It better be.  According to a recent study published by the National Association of Realtors and supplemented on MarketingCharts, 87% of home buyers start online.  While this is no surprise to Internet Marketing professionals there has been some inconsistency in this percentage over the last four years depending on who you talk to in the real estate industry.  Now we know.

Here’s the skinny:

• 87% of home buyers used the internet to search for a home purchased through a real estate agent,
• 72% of non-internet users were more likely to purchase in a private transaction directly from a builder or from an owner they already knew.

What information source did home buyers use:

• 87% Internet
• 85% Real-estate agents
• 62% Yard signs
• 48% Open houses
• 47% Print or newspaper ads
• Fewer buyers relied on home books or magazines, home builders, television, billboards and
  relocation companies.

When asked where home buyers first learned about the home they purchased:

• 34% said a real-estate agent;
• 32% cited the internet;
• 15% said yard signs;
• 7% said from a friend, neighbor or relative;
• 7% said home builders;
• 3% said from a print or newspaper ad;
• 2% learned directly from the seller;
• 1% from a home book or magazine.

Bottom line is that while the real estate industry has remained pretty traditional in method – using an agent, driving around looking at neighborhoods and finding open houses – online is and has been playing a significant role as an information resource to home buyers and you must be there to take advantage of it.  No online marketing company is going to tell you they will sell homes for you, and if they do, you shouldn’t believe them.  Hiring professionals to put together an online strategy that can be incorporated into your marketing plan will be the best bet.  The key is visibility, online presence, and lead generation.  Home buyers want to find the perfect home, and you might just have it, but you’ve got to be online so they can find you, thus providing a forum for them to reach out to you and visa versa.

Get the most up to date Real Estate stats regarding:
First Time Home-Buyers, Current Down Payments, Agent usage by Buyers and Sellers, Foreclosure Purchases, Features and Incentives,  and Additional Demographic Information by reading the full article at MarketingCharts.

About the study:
The 2008 National Association of Realtors Profile of Home Buyers and Sellers is the latest in a series of large national NAR surveys evaluating demographics, marketing, preferences and experiences of home buyers and sellers. NAR mailed an eight-page questionnaire in August 2008 to a national sample of 133,000 home buyers and sellers who purchased their homes between July 2007 and June 2008, according to county records. There were 10,053 usable responses and the adjusted response rate was 7.9%. All formation is characteristic of the 12-month period ending in June 2008 with the exception of income data, which are for 2007. Because of rounding and omissions for space, percentage distributions for some findings may not
add up to 100 percent.

What makes a good Search Marketing Firm?

As a business owner, CMO or Marketing Director, the choice of a Search Marketing Firm will be one of your most important decisions.  In order to fully realize the benefits of Search Marketing, it is crucial to understand what role Search Marketing will play in your organization and choose a service provider that supports this role.

What is the focus of the Firm?

It is very important to understand what the prospective service provider specializes in.  Lately, it seems that everyone is getting into Search Marketing.  There are hosting companies, web design firms, web development shops and traditional agencies all trying to get a piece of the market.  It is often the case that no firm can do it all, or at least not do it all well.   It is best to choose a firm that specializes in Search Marketing.  There is no strong argument for using your web developer or your hosting company for your paid search management to keep it under one roof.  The worst combination is a traditional advertising agency that offers Search Marketing services.  That is like getting heart surgery from your pharmacist, they may have heard about it, maybe even read about it, and may be able to talk the talk, but they don’t do it day in and day out.   No matter what type of firm you are talking to, ask them who will be managing and performing the Search Marketing work.  Is it handled in-house or outsourced to another firm?

How do they view Search Marketing?

Do they believe that one aspect of Search Marketing is more important than the other?  Or do they believe that all initiatives work together and view search holistically?  As you interview service providers it is highly recommended to learn a little about the space.  You don’t have to become an expert, just have some basic knowledge.  Unfortunately there are a lot of charlatan’s and snake oil salesman out there.  By doing an hour or so of prep work on your own, you’ll find it is much easier to avoid many of these scammers.

What are their Search Engine Optimization tactics?

White Hat or Black Hat?  Learn this terminology, especially if your company’s reputation and long term success are important.  Basically White Hat SEO Firms play by the rules of the search engines and understand the uncertainty involved in playing by the rules.  Black Hat SEO Firms will tout quick and/or guaranteed results.  Never has it been more accurate that “If it seems too good to be true, it probably is.”  Black Hat SEO Firms stretch the rules and manipulate them often to the eventual detriment of their clients.  There is nothing wrong with preferring the Black Hat Route, it does work, usually, but not for long.  Getting banned from Google is real, and blaming it on an SEO firm will not get any sympathy or get you back in.  Make sure you know which side of the fence they are on.

What is their Paid Search Pitch?

Are they guaranteeing clicks, traffic or sales?  Ask how.  Beware of the “We have a relationship with Google”.  I get cold calls on my cell phone from firms claiming this all the time; some of the pitches are quite smooth.  If they had a relationship with Google they wouldn’t be talking to you or offering services, they would be using their relationship for their own benefit.  Saying they know a guy at Google is like knowing a guy at the Lottery Commission.  It is common for an agency to have a Rep at Google, we do too, but that does not in any way indicate an inside track or special arrangement.  Beware the Google Partners or Resellers claim; that means they make a cut off your Paid Search spend.

Do they stress bid management and special software as their competitive edge?  While this was the answer many years ago, times have changed.  Every major Paid Search venue uses some variation of a quality score and smart pricing.  This means that the entire campaign from keyword to landing page needs to be tested and managed, not just the bids.

If fact, the bids are pretty much the least important factor since they are derivative of the account performance as a whole.  Google made $16.4 billion last year from people clicking on ads.  They don’t care if you bid a million dollars a click; if your account has low relevancy to the search term your ad won’t show. If you have a significant spend budget in a highly competitive and fast moving niche there can be a benefit to bid management tools, but only as an enhancement to active management, not a replacement.

And another thing; taking Google or Yahoo! or MSNs advice on how to manage a campaign, or worse yet having them manage the campaign is like having the IRS do your taxes.  Enough said.

This is just a quick post in response to Rand Fishkin’s post about the difference in SEO and PPC spending by companies which can be found here: http://www.seomoz.org/blog/the-disconnect-in-ppc-vs-seo-spending

Basically, Rand finds that companies spend only a fraction of the amount on SEO as they do on PPC.  Specifically:

SEO: $1.3 billion (11%)
- Source: SEMPO data via Massimo Burgio, SMX Madrid 2008

Not surprisingly, search advertising should continue to be the largest category, growing from $9.1 billion in 2007 to $20.9 billion in 2013.
- Source: C|Net News, June 30, 2008

Now, there are a lot of good comments on this post talking about how the major reason companies spend this inordinate amount of money on PPC is because it is immediate, measurable, and controllable.  These are all things that HiPPOs like.  One of the inherent problems with SEO is that it requires companies to have patience in seeing the results.  All SEO projects take at least three months of commitment, with the majority requiring six months or longer.

While this is all well and good, I think one of the bigger issues with PPC vs SEO spending is the fact that they are targeting two different types of searchers.  I know that when I am in consumer mode, I will specifically look at the PPC ads, because I know they are offering me something I might want to buy.  More often than not, I consider organic listings to be information oriented, which isn’t a bad thing!  It just means that targeting PPC means you are targeting people who are in ‘buy mode’.  SEO is more of a presence oriented machine that will ultimately increase sales through credibility and relevance.  This is proven by a recent study that showed PPC converts 50% more than organic.

A major problem in the future, I think, will be that SEO will become the base standard of good operating companies and that their relevancy in the organic listings will force purely commercial companies out of the top rankings.  Instead of “God made man, but Samuel Colt made them equal”, you might say “Tim Berners-Lee made websites, but PPC made them equal”.