September 29, 2017

The Hidden Costs of Business as Usual: Internet Listing Services

Posted by Jake Meador


Listing services have been the bread and butter of apartment marketers for a long time. Before the web, print listing services (along with newspaper ads) were the easiest way to reach a large number of potential residents.

Even after the internet became a staple in American homes, listing services still seemed like a sensible model: Why spend all the time and energy on building your own platform online when you could just pay a listing service?

Unfortunately, as the internet has changed that strategy has become less and less sensible.

In the first place, maintaining your own website is not as complicated as it once was. Hosting isn’t expensive. Domain names are cheap. Tools like WordPress make it easier to build websites.

More importantly, the way people find information has changed as have their expectations of what they should be able to find. In the early days, the internet worked mostly via independent websites linking to each other.

However, by the early 2000s Google had basically cracked search, making it easier for people to use search engines and get reliably excellent results. Then came Facebook, Twitter, LinkedIn, Pinterest, and the other social networks in the mid to late 2000s.

With that change, people began accessing the internet via one of two indices:

  • Search (mostly Google)
  • Social (mostly Facebook)

Social is great for more interest-based searches--hobbies, sports, entertainment, and so on. Search is great for more specific, niche sort of things--home repair help, investment advice, or something like… apartment marketing.

The result is that, whereas in the past, the ILS controlled the audience and the platform for apartment marketers, these days Google controls the audience. ILS’s are only valuable to whatever extent they rank well on Google.

What does this mean for apartment marketers?

One big point is that the listing service model is probably not a long-term solution. ILS’s are only valuable for as long as Google decides they’re valuable. But if Google starts directing people to local apartment listings pulled from data within their own system and integrated with Google Maps… well, it’s hard to see where ILS’s would fit in

Moreover, as the internet has become more accessible and as more people are building and maintaining their own websites for their businesses, it’s become more common to see apartment communities with their own websites. This is the first big hidden cost of continuing to use ILS’s even when you have your own website: You’re now competing with yourself in the search rankings.

When Google sees someone search for your community, they have to decide what is the most relevant thing to show them--the listing on an ILS for your community or your community’s website? Increasingly, it’s not unusual to see Google favoring the ILS. So you are spending money on a community website, but when people search for you by name, they’re ending up at the ILS.

This leads to a second hidden cost: Think about pricing. If you have ten options to choose from and they all look similar, how do you decide what to buy? You look at price. On the other hand, if you see a single product and you really really want it… you probably don’t mind paying a little extra, right? (How many of you are reading this on an Apple product?)

Higher prices come from differentiation. If you look uniquely valuable to a prospect, you can charge higher rent. On the other hand, if you are lost in a pile of a dozen different properties they have visited… well, you’re probably competing on price--which is going to drive that rent rate down.

Of course, there’s another hidden cost that follows from the competition issue. With the ILS, you probably are getting fewer leads too. Why is that? Well, you only are going to have so many people looking for an apartment like yours in a given month. If the people looking for it find your community site via a Google search, then a lot of them are likely to convert into leads, provided they are the right sort of prospect.

On the other hand, with an ILS even the right prospects are still going to be seeing you and a bunch of other properties. So you’re not only losing the bad leads that are never going to rent from you. That’s great. You want those leads to go away. You’re also losing leads who would rent from you, given the right marketing experience.

But because you’re doing all your marketing alongside other communities on the listing service, you can’t really stand out in the way you need to. So some of the leads that should be coming to you are going elsewhere.

There is one more point to make with all this: Suppose you’re having a hard time getting the leads you need. The ILS might offer to bump up your package to a “premium” level for a higher price. What will “premium” get you? Well, it will probably get you AdWords campaigns. But where will those AdWords campaigns send people? To the ILS website.

In other words, you can pay more money on top of what you’re already paying to simply give more people the same mediocre experience that everyone else is having. So you’re paying more to get fewer leads than you could on your own site and to get more leads who won’t pay as much in rent.


We looked at four particular hidden costs of working with ILS’s as your primary marketing channel. First, ILS’s will take away traffic from your own community website. Second, ILS’s will generally produce leads who pay lower rent rates. Third, ILS’s will produce fewer leads. Fourth, ILS’s don’t have a great premium strategy for when you’re in a marketing emergency. The strategy is just “give us more money and we’ll send you more mediocre leads.”

And we should be clear on how these issues can add up in the real-world: If you have fewer leads, you have less product demand. Less demand means a lower price. Moreover, if your marketing strategy is producing leads who already don’t pay a high rent rate and now you’re also reducing demand, that will cause the price to drop even more. And those drops can add up!

If you’re a community with 150 units and all your units are renting for $15 less than market rate, you’re missing out on $2,250 every month! Over a full 12 months, that’s $27,000! And this is a relatively modest example--if you have a larger community, some vacancy, and the rent rates are similar or even further beneath market rate, then the losses are greater.

The trouble, of course, is that because ILS’s are “normal” in our industry, most people don’t notice these costs. We’re used to operating at certain occupancy levels, charging certain rent rates, trying to work with a limited number of leads. We don’t know there’s an alternative so we don’t know that what we’re experiencing is normal. And we don’t know that there’s a better way.

Download your free eBook now!

About Rentping

Rentping is an apartment marketing agency that helps you do big company marketing without a big company budget. See our solutions to learn more.

Our articles are free to share! To learn more about sharing with your association or company, see our Citation Rules.

Learn More