Turning off a marketing source is one way to see how well it's producing traffic and leases. But is losing those leads worth the risk?
Several times in recent years, Mark Juleen has thought he was paying too much for marketing. He suspected one marketing source in particular was too expensive for the number of actual leases his communities were getting. So he took what seems like an obvious step. He turned it off.
Juleen, Vice President of Marketing for Carmel, Ind.-based apartment firm J.C. Hart Company has “gone dark” twice in the last two years with that source, and each time he learned a lot about what his company was actually getting from it. The first time, he decided three months later to renew after leads and traffic dipped. The second time, he saw no impact from the decision, and the source has remained turned off.
This method of testing a marketing source by turning it off and measuring the impact, referred to as “dark-period testing” in presentations by Gary Angel, President of marketing firm Semphonic, at the 2009 and 2010 Apartment Internet Marketing conferences, has gained esteem among some apartment marketers as a way to understand the full impact of a marketing source.
In a time when prospective residents might be interacting with a company in many ways—online, on the phone or in person—before choosing to rent, “going dark” helps marketers understand whether eliminating a source will actually decrease traffic and leases.
“Taking a constant and just turning it off can really help paint a picture for you,” says Juleen, whose company operates 15 communities in Indiana and Ohio. Other marketers, however, argue that going dark doesn’t provide any more clarity than precise tracking of leads through website analytics and toll-free numbers. Some say it’s also a risky strategy that could cause companies to lose a source of leads and traffic at their communities. Understanding the implications of going dark can help apartment marketers determine whether it’s a strategy that can help them maximize their marketing return on investment.
Attribution Trouble
Dark-period testing originates in the expansion in the number of potential sources and touch points from which prospective residents may have heard about a community, according to Mike Whaling, Founder of 30 Lines, an online marketing and branding firm. “If I’m a resident, I might start at Google, hit some ILSs, go to ApartmentRatings.com and Facebook, and then maybe go back to the property site,” he explains. Some of these sources might attract a prospect to learn more about a community, but then not get credit or attribution by the leasing staff or website analytics. “The idea is if there are three or four different touch points, I don’t know what’s working for me unless I stop doing it,” he says. “If I turn off an ILS for a month and see a drop in leads, maybe that’s an indication it’s driving more leads than anticipated.”
While Juleen has used dark-period testing to determine the impact of cutting out a source, he’s also used it as a way to try diverting a portion of his budget to new marketing strategies. “For me, it was more of an experiment in reallocating dollars to less expensive sources and turning off what many believe to be the ‘tried and true’ apartment marketing channels,” he says.
The new, and less-expensive, marketing opportunities presented by the explosion in the popularity of social media were the spur for Amy Siebert, Regional Marketing Director for the Southwest division of Nolan Real Estate, to try going dark on print advertising. “The costs for print were so high, and we thought we could replace those costs with better sources,” she says. “My leadership thought I was crazy at first. I said, ‘What do we have to lose?’ ”
Siebert, whose company operates 56 communities ranging from Class A to Class C in the Midwest and Southwest, cut her communities’ print advertising and helped form a team of young leasing professionals she calls the SMPs, or Social Media Players, to engage residents and boost referrals through social media channels.
“With the amount we were spending for print advertising for a community, I could buy one or two iPads,” she explains. “I could run a contest through our Facebook page and have a drawing for an iPad, and I could have just as much traffic from that as print. I said, ‘I’m going to try this and if it doesn’t work, I’ll come back.’ ”
The company hasn’t needed to go back. Siebert says her year-over-year spending on advertising and promotions is down 54 percent, while bottom-line traffic is up 22 percent and referrals are up 14 percent.
Siebert isn’t certain how many leads the company lost by going dark on print, but that’s beside the point, she says. “I’m just interested in the bottom line in this business. I could care less what I lose as long as my traffic was the same if not better.”
Shedding Light on Sources
For some marketers, however, going dark is too unscientific to provide real insight into marketing strategy. If a community is having difficulty determining if a source is failing to perform, dark-period testing won’t provide much help, says Todd Katler, Senior Vice President, Sales and Marketing, for BRE Properties, an apartment REIT.
“Assuming you have a lead attribution issue, total leads move around seasonally so much that you can’t really track the impact month-to-month because the number of leads you get is changing anyway,” he explains. “If you don’t have a lead attribution issue, then why would you utilize dark testing?”
Further, going dark for longer periods can put a community’s traffic at risk, Katler notes. “If something is working and you turn it off, you lose its benefit during the dark period. A dark period may need to last several months, so that’s a huge risk.”
While Katler agrees that human interactions are an imperfect method for recording the source of leads, companies can track leads scientifically using customized toll-free phone numbers and website analytics, he says. Walk-by or drive-by marketing sources such as billboards are the exceptions where going dark might be useful to see if the number of walk-in leads declines. However, he says, walk-in traffic counts are a highly inaccurate measure and should not be a staple metric.
Some companies might have feared the expense of such thorough lead tracking in the past, but limited budgets are no longer an excuse, says Lisa Trosien, an apartment marketing consultant.
“Years ago, before we had all the ways to track leads electronically, dark-period testing was viable but risky,” she says. Today, however, there are many accurate and affordable lead-tracking technologies, she notes. “If you can’t afford a lead-tracking service, the ILSs offer call reports as a value-added service. There’s no extra fee.”
Data-Driven Decisions
If there’s a middle ground between the two approaches, it might be this: Try going dark, but carefully, and only with the data and analytics to support any decision.
AvalonBay, for instance, has an extensive lead-tracking system. The apartment REIT uses a toll-free number on every one of its marketing sources to track the source of phone calls. “We have a high degree of confidence in where you came from,” says Michael Manfred, the company’s Senior Manager of Interactive Marketing.
But when the company determines the cost of a marketing source to be particularly high, or sees that traffic from that source is not converting to a lease at a high-enough rate, the company might cut that source and see what the impact is.
“You have to be surgical with it,” Manfred says. “If that community starts struggling, we’ll turn them back on and see what we get.”
The key is to have the data available to make such decisions, says Josh McDonald, Director of Marketing for Holland Residential, a Vancouver, Wash.-based branch of Holland Partners Group that operates 70 communities with 18,000 units. In 2008 and 2009, Holland dropped 75 percent of print advertising from its portfolio. While such a move wasn’t standard operating procedure for apartment companies at the time, by taking a look at data it had compiled through its lead management software, the company felt the new leads it was gaining through Craigslist and the ILSs would mitigate its risks.
“I would be hesitant to support dark-period testing if you did not have the data to back it up,” McDonald says. “You run the risk of dropping sources that might be producing for you. You want the risk to be calculated.”
Companies should only try going dark with marketing sources they’re considering cutting based on their data, he states. “Would you do it with a source that’s meeting or exceeding ROI goals? I wouldn’t see the potential upside [of doing this].”
Being comfortable with the ROI of marketing spending is the goal, Juleen agrees. “If you feel like you’re getting back the value you expect, then great,” he says. “If you’re questioning the ROI, I think it’s a very prudent idea to go dark for six months.”
Try reinvesting the savings in a different marketing tactic, he suggests. “A lot of people are marketing in fear,” he says. “They live in fear that if they turn it off, the numbers in the bottom line aren’t going to hit. They don’t realize if they apply the marketing dollars somewhere else, they might be more successful.
“There’s always a better way to market anything,” he says. “Unless you try it, you’ll never know.”
Jeffrey Lee is NAA’s Manager of Communications. He can be reached at jeffreylee@naahq.org or 703/797-0647.