Search engines a better driver of online sales
Besides online advertising, is there some other effective online marketing tool? While opinions may differ, local real estate developers are betting on search engines to provide more comprehensive information to help them woo potential homebuyers.
Properties are what we call high-involvement products in marketing. Unlike shampoos or beverages, consumers usually spend a great deal of time to collect information before making a purchase. For developers, the sale of an apartment is just a transaction, but it could be a time-consuming and complex process for homebuyers.
In marketing high-involvement products, helping consumers get accurate and comprehensive information is always a major task. And it's the same for real estate developers.
In the past, real estate developers mainly resorted to TV commercials or newspaper advertisements. But because of constraints on time and space, the information contained in traditional advertising is usually incomplete for consumers.
For example, homebuyers do not only want to know the location and price of a project, they also pay substantial attention to factors such as nearby schools, hospitals, environment, and even their neighbors. Such information is usually too detailed to be put in a 30-second TV commercial.
Moreover, consumers are getting suspicious about advertisements these days. And they are trying to get information from third parties, from friends or online sources, to have a better idea of their target.
That's why more and more homebuyers are using search engines to collect housing information, ranging from prices to schools. Although the trend somehow increases the difficulty of traditional marketing, it can also create a new opportunity for developers if the search engine is effectively integrated into the marketing strategy.
SOHO China campaign
Pan Shiyi, the property tycoon who controls SOHO China, decided to use Baidu, China's most popular search engine, to promote its real estate projects last year. Baidu designed 620 key words for SOHO China. When consumers tried to look up these words on the search engine, related SOHO projects would be listed at the very top of the search results.
For example, SOHO China bought the key words "Jianwai SOHO" in Baidu's search results. If potential investors wanted to buy or rent office space in the area, when they searched the words through Baidu.com, the first link to appear would be SOHO China's official website.
In order to see how effective the service was, SOHO China suspended all its advertising in traditional media. The company says Baidu brought more than 30,000 visitors to its websites in two months after the marketing campaign began.
By including search engines in online marketing, developers can also maximize their existing investments in online marketing such as online advertising and their website spend.
Real estate developers have been spending big on the Net over the years, most of the money going into advertising.
Soufun.com, the largest property website in China, has seen its income more than double in the past three years. By providing online property advertising services, the website raked in $20 million in revenue in 2005. The company expects its revenue to double between 2006 and 2008.
Soufun is just one of the real estate websites that have mushroomed over the years. And developers are the prime advertisers on these sites. If search engines are effectively used, previous marketing expenditure could clearly make a bigger splash online.
According to Baidu, SOHO China is not the only company in the property sector trying to sell through search engines. It also has as clients property agents, home improvement companies and construction material sellers.
Compared with advertising, the search results are more "active" as they are the content consumers are looking for. Thus, a marketing campaign through search engines could also be more effective than traditional advertising methods. Meanwhile, the pay-per-click model allows advertisers to better quantify the effect of their services.
Deng Yongbing is a reporter and editor at Sino Foreign Management Magazine
(China Daily 04/12/2007 page15)
