I get asked one question pretty frequently. I get a lot of pay-per-click questions, SEO questions from investors, people wanting to know more about online marketing. The most common one that I get by far is, “What should my budget be? What’s a good starting budget? What’s a good monthly budget? What do I need in order to do Adwords?”
This is a real source of anxiety for people. I certainly get it, because pay-per-click is an expensive channel for investors. If you’re doing the whole motivated seller thing, it can cost a lot of money if you are not doing it in an intelligent way or you’re not really sure how to get started.
Google changed its budgeting policies recently. Your budget used to be the maximum, and you would never go over that number. Google changed the way they process billing so that now they are trying to hit that number. So it’s not just the maximum, that’s your goal.
Budgeting is really important if you are getting into this space. The first thing I want to get across is that there is no such thing as the right budget. There’s no such thing as a bad budget or good budget. If you want to do some Adwords, you’ve got to have some money, but you don’t need a certain amount.
What budgets do is dictate your strategy and your timeline. So when you ask “How much money do I need to get into that game?” there really isn’t a catch-all answer to that.
How much do you want to invest? What parts of your budget aren’t intrinsic to your strategy? What needs to move and shift, if anything at all?
These are all things that really make a difference. You don’t need a certain amount of money in order to invest in pay-per-click as an investor.
So how do you even begin to ask this question? You need to know a couple of different things.
One thing you need to know is what your goals are. Your goals are really going to dictate what budget is required. If you need to do two deals this month, there’s going to be a certain amount of money that you’re probably going to need to put aside in order to do two deals in 30 days. If your goal is to do two deals this year, you obviously need a very different type of budget.
The other thing you need to know is your timeline. What range of time are you trying to achieve that goal in? You’ll notice I said two deals a month or two deals a year. Obviously it makes a big difference. So how much time do we have? Generally, money in pay-per-click, in terms of your budget, is going to buy you speed. It’s not necessarily going to buy you a better result, it’s going to buy you a speed at which you get that result.
So if you’re trying to do two deals, you can do two deals in a month or you can do two deals in a year. You’re going to need very different amounts of money in order to do that.
The final thing you need to understand is your market conditions. In some regional markets, the cost to invest in pay-per-click goes up and down, just like the stock market goes up and down.
So it really depends on your goals, on your timeline, and your market. Once you know those things, you can start thinking about how much money you actually need.
It’s hard to give a rough estimate in a blog post like this. But what I would say is if you really have to do a deal, and you’re trying to guarantee that, budget more than you think you need. If you have time to experiment and you’re not trying to do a deal right this moment before you go out of business, then you can budget a little bit less.
Just view it like any other marketing channel. You don’t have to spend a certain amount of money in direct mail in order to do deals. You’ve just got to change your list, change your approach, change your tactics.
There’s no amount of money you have to spend. What you need to understand is the tactics, the strategies, and the mindsets that are going to allow you to use that budget effectively.
Take care, guys.
Photo source: Pixabay
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 Ad Words 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.
Dan: Alright, hello everybody, welcome back to this week's episode of The REI Marketing Nerds podcast. As always, this is Daniel Barrett, here from AdwordsNerds.com. Coming at you, it is a cold and grey and dizzily and dreary day here in Connecticut. [0:01:00.0] I'm just coming off a really long week. So this week, this past week, we launched the Search Click Convert bootcamp for Adwords. This was a small group coaching program, it was three intensive live days where I was walking a bunch of real estate investors through setting their very first lean, multiple channel marketing campaign for motivated sellers; specifically focusing on Adwords and how we used Adwords not only to get leads and appointments and hopefully deals but also use it to build up a customized dataset that we can use to target even bigger audiences of motivated sellers in our market. So it was really in depth. It was going through everything in person, I'm sharing my screen, we're doing all this stuff; we're in Adwords, we're in Facebook, we were bouncing back and forth; it was really amazing. [0:02:00.6] It was a really fun experience. One of the things that I want to share with you on this podcast is one of the major takeaways that I had from that seminar. The thing that I like about teaching – some of you may know this and I can't remember if I have talked about this on this podcast or not but before I got involved in the digital marketing space, I was actually a teacher. I was a high school teacher. I worked in middle schools. I worked in elementary schools. My specialty was history. I have a master's degree in history; a master's degree in education. I loved teaching that subject. One of the things that I really loved about it, beyond being around young people which is like super fun and invigorating and just cool stories about history which I still love to this day, one of the things that I really loved about teaching was that you would have these moments where because you're in the process of teaching someone else something, pieces that you already had so things you already knew, stories you could already tell, bits and pieces that already existed there in your brain would kind of snap together all of a sudden in different ways that you never thought about before. [0:03:13.2] So you would be in the process of teaching something about the Civil War or the Gilded Age, which was my specialty, and you'd suddenly realize something about this thing. You'd have gone over the same material hundreds of times but all of a sudden in the process of explaining it to someone else, it would click in a totally different way and you would get a totally different perspective on that material and that process of discovery was so fun and was so exciting so it was one of the things that I really, really loved about teaching.
I love doing digital marketing. I love being in Adwords. I love managing Facebook. I love doing SEO. Don't get me wrong, I actually love doing that stuff and of course Adwords Nerds as an agency is still my primary business but I really wanted to get into teaching this material, one because I think I'm pretty good at it. [0:04:09.2] I think I'm pretty unique in my ability to make this kind of contact accessible to non-technical people and to make it fun and to make it practical, pragmatic and impactful but also because it helps me crystallize what we do in a different way. Every time I teach it, every time I run a seminar, every time I give a presentation, I come away with a different kind of take on these things that again we do every single day – going online trying to find motivated seller leads and buying deals at a profit.
So, I wanted to share with you the biggest takeaway I had from doing this bootcamp. We went through these three days of intensive training and I ended up stumbling upon this model. What I was trying to do was explain how you can succeed in a world that is so uncertain. [0:05:03.4] I think understanding this is going to really help you as an investor understand how you cannot just grow but succeed beyond your wildest dreams in a world where it seems like everything is crazy all of the time. I mean, especially in the digital marketing space. Things are constantly changing. As I'm recording this, Facebook is being sued by the U.S. government for potentially allowing serious discrimination in its real estate advertising practices. Facebook is saying, look we are going to massively cut back and change and alter the way that real estate professionals, which includes investors, are able to go after their potential clients which are motivated sellers. Now I'm going to do an entire podcast on just that topic so I'm going to dig into what's happening in Facebook in depth maybe next week or maybe the week after. [0:06:04.1] But that is just one blip on the radar. There are hundreds of these changes happening all of the time. I mean if you look back just in the past five years, there have been massive changes in the way that Adwords works and the way that Facebook works, YouTube ads, Bing Ads, Google Display Network, things are constantly changing. Things are being added. Things are being taken away. Competition is increasing. The housing market is fluctuating. There is so much chaos. Part of the problem that creates is if I go out and I figure out a strategy that really works for me for motivated sellers, and I see this happen all of the time – you go out and you test an ad and you're like, "Wow, this ad kills it and this account build kills it and this bidding strategy kills it" or whatever it is, right? It's doing great. You're like this is doing so great, I'm making a lot of money, I'm going to turn around, and I'm going to teach it to someone else. [0:07:01.0] Well, by the time that person turns around and makes this strategy into a course or whatever, a PDF, a book, a video or however they want to do it and they start teaching it to other people, the fact of the matter is the environment is completely different. Just the fact that it worked a year ago doesn't mean it's going to work today. Heck, there are people out there right now teaching Facebook marketing strategies for motivated sellers that guess what, will not be legal in six months to a year. There is so much change and so much fluctuation.
The question then becomes, in an environment like that how do you actually learn and grow? If everything you learned is constantly going obsolete; how can you actually manage to grow as a person or grow as an investor or grow as a marketer? How can you actually improve over time? [0:08:04.2] This was the realization I had while I was teaching this. I was kind of having this conversation, I was talking about change and I realized that everything that we do that helps us improve – because Adwords Nerds is constantly working to improve. We are constantly learning. We are constantly trying to grow. The reason that we are able to do that is that we follow a process. We call that process the "Can I Cycle". Now, I didn't invent that term. In fact, I blatantly stole the word “Can I” from Tony Robbins, but the process, the cycle is absolutely key to long-term growth, profitability, and expansion in the real estate investment market. So this is what it is. The Can I Cycle – by the way I should back up, Can I stands for "Constant and Never-ending Improvement". This is the idea. It's not necessarily that we want to be the best right away. [0:09:03.0] It's not like I can give you a strategy that’s going to instantly make you the dominate real estate investor in your market. Instead, what we need to aim for it constant and never-ending improvement; a process of constantly getting better which will eventually get us to that goal. My friend, Nick will sometimes put this as the "Be Good Mindset", which is always going to fall behind the "Get Better Mindset".
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Dan: You know, I do jujitsu in my spare time; although not as much as I would like and I'm not very good. In fact, I'm pretty terrible. So if I go into that gym and I get on that mat every week and I say, "I have to be good." What's going to happen is I'm going to be constantly frustrated and I'm never going to be good. Now if I get on that mat every week and instead of being good, I say, "What I want to do is get better." I don't have to be good; what I have to do is get better. Am I 1% better than I was last time I was here? Did I learn something a little different? Did I learn a little detail, a little nuance? Did I get some muscle memory in there? Am I better? And if I can do that every single day, what's going to happen is over time, yeah, I'm going to get good. So this is the idea of "Can I Cycle", "Constant and Never-ending Improvement", it's the secret to actually being successful in a world that is constantly changing. [0:11:06.5]
So what is this Can I Cycle? When we get to brass tacks, how do we actually use this? It's a four-phase process. We do this in Adwords. We do this in Facebook. But you can do it in your direct mail. You can do it in your bandit signs. You can do it with your physical body. You can do it with your relationships. You can do it with your parenting skills. You can do it with anything. It's a pretty powerful tool. So phase one: identify your weaknesses. If I'm doing this in online marketing; in a sense what I'm doing is I'm looking at certain matrix. I call these my canary KPIs. You know like in old coal mines and stuff like that – they had canaries – the canary in the coal mine and the whole idea of the canary in the coal mine is you bring the canary with you in a cage and it's hanging in the tunnel with you and if you look over and you notice that the canary is dead that means you need to get out of the coal mine. [0:12:03.9] The canary is the early warning system because it breathes in the toxic gases or whatever it is and that kills the canary first before you even notice it and you're like if that canary is dead that means that this tunnel is filled with toxic gas and I got to get out of here. So that's the canary in the coal mine. So for me for online marketing I have canary KPIs. These are key performance indicators that warn me if I'm running into trouble. An example of this might be conversion rate; conversion rate meaning how many people opt in on landing page. If I know my conversion rate is supposed to be between 5% and 7% for a real estate investor, you shouldn’t necessarily take that number to the bank. That depends on a lot of stuff that's going on – I'm talking about with our campaign specifically, so if you're running a different type of campaign your conversion rate is going to be different. Let's just say it's 5% to 7%, that's our target. [0:13:01.6] Well, if I look at my landing page and it's converting at 1%, guess what? That canary KPI is warning me that I have a major problem so the first step is identify our weak matrix.
Now phase two is plan your intervention. If I know what my weak matrix is and I’m trying to improve that weak matrix, I can plan an intervention that is going to hopefully me there. If for example let's stay with conversion rate example, if my conversion rate is really low, what's an example of an intervention I can plan? Well I can plan to test a completely different landing page. I can change the design, change the color, put a bigger form, have a bigger phone number on it, or whatever the deal is. I can plan an intervention. Luckily for marketing, especially for motivated sellers, there is usually a pretty limited list of interventions. I might have six canary KPIs for Adwords and I'm going to probably have two, maybe three, interventions for each of those KPIs. [0:14:00.4]
So, once we have decided what we're planning on – what our intervention is going to be, we have to – this is phase three now – execute an experiment. If I know that I’m going to try this landing page thing in order to improve my conversion rate. We identified conversion rate in phase one, we planned our intervention, we are going to test the landing page in phase two, well in phase three we execute the experiment. So, we put the landing page in place. We have something so we can track our data. We know if we are winning or losing. You always got to have a way of tracking this. There is the Peter Drucker quote, which is justifiably famous, where he says, "What gets measured, gets managed." Of course. So if you're executing an experiment, of course you got to have a way of measuring the results. So, I might split my traffic between the landing page that's got the 1%, the problem one, and I might split my traffic between this new one and I might run that for two months just to get enough clicks on both of them to make sure I'm statistically significant, I've got enough data there. [0:15:07.0] So that's phase three; I'm executing the experiment.
Then finally we move on to phase four. Phase four is review the results and implement the winners. So, I’m going to come in and in a couple of months I'm going to look at my landing page experiment. I'm going to say what happened? My 1% page that was my default, the one I had before which is still probably around 1% - it might have gone up or down a little bit but it's probably still around 1%. Let's say my new one is 5%; much closer to where I wanted my KPIs to be back when I was identifying my weak matrix. Cool, so I can pick a winner here. I can implement that winner. I'm going to pause out the landing page that was 1%. I'm going to drive all my traffic to the 5% one and guess what? I just 5Xed the amount of leads I'm going to get from my campaign.
Now is it true that because everything is changing and everything is a little bit chaotic and you never know what's going to happen, is it true that that page might stop working in the future? [0:16:06.6] Yes. Is it true that Adwords might change the way that they send traffic to my website? Yes. Is it true that Facebook might limit my targeting potential? Yes. Yes. Yes. All these things are true. All these things are always going to be true because we live in a chaotic, unpredictable world and especially anything involving real estate is going to be pretty chaotic and unpredictable on top of that. So yes of course, that's true but if we are constantly implementing this Can I Cycle, this Constant and Never-ending Improvement Cycle, of identifying our weak matrix, planning our interventions, executing our experiments and reviewing the results and implementing the winners then we are pretty much always going to be getting a little bit better every day.
Remember it's not the Be Good Mindset that wins out; it's the Get Better Mindset. [0:17:02.2] I don't care what your numbers are right now. I don't care if you're making money right now in your online marketing or not but what I care about – if you want me to predict your success, your future success, what I'm going to ask you about is do you have a regular and consistent process of improvement every single week? Are you getting better day in and day out? Because if you're crushing it now but you're not getting better every day, I'm telling you your days are numbered. If you're struggling now but you're doing the work and you're trying to get better all of the time, I have every bit of confidence that you're going to get to where you want to be.
Hey, I hope that was helpful. Like I said, I had a really amazing time at the bootcamp. Shout out to everyone that joined us. It was the biggest one we had ever run and had a really had a truly amazing time helping all you guys.
Hey guys, if you like this podcast, you're getting value out of it you should join our Facebook group that's at AdwordsNerds.com/group. [0:18:04.0] It's free. It's called the REI Marketing Nerds Facebook Group. We have got a lot of awesome people in there posting tips, tricks, and strategies. A lot of real estate investors. There's no SPAM. I post podcast episodes as well as blog posts and stuff that I don't typically talk about on here so there's a lot of content going on in there all of the time. Please come and check it out. That's the REI Marketing Nerds Facebook Group. You can get there by going to AdwordsNerds.com/group.
As always, this is Daniel Barrett from Adwords Nerds signing off, have a great rest of your week and go out there and get some leads and appointments. I'll talk to you soon. Cheers.
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Whether you’ve closed a ton of deals as an investor or are still waiting for that first lead, you know that generating leads is often the hardest part to becoming a successful real estate investor. In this episode, Uriah Dortch tells you all about how he systematized his investment business so that generating leads isn’t