buy shoes, that means one thing, but if I type in, you know, buy Air Jordans, you know, 9098, read size 10 Well, that means a completely different thing. And so the thinking with you want more motivated sellers really qualities off, you gotta change your keywords, target more motivated keywords, target exact match keywords, cetera. And that worked for a long time. But I'm telling you, if that's the strategy. Now, if that's your strategy to generate motivated sellers now, friend, you are not going to make it.

And I'm not being dramatic. Because this something we deal with literally every day. And you're not going to make it because the fact of the matter is exact match keywords aren't that exact. And phrase match keywords are very broad nowadays. And this trend of Google basically forcing more and more variation to show up in your keywords to sort of take away more of the control you have over who sees your ads. This trend is not slowing down friends. This is speeding up. And my opinion, my guess is that in the next five years or so we probably get rid of keywords altogether. I'm recording this in 2023. This year was the first year in Google's keynote on Google Ads this year was the first time they use the phrase key word less future, the key word less future. And in fact, for most of Google's new campaign types, performance Max and demand gen and so on. You don't need keywords at all. It's interesting. Right? So the trend here is that things are more complex.

Things are harder to predict. And because of that Google knows, well, hey, you're not going to be able to handle it, or at least they think that and so what they're doing is slowly chipping away at the amount of control that you have over who you're targeting and why. Ultimately, we'll probably get to a point where you just pop in your website and they figure it out for you. And in fact, you can already do that if you want to do that. I don't recommend it, but you can test it. Now. All these things are happening at the same time as one final part of this process, which, of course, is what's happening in the housing market itself, is I think most people would say, you know, your market might be different. You tell me look around. Are you in a buyer's market right now or a seller's market? Most of you are gonna say you're in a seller's market. And doesn't mean that in a seller's market, real estate investing doesn't work. Of course, it always has.

And we've got lots of historical examples of investors who made tons and tons of money and there are many, many investors making tons and tons of money using online advertising for motivated sellers right now. I know because a bunch of them are our clients, right? So it's not that it can't work. The problem is, if you imagine a bullseye, or a dartboard, I should say we're in imagine dartboard. Motivated sellers are always the center of the dartboard, right? The dartboard represents a whole housing market motivated sellers are relatively small shunga that right in the middle? All right, that's always how it is. There are many more sellers than there are motivated sellers. Right. Now, in a seller's market, what tends to happen is that center, the Dart, the dark dartboard, the bullseye, that bull's eye shrinks, okay, there are less motivated sellers, as a percentage of the overall market than there traditionally have been. And so the target for your campaigns is shrinking. It's smaller. Now, that by itself, wouldn't be the end of the world.

Right? What's happened a bunch of times, and particularly at AdWords search, we've been through many of these markets before we get it. So no problem, let's just do what we always do, when our target is shrinking. Let's just tighten our match types and control are keywords that, Oh, right. We can't do that anymore. So what's happening is, you have this complexification of the system in general, while Google is reducing the amount of control that you have as the advertiser. And while the bullseye of motivated sellers, as a percentage of the market is shrinking. And when you combine all those things, you get declining lead quality effect, and many of the investors that we talk to people come to us and want to work together, you know, people are doing online marketing or wherever this is, by far the biggest complaint is that, look, Google is good at generating leads. Now if you put money in Google, you can generate leads, the problem is, they're not motivated.

That's why we're here. They don't want to sell their number to it. Now, you know why? It's not because hey, this person picked the wrong keyword. It's not because hey, they built the campaign wrong. It's not because hey, I'm just a bad investor, and yada, yada, yada. There are structural reasons why this is happening. Now, the question, of course, after that is what to do about it? What do you do about it? If you can't target, effectively, and I'm, by the way, I'm not saying like, throw out your keywords, you know, I'm being a little dramatic for the podcast, keywords still have a place, we still use them all the time, right. And so I'm not saying throw about. But if that's not an effective targeting mechanism for improving lead quality, what is and here is the mindset shift I'm going to give you this is what we're doing. Okay, there's what we're doing with our clients. And this is, I think, the single biggest shift you need to make for the next 510 years, maybe longer, because if you look out at society, what's happening right now in society in tech, is the rise of AI.

Our continued use of algorithmic decision making tools, right, the way Google Ads flags, your account for suspension is through AI, it's not a person's through AI. So when you are interacting with these systems, you got to change how you think about them. Okay, remember, they're complex, they're not complicated. It's not a machine anymore. All right, these systems are not machines, where you just gotta get in there and you got to be a good enough mechanic that's not that's not how that's not how you should think about it. You should think about it like training an animal Think about it like training it in a smarter way.

9:53 Wants find motivated seller leads online but don't know where to start. Download our FREE motivated seller queue Good report today, AdWords nerds have spent over $5 million this year researching the most profitable keywords for finding motivated seller leads. And you can grab these exact keywords when you download our report at www dot AdWords nerds.com/keywords.

10:22 Okay, how do you train an animal, it's very different from the way you work with the machine. Right? If I want my car to do something, there's a sequence of steps I go through to make my car do it. And it does. And if it doesn't do it, that means it's broken. And I get it under the hood and I fix it. All right, animals don't work that way. Animals don't work though every animal is a little different. Your dogs probably very different from my dog. But there are general principles that we can use to train them, right. So if you want your dog to do something complicated, let's say you want your dog to go out and get you the paper in the morning and bring it to you classic, right bringing the paper in the morning, or you're smoking a pipe with your slippers on or whatever. Let's say you want to train the dog to do that. But how do you do that it's not a process of just telling the dog what you want in the right way. You can't just like really explain it to him. Likewise, yell and Adam isn't going to do anything about it.

Right yelling at him is not going to get him to figure it out. He doesn't know how to do it. So how do you train them to do it? Well, the way that you actually train dogs to do this kind of complicated tasks is through reinforcement. So the difference is, you're not so much worried about what happens before, the thing that the dog does, what you do is reinforce it when it happens. So the process of training set happening at the beginning or the surf before the task, it actually happens after. Now, of course, if I want the dog to do something complicated, like, okay, it's gotta get up, he's got to walk out, it just got to listen for the newspaper, it's got to walk out to get the newspaper and put it in his mouth, bring it back to me, and I'm in my chair is going to drop it as my feet and it's gonna sit or whatever, right? There's a whole sequence of events. Of course, I can't just wait for the dog to randomly do that, and then reinforce it, because it's never going to randomly do that. It's too complicated. So what you do is you break up that behavior into all sorts of intermediate steps.

And you chain those together with reinforcement. So for example, I might put the newspaper like in the kitchen, just on the floor, and don't say anything. And whenever the dog goes up to the newspaper and sniffs it, I give it a treat. And I might just do that for a week, dog randomly walking around the house, walks up to the newspaper, immediately give it a treat, dogs walking around walks up to the newspaper, immediately give it a treat. And sooner or later the dog learns, okay, okay, oh, I go to the newspaper, I give it a treat. All right. And then I move the goalposts a little bit, I stopped treating the dog when it goes near the newspaper. Well, what I do is I treat the dog when it sniffs the newspaper puts its mouth near it, then I treat it, but I only treat it that. So the dogs like wait, I thought I was getting a treat when I went to the newspaper, the alerts now to put its mouth near the newspaper, and then it gets a treat every time. And then I move the goalposts again.

And I say okay, you're only going to get the treat when you pick it up. So when the dog picks up the newspaper, it's the treat dog picks up the newspaper gets the treat, right, then I might try hiding the newspaper. And it only gets a treat when it finds it and then picks it up, right? Do you see how I'm chaining these behaviors together? But where is the training on my part? Where's the training occurring sequentially? It's not before the task, it's after it. reinforcement can only happen when the behavior I want to reinforce has already occurred. Now let's come back to Google ads. I'm telling you right now, all algorithms are closer to animals than they are to machines. There is no clear cause and effect, even for the people that design these algorithms. If you say, Well, why did it do this particular thing? They can't tell you. They can't tell you. This is one of the reasons I don't love our algorithmic feature. But that's for another podcast.

These algorithms are much more like animals. And if we want to get a certain behavior out of them, we've got to get used to thinking about training these algorithms like training a dog through reinforcement. Now for the algorithm. What it gets reinforced with let's we'll stick with Google but by the way, again, this works exactly the same for Facebook ads. That's or whatever. But Bing Ads, anything you can think of? What reinforces the algorithm is that conversion? That's like the treat for the dog, the conversion event and a conversion event can be anything. A lot of people think that conversions means leads online, but it doesn't. It's just any event that you want to track. And it happened, right. So it could be someone navigates to my About Me page, or make that a conversion. Could be someone fills out a form, I make that conversion. Someone calls me that's a conversion, or somebody spends 10 minutes on my website, that's a conversion. Okay. I can track anything with conversions. But a conversion event is like treating the dog.

It's the reinforcer. All right. Now, if we want that dog to go get us better quality leads, how do we do that? Well, what most investors do is they say, Okay, well, when someone fills out my form, that's the conversion, that's the treat to the dog. All right, anytime someone fills out the form, that's the conversion, that's the treat to the dog, right? That's the reinforcer. And that's great. You got to do that. Gotta tell Google when you're generating leads. But but but remember, what we're training the dog to do. In this case, it doesn't care who filled out the form, doesn't care, doesn't care if they were a seller, doesn't care if they had a house, doesn't care if they're in your area, just wants people to fill out the form. Now before we would control for that, again, by controlling our keywords, but now you know, that's much harder to do. So we can't just say, anytime someone fills out the form, that's the thing, that would be like saying, Okay, if you go near the newspaper, you get the treat. And that's cool.

But it's not what we wanted. Remember, I wanted to be in my chair, in my slippers with the pipe and the dog, bring me the newspaper, and then put it in my feet and then sit down. That's what I wanted. So getting next to the newspaper is cool. That's the first step. But what happens after that, and here's where the shift happens, the way you get better leads is by improving your targeting. But the way you improve your targeting is not before you generate the lead, it's after by choosing when to reinforce the algorithm. So for example, can you set it up so that you don't send a conversion when someone fills out your form, but only when they go to appointment? Now with the dog, what the algorithm learns, is that its job is not to get leads, it's to get appointments. Very different behavior.

17:44 Can you make it so that the algorithm doesn't get reinforced when someone fills out the form, but only if they fill out the form in a certain way, they say a certain thing that you care about? Can you make it so that the algorithm doesn't get reinforced when it generates a phone call, but only when that phone call goes for two minutes or longer? How you reinforce changes the behavior you will get. And the shift we need to make here is understanding that we are in a world where the tools that we use are much more like animals than they are like machines, it's not a matter of pushing the button and getting the dollar. And if you didn't get the dollar, that means someone messed up and they didn't push the button. Usually, usually, usually lead quality problems are caused by a lack of reinforcement. Now there could be a variety of reasons why that is, could be because you haven't set it up could be because you don't know how could be because you don't have a lot of people in your market.

And so you don't get a lot of appointments even when it goes well. It could be a lot of reasons could be your budget is a problem. And you're getting bit out of them. I'm not saying this will solve all your problems. But what I'm saying is you need to think about this problem differently. If you have been doing online marketing and getting frustrated and saying hi I'm not, I'm not maybe not doing it right or the keywords are right or whatever. I'm telling you, I'm telling you, I'm telling you, that was never the problem. The problem comes from thinking you're in a complicated world. But you're not. You're in a complex world and complex worlds need to be navigated in a very specific way. In this case, by understanding you are not surrounded by machines, you are not pushing buttons and pulling levers to get a result. Instead what you are doing is interacting with things that are while not alive. If, of course, very much mimic the behavior of living thing.

So when you think about how am I going to improve my lead quality in Google ads so I'm thinking about what button do I need to push should be thinking about? How do I train the dog? Hope that makes sense everybody I hope this was useful. As always, I cannot tell you how much I appreciate you being here being a part of this podcast. It means the world to me, please leave us a review wherever you get this podcast. I read every single one. They really do brighten my day. So please, I would love that. Thank you again and I'll be talking to you again. Next time. Cheers everybody.

This is thepodcastfactory.com