In the last decade, the multifamily market has experienced hyper-growth in a number of key areas: overall renters, average cost of rent for residents, and new building projects.
But that all changed in early 2020 when the US economy experienced a dramatic slowdown as measures were put in place to contain the public health outbreak of COVID-19. This resulted in immediate, unprecedented impacts on the multifamily real estate industry, including substantial changes to leasing activity, operations, and behaviors of renters. It also forced several businesses to change their marketing playbook in an effort to capitalize on new opportunities and, ultimately, come out stronger on the other side.
We have worked with our clients in the multifamily space, ranging from conventional apartments to active adult communities and everything in between, to adapt quickly, but our main goal has been to ensure that we’re prepared for what’s to come—and be certain that the changes we make today will make a measurable impact on our marketing plans for the future.
From new customer-first digital strategies to emerging trends in data privacy and compliance, here’s what multifamily marketers can expect for the remainder of 2021 and beyond.
Customer Experience: Rise to the Challenge of Changing Expectations
Today’s consumer has gotten used to a digital-first experience from brands across nearly every industry, and real estate is no exception. Prospective renters expect a highly personalized, seamless experience when they interact with your brand—across every channel and at every stage of the customer journey.
With that in mind, here are a few important ways multifamily marketers can rise to the occasion and deliver tailored, customer-first experiences to generate stronger brand loyalty and growth:
- A shift to virtual tours & self-guided showings: Virtual and video tours have emerged as the foremost strategy in bridging the conversion gap for people who prefer to lease 100% virtually or cannot visit a property in person. Now that the pandemic has forced real estate businesses to adapt and adopt this technology, we can expect the use of video and even AR or VR experiences to continue to grow. Soon, these assets will come to be expected by prospective renters, and brands who fail to provide them will quickly fall behind their competitors
- The explosion of online video ads: The expanded use of video tours will also pave the way for the adoption of other video asset creation, including video ads. Thankfully, video assets are easier to create than ever, and there is a much lower barrier to entry for video creation and dissemination, from cost to technological know-how to channel-specific tools and targeting, for brands new to these strategies. Plus, with social media platforms thriving in a moment of increasingly virtual social habits, capturing attention on these platforms with the use of more engaging ad types will pay off.
Peak Leasing Season: Prepare for Booming Demand
As we enter the spring season, and consumer confidence in the distribution and efficacy of the COVID-19 vaccine increases, we predict a bustling leasing season. To make the most of this busy period, property managers, leasing teams, and marketing managers need to be ready for increased demand and commit resources that encourage lease renewals.
While the pandemic has changed the way typical leasing season operates, the best practices for successful leasing remain the same. Here are some of the top strategies that will give your team an edge, before and during the peak leasing period:
- Create descriptive, enticing ad listings: Great listings lead to more prospects and increase the likelihood that you’ll fill your vacancies as quickly as possible. It’s important to be very thorough with unit descriptions, photos, and videos to achieve success. Consider hiring a professional photographer to capture your spaces and deliver high-quality images. If writing isn’t your strong suit, seek the assistance of a freelancer or marketing agency to ensure your properties’ messages are informative and compelling. Lastly, make sure to test CTAs in your ad copy, track the tenant journey via new events and landing page experiments, and build out more refined audience lists to use in the months ahead.
- Open up your retargeting windows: An effective marketing strategy involves periodically reviewing your retargeting campaigns to make sure you’re hitting your volume and performance goals. An important part of that is setting the right lookback window for each of your audiences. With spring leasing season directly impacted by shelter-in-place orders, it’s more important than ever to stay top of mind for prospective residents as they get more comfortable and confident about moving to a new space. One tactic to increase your campaign’s reach is lengthening your lookback windows from the typical 30 days to 120 days. This will allow you to retarget your audience for greater lengths of time and increase your impression volume as the busy season sets in.
- Prioritize messaging that goes against the grain: As competition builds in our increasingly saturated market, and properties struggle to attract new renters, new developments and existing properties alike will be forced to differentiate themselves from the competition. We expect to see real estate properties put more thought into brand development in 2021 as they work to captivate their audience with a compelling brand story. Likewise, amenities offerings and the messaging surrounding them need to be more innovative. For example, the buzzword “luxury” will likely lose all meaning as a wave of COVID-impacted renters search for more down-to-earth and affordable properties.
Full-Funnel Growth: Lead with the Customer
While Americans flocked to megacities in the 2010s, causing rent prices to soar, 2020 marked a major shift to Sun Belt cities and suburbs. In fact, the five metro areas that have seen the largest growth in renters are all cities located in the Sun Belt: Dallas, Houston, Miami, Atlanta, and Phoenix.
All of these cities have something in common: they’re modern cities with large, sprawling metropolitan areas resembling suburbs, as opposed to traditional American hyper-urban megacities like New York City, Chicago, Washington D.C., and Boston.
But as many large companies announce their tentative plans to return to offices in late summer/early fall, multifamily marketers need to start capitalizing on full-funnel strategies for markets that were hit hard by renters leaving big cities, as people consider returning. Here are some basic steps to help you prepare for this new wave of returning renters:
- Generate awareness: Boost awareness through local SEO, pay-per-click campaigns, content marketing, and email marketing. The wider the net, the more fish you can catch.
- Pique interest: Having a user-friendly website with high-quality photos and videos can help your property stand out. Google Analytics reports can help you understand every step prospective renters take as they explore your website. You can identify high-performing pages and zero in on the pages that still need improvement.
- Uncap budgets: Get ready to turn the faucet on and spend more on digital ads for the next couple of months. You will need to have enough ad dollars budgeted to run creative ads that promote your brand identity, remarketing campaigns that keep your properties top of mind, and effective SEO campaigns that allow you to compete effectively in your core markets.
- Inspire action: Prospects who have made it this far often just need that final nudge: a compelling CTA (think about combining with a promotional offer like waiving an application fee or a discounted deposit) can be the deciding factor to push them over the hump. Access to e-applications and digital signature options allow tenants to sign the lease immediately after viewing, giving you a competitive edge over less savvy properties. Remember that this is the time of year that the extra investment can really pay off.
Return to Normal: Real Estate Will Rebound
As 2021 barrels on, we anticipate people’s desire for a sense of normalcy to peak as the new year approaches. While a typical seasonal lull is still predicted for Q4, we did see 2020 end on an upward trend of low CPCs and increased search volume. It’s crucial that multifamily businesses play to their strengths during this time by maximizing efficiencies in their budgets and promoting any available concessions. While planning your next move, it’s important to keep these factors in mind:
- Understand, analyze, and track your marketing ROI
- Knowing which marketing channels bring in the most renters can set you well ahead of the competition and help you fill vacancies faster. When considering how to spend your marketing budget for each property, be intentional about where you allocate ad dollars and track whether or not those channels attract renters.
- Improve lead attribution to elevate your marketing efforts
- Accurate lead source attribution (knowing what specific actions or sources impact the number of leads coming in for a given property) is absolutely critical for understanding which channels or marketing strategies are influencing tenant behavior. With more visibility into the tenant journey, marketers can prove their impact and ensure that data-driven optimizations are happening regularly and strategically.
- Respond quickly and efficiently to incoming leads
- According to a study by Zillow, 71% of renters who ask property managers about a listing expect to hear back within 24 hours. This is why it’s important to streamline your workflow to ensure your team is as responsive as possible. Utilizing machine learning and artificial intelligence (AI) is an excellent way to improve response time and free up your team to focus on providing higher levels of service to more serious leads.
On the horizon: New data privacy regulations will emerge, forcing multifamily marketers to adapt
Data privacy has been a hot-button issue in the last few years, and we can expect privacy regulation to become firmer and better enforced in 2021. More specifically, here’s what we can expect on the data privacy front for multifamily and real estate marketers:
- As data privacy concerns rise, we can also expect further regulations on what data can be collected about a prospective tenant and how that data can be used. This will inevitably affect the options available for targeting when it comes to advertising.
- Google and Facebook adjusted their ad targeting capabilities last year for housing ads after facing legal pressure to bring their advertising platforms more in line with the Fair Housing Act. Although these adjustments have reduced the potential for inequitable housing outcomes, there is still more that can be done to ensure equal access to websites, housing ads, special rates, and more. We can expect to see more explicit regulations emerge in the coming year, especially with Web Content Accessibility Guidelines (WCAG) 3.0 scheduled for release this year.
- Platforms will likely begin removing the capability to target specific audiences or demographics to avoid liability for advertiser violations. Likewise, tier 2 vendors such as Geofencing, TikTok, and others will begin thinking about how they are compliant as they see the large media vendors such as Facebook and Google facing legal pressure to comply.
- Large media organizations such as Facebook and Google will potentially face governmentally-demanded breakups, especially in areas where they sell both ad placements and ad auctions of advertisers. This evolution may lead to the need to manage multiple platforms that were previously consolidated in a single place and increase the time and effort to run digital marketing campaigns.
What’s Changing Now: Introduction to Google’s Federated Learning of Cohorts (FLoC)
In early March, Google reiterated that its web products will be driven by the Federated Learning of Cohorts (FLoC) API. With FLoC, Google will utilize first-party data to probabilistically generate cohorts aligned with modeled interests and propensities. Advertisers will then be able to target their ads to these cohorts, rather than the individual user.
What does this mean for your property?
Google will still technically be able to deliver targeted ads, but do so in a more anonymized, less creepy way. Additionally, the changes are expected only to cover websites visited via Chrome and do not extend to mobile apps.
While remarketing within the Google ecosystem will theoretically be unaffected, the future of cross-channel remarketing is still an open question. We think it’s likely it will still be possible through another Google Privacy Sandbox proposal called TURTLEDOVE, based on the same kind of probabilistic modeling.
How do we move forward?
First-party data is definitely going to become more important regardless of the path that advertisers and ad tech platforms take. Businesses need to make investments in capturing user information early in their journey and look to diversify the methods we’re using to engage them.
Those that find a way to capture that information successfully will ultimately prevail and successfully reach the right audiences. Don’t just collect emails with promotions or late-stage offers; instead, explore how to build community and value propositions that incentivize email collection across the customer journey. Interactive virtual events, activities, and access to other community-focused incentives should be a major focus for brands across verticals prioritizing first-party data.