Online search engines have become one of the most popular forms of advertising for small businesses. So it’s no surprise that property managers have readily embraced search engine marketing (SEM) as a way to attract new customers. The question, however, is whether it is cost-effective and manageable for them.
SEM campaigns work particularly well for businesses that have unlimited inventory to sell. A few years ago, we were selling packaged software applications as downloads from our website. Our “inventory” was limited only by the network bandwidth available to customers interested in downloading the software from our website. We paid a few dollars whenever someone clicked on one of our ads, and as long as at least 10% of those visitors bought our software, we were bringing in more money than we were spending.
However, SEM tends to be far more challenging (and costly) for businesses with perishable or limited inventory. Take for example, property managers with vacation rental homes. Many property managers sell out their inventory on popular travel dates (e.g. Memorial Day weekend) a year in advance. However, if they advertise their property looking to book dates that are still open, those ads attract a significant volume of clicks (at significant cost) from renters interested in traveling during times the property is no longer available. As available inventory gets sold, it costs more and more to generate each additional reservation, because fewer and fewer dates are bookable.
For example, if you have a property for rent in Maui, you’d probably need to pay about $10 anytime someone visited your site after clicking on a search engine ad for a Maui vacation rental. If one in 10 visitors generates a booking, your advertising cost per reservation is $100. However, near popular travel dates, such as the week before Memorial Day, the majority of clicks would likely be last-minute travelers looking for homes that are available for Memorial Day. If your campaign is still running, you could easily spend a few thousand dollars for traffic interested in houses that you’ve long ago booked for Memorial Day.
PickPackGo is an efficient, cost-effective, pay-for-performance online advertising solution. Property managers never pay for unqualified clicks from travelers interested in travel dates that are no longer available. Instead, they define travel seasons and bid what they are willing to pay for qualified inquires during specified travel seasons. With traditional SEM programs, advertisers pay for relatively unqualified clicks, which can lead to exorbitant costs for a qualified lead when there is limited inventory available. With PickPackGo, advertisers can bid for qualified leads, and know for certain that the cost for each qualified lead is capped at their bid amount—regardless of the how much inventory is available.
For small businesses with perishable inventory, online advertising services that cater to their markets can be a more effective and ultimately less costly way to reach customers than search engines.
Posted: April 24th, 2008 under Property Management, Vacation Rentals.
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