September Update: COVID-19’s impact on real estate advertising on Facebook
This is the sixth continuation of our COVID-19 impact report. In order to understand COVID-19’s impact on Real Estate Advertising on Facebook, our team has analyzed over 480,000,000 ad impressions and behaviors that have generated over 280,000 leads. Looking ahead to next month’s analysis, we will begin to transition this report to an ongoing look at Marketing and Advertising trends in Real Estate, rather than placing its emphasis on the impacts of Covid-19.
Now that the traditional summer buying season is winding down, this month we expanded our general analysis to include a “summer-over-summer” analysis that compares 2019 summer data (June, July, and August) to 2020 summer’s data.
General Analysis Results
Our analysis recorded a 28% MoM increase in media cost (CPM) on Facebook. The line chart (below) shows that the media cost increased in August to levels slightly higher than those in early 2020, pre-COVID.This may be the effect of several factors, including COVID-impacted advertisers returning, advertisers from July’s boycott returning with increased budgets, and the start of presidential campaign advertising (Forbes reports $7 Billion will be spent on political advertising this election season).
However, buyer and seller intent is still strong, shown by a 15% increase in click-to-lead conversion rate (CVR) and a 6% increase in click through rate (CTR).
The above chart shows COVID’s impact on the normal real estate buying season. This is showcased in the differences in the CPM, CPC, CPL and CVR.
The CPM changes showcase the month-over-month difference in the cost of media, they do not show an actual cost comparison. When comparing August CPM value in 2020 to that of 2019 (data point not shown in the above chart) we recorded 2020’s media cost as 18% lower than 2019’s. Evidence of less expensive media in 2020 is also shown in the below summer-over-summer comparison.
Summer over Summer Comparison
Each data point shown above represents the difference between each metric’s respective average for the summer months (June, July, August) in 2020 compared to the same time period in 2019. This shows a macro view of COVID’s impact on the 2020 home buying season.
We measured large deltas from year to year for every metric, with CVR showing an astonishing 129% increase in click to lead conversion from 2019 to 2020. This, coupled with a 41% decrease in YoY CPL, shows the high level of buyer intent present in the market in the unusual summer of 2020.
Overall, media costs were 29% less expensive during the summer of 2020 then they were in 2019. The 48% decrease in CTR and the 35% increase in CPC did not have an impact on CPL due to the large CVR increase.
Correlation Between Pending Home Sales And Lead Conversion Rates?
In May we started monitoring the National REALTOR Assocation’s Pending Home Sales Index (PHS) to track a possible correlation between MoM changes in Facebook’s lead conversion rate (CVR) and the following month’s pending home sales. Our ultimate goal is to determine if there’s a correlation between changes in CVR with downstream metrics like home sales, to identify if CVR can be used as an early signal of consumer demand in the Real Estate industry.
Our first month of monitoring showcased just a 3% difference in each metric, hinting at a possible correlation. However, as shown in the below image, the following months had larger differences.
To better understand the effect of CVR on downstream industry metrics, like home sales, we made two changes to our methodology.
First, we added NAR’s Existing Home Sales (EHS) measure to our monitoring. Second, we created a table that shows each of the data points (CVR, PHS, EHS) month-over-month change from the beginning of COVID19, to present day. You can find the results below.
(Sources: NAR PHS, Feb/Mar, Mar/Apr. Apr/May, May/June, June/July. NAR EHS Feb/Mar, Mar/Apr, Apr/May, May/June, June/July. EV CVR Feb/Mar, Mar/Apr.Apr/May, May/June, June/July.)
The above chart shows the importance of understanding CVR’s impact on the Real Estate industry. For the July-August Comparison, data is not yet available for NAR’s PHS or EHS.
One noteworthy call out on the above chart is the impact of February-March CVR decrease on the following months PHS and EHS decreases, all numbers showcased in red. This may indicate that one month’s change in CVR has an effect on the following month, and may overflow into the second month’s PHS and EHS data.
This is also showcased in the 47% increase in CVR that we recorded in March-April. You can see that the following month’s PHS and EHS changes both show large gains.
Our team will keep this chart updated as an effort to identify a correlation between CVR and PHS/EHS.
Lead Conversion Rate Trend Line Through COVID Crisis
Lead conversion rate continues to become a primary focal point of our analysis. As shown in the above chart, CVR continues to rise month over month.
Cost Per 1,000 Impressions (CPM) Trend Line Through COVID Crisis
The cost of media briefly exceeded pre-COVID levels. The above chart shows a slight peak in August’s media cost over February’s.
In summary, the cost of media has risen to its pre-Covid levels, present in early 2020, however remain significantly lower than in the same period of 2019. Meanwhile, strong consumer intent continues, with click-to-lead conversion rates that continue to rise MoM in 2020, driving both CPL and CVR to significantly higher levels than we saw in the summer of 2019. Inventory might be at historic lows, but consumers are still in a serious mood to buy, and that doesn’t appear to be falling off.
Subscribe to the newsletter
Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni
[Hubspot Form Here]