The Cost of Free Advertising

When we expanded nationally, we offered free listings with no set up fee and no success fee. In other words, they really were cost-free listings. We even offered to accept listings via datafeed or do the listing setup ourselves.

I personally called the marketing director of at least 100 property management companies fully expecting that they’d be interested in this offer. Much to my surprise, this effort was a failure – we only got about 160 free listings.

Now I understand why: there is no such thing as a free listing.

Here’s why.

At least one new apartment listing site appears each month. About half of them are positioned as apartment mapping or review sites. They populate their sites with apartment directories, do a great job with SEO and then make really nice revenue through AdSense ads or by sending leads to apartment listing services through their affiliate programs. These clog up the search engine results for the rest of us, and do not generate more than a handful of leads – many of which probably go unnoticed by multifamily marketing directors.

Then there’s the other half that started with the goal to be the next leading online apartment guide. These companies put up sites and then begin calling multifamily marketing directors in the hopes of generating revenue through pay per lease, pay per lead or monthly listing fees. In order to build the relationship, they call or email with offers for free listings (or a pay for performance model, such as pay per lead). These phone calls and emails add up. Screening them is a big burden for marketing personnel.

Let’s suppose you actually manage to get someone to advertise her property for free. Though there are no out of pocket fees, she has measurable costs associated with tracking and measuring results. If it’s a pay for performance solution, such as Pay per Lead, then she has the additional burden of validating each lead. If the source is only generating a few leads per month, it might not be worth the internal costs, even for a free lead.

It has been helpful for us to understand that just like there is no such thing as a free lunch, there is no such thing as a free lead.

[photo credit: everystockphoto.com]