Do More Deals with Better Marketing with Daniel Barrett, Part 1
Dan, thank you for joining us.
Thank you for having me, man. I’m looking forward to it.
I’m excited to talk with you. We’ve been talking here for a while. I was trying to do that with the guests, but yeah, this is an exciting topic because we’re talking about really the forefront of building a business, really in what’s going on with PPC.
Pay-per-click. SEO and general online marketing right now, specifically with a focus on what that means for real estate investors. For our listeners out there who don’t know about you and your business. Can you tell us a bit about what you do and then let’s dive into what we’re gonna discuss.
Yeah. Sure.
I run a company called ad-words nerds, which is over at adwordsnerds.com. We do online marketing for real estate investors. So investors are our only clients and we do pay-per-click advertising search engine optimization, website design, basically anything you need. Deals online. That’s what we do.
And yeah, man it’s been a fascinating ride. I love focusing on real estate and real estate investors specifically because it’s a relatively small world, and it’s a, it, there aren’t a lot of companies out there that do what we do. And so we really get to be, I can always say, like we have one of the biggest data sets on real estate investor leads outside of Google.
And that can be true, right? I think last time we checked, we managed about $5 million a year in ad spend. And it’s that gets us a lot of data in one place. It’s very focused and we get to play around and explore this very weird part of the world, which is real estate investing. So yeah, it’s fascinating.
I really enjoy it. Awesome. I love that. And as we were discussing before the show, I really want to keep it. Our conversation centered around either the current status of the market and kind of maybe a grad level course while we’ve got you. But I want to make sure we cover the basics real quick on what is pay-per-click advertising, what that means for folks out there who might not know you’ve seen pay-per-click ads, but you might not know what that means.
Yeah, so pay-per-click it’s interesting because people will use this term interchangeably with a bunch of different stuff. Technically all pay-per-click advertising means is you are advertising online on some sort of advertising channel where you get billed or you get charged when someone clicks your ad.
So if you run an ad and nobody clicks on it, you don’t pay anything. Bunch of people click on it. You pay a certain amount for every single one of those clicks. Now, the way people use it, especially in real estate investing, I’ve noticed that the way people use this in casual conversation is they are usually talking about Google advertising and specifically Google search ads.
So you go on Google, you type in, sell my house or something. And For typically entries in Google are going to be paid advertisements. And if you click on one of those, you go to somebody’s website, that’s a pay-per-click ad. Technically two Facebook ads are also pay-per-click ads. YouTube ads are also pay-per-click ads, Bing ads on.
I always say being asked, they’re technically, they’re called Microsoft ads now, but I’m going to say big until I die. Cause I’m old school like that big ads are pay-per-click ads. So anywhere where you’re running one of these ad channels where I clicked something. And then that’s when you get charged, that’s what a pay-per-click ads.
Do More Deals with Better Marketing with Daniel Barrett, Part 1
I love focusing on real estate and real estate investors specifically because it's a relatively small world, and it's a, it, there aren't a lot of companies out there that do what we do. And so we really get to be, I can always say, like we have one of the biggest data sets on real estate investor leads outside of Google.
Perfect. I love that. And my heart goes out to anyone who feels compelled to use Microsoft Edge, because you need to get with the times and use something else.
But every day, almost every day, an investor will come to me and say, Hey, like I’m thinking like, I think really old people I’ll use big.
So I could, we advertise on being and like, and I’m like, yeah. Also everyone else already had this idea. It’s a good idea. Everyone else already had it. Let’s not poop. Poop. Big things have come a long way. They’re not bad. There they are a distant third. Yeah. That’s not bad. I’ll give him credit where credit is due.
All right. Fair enough. But, before we were on recording, you were telling me about some of the more recent changes in the markets, specifically around real estate investing and generating leads as a real estate investor. And I love learning about that and I think it’s going to also tie into.
Broader more recent broad changes with Apple iOS and Facebook and all these things around tracking individual users and targeting them with ads. Let’s break into that and talk about at least some of these basic ideas around the change of market, and then get a little more deep.
Yeah.
Yeah. So you give a little context, right? So I’ve been doing real estate investing marketing for about 10 years. Like almost exactly about 10 years now. And I was doing online marketing before that for local businesses, right? Like I would say like my target market is. Local business, which is the worst possible target market.
If anyone was to start a business, that makes no sense. So anyway, I’d been doing ads and SEO and all this stuff for dentists and pizza places. And then I got into real estate investing. Real estate investing was very weird, right from the outset, but the basic approach worked.
Was really targeted keywords really focused on the highest motivation level stuff. And really zeroing in on where the best quality leads were going to be. And that produced really good results. Like the cost per deal acquisition was quite good. We could consistently get deals for our clients, great. And that was the case. Continued to be the case. For pretty much like eight years or so. So that whole period where I was getting started, it was a particular type of industry that we’re operating in. We were talking about before I was saying it, there’s this book out there called breakthrough advertising by Eugene Schwartz.
You just Google it. You can find it. It’s expensive. It’s like only one person keeps it in print or something and they’re jacking up the price worth it because yeah, the old book. Yeah, from the, I want to say it’s from the forties might be from the fifties or early sixties, but you want to think like mad men, era marketing guys, and shorts was one of the. Really influential early direct response, marketers, copywriters, really thinking about what makes marketing work and why certain types of marketing work in some markets and on Netflix? And he had this really famous, I think it’s a five tier classification system for different markets.
And at level one is essentially a market where the consumer or the customer, the client, whoever is unaware of the solution that your company offers. So the example that is often used is if you are the first person, the first company to invent a diet, all you have to do to sell it.
Assuming that’s something that people want is you approach the market and say, I have invented a diet pill. It is a pill diet in a pill. Essentially. Describe what the product needs and people are like, wow, that’s amazing. I’ve never heard of a pill diet in a pill. That’s incredible. And that’s it. Minds are blown people line up around the block.
You’re selling your diet, right? So that is a level one. And if you look back at the history of real estate investing, you think real estate investing as it exists today, the sort of classic, I say everything from what you do, right with syndication and more sophisticated type deals all the way down to.
I staple guns though. We bought houses, signed the telephone pole and I gotta do it 40 feet up. So people wouldn’t tear it down or whatever, and everything in between that wonderful spectrum of real estate investing, that’s really from the late seventies and early eighties, where that starts.
You start to get people like Carleton sheets, it’s doing what, big tape sets and stuff and the sort of the OGs in our space. And so that’s where that industry starts. And that industry, since that period, till basically a couple of years ago, Absolutely a hundred percent, this level one type of market as described by YouTube, right?
All you have to do as an investor is approach a seller and say, I am a real estate investor. And what that means is I will buy your house. You won’t have to do the paperwork and blah, blah, blah. You get the whole pitch. It’s super fast, super efficient. It’s just. What are the services? And so if you look at the marketing that investors do and have done for decades now, what is it?
I write a yellow letter, the yellow letter says, I want to buy your house. And so it was like, wow, a total stranger wants to buy my house. It’s amazing. Or you send a postcard, the postcard says we buy houses. It’s literally just literally exactly what it is. You look at like the average month of investors, but their company is called.
We buy houses, Utah, we buy houses, Columbus, like it’s just the description of the business. So level one more level of industry. Now, what happens is when a level one industry starts to seek significant competition. And I would argue that sometime in the past three to five years, this is what occurred for real estate investing.
You had if you look at things like real estate investing, coaching, those companies are blowing up, right? Everybody from fortune builders to people that I’ve worked with that I really respect like Tom Kroll, who does wholesaling. All these companies are doing seminars and blah, blah, blah. They are pumping out new investors at the street level.
You have. Literally entire television networks that just show people flipping houses, at two, whatever hours a day, I can turn on a TV and watch somebody debating whether they should put tile in the kitchen or whatever, and how that’s going to affect a resale value and all that stuff.
So it’s you’ve got that. It’s just entered the mainstream consciousness in a way that. Has never been the case before. And you have this absolute, like massive proliferation of people doing marketing and direct mail and text messaging, literally investors, text message. So many people are buying their houses.
That text message marketing is going to be regulated out of existence. Like as of this recording, right? There’s a lot out there. It’s saturation. Now when they level one market, according to Schwartz, right? Hits that saturation point, you transitioned to a level two market or industry, and a level two market or industry is dominated by the need for differential.
It’s not just, I’m a real estate investor. I will buy your house. The conversation becomes many people are offering to buy your house. Here is why you should choose me. You should choose me over this guy, that guy, this woman, that woman, you need to choose me over. Other than that is a question of differentiation and in a market that is predominated by the need for differentiation.
The market is very. If I was going to like, when I, and I’ll give an example from my best tricks, this applies to any business, not just real estate, but in my business, when I got started doing online marketing for real estate investors, what did I say? I say, I do online marketing for real estate investors.
And they were like, oh, what for me? Yeah. I’m amazing. Right now. Keep in mind, like in the agency space, the marketing agency space, that’s different. I do online marketing. A lot of people do online marketing. I do it for real estate. That makes me different. I put myself in a category by myself, marketing for real estate investors for a long time.
That’s all I needed to do. Now when I start sales conversations or marketing conversations with investors, what I say is. You and I both know, you’ve seen like 500 ads telling you that you’re going to do your marketing and you’ve got 500 people saying they want to do SEO for your website. And you’ve got 500 people saying they can do PPC for $10 a day or whatever they say it’s going to be.
And I’m like, that’s all great. I’m sure all of these people are absolutely wonderful people. I’m sure they’re great. I want them to feed their families. It’s going to be wonderful. I work with sophisticated investors who know that $10 a day to do their marketing is a terrible investment. So it’s again, I’ve got to differentiate myself again within the pack room right now to bring this back to real estate investing in like why I’m doing this whole rigmarole and going through this whole thing.
Because of. For one, I think it’s very important for anybody in any industry to understand the history of their industry. Because if you don’t understand your history, you don’t understand your future. But purely in real estate investing and bring this back to like brass stacks down at street level.
What that means is when you contact a seller, a potential seller might want to sell their house, might want to, go under contract with you. The conversation you are entering into is profoundly different. It is a conversation here that is why you should choose me rather than Zillow, Trulia, Opendoor, OfferPad knock, and the 50 other investors that contacted you then.
Heaven forbid you’re contacting one of these poor people that are on a list that have made their way onto a list of no potential motivated sellers. They are getting crushed, completely inundated. So it will sell to me. I’m like, It becomes cell to me, I’m like you, we have something in common, right?
It will sell to me. I’ve declined. For example Al Alex van. Brooklyn’s a great investor, a really talented building, an awesome team in a very crowded market. They’re selling in the Maryland market. Are they buying the Maryland market and really creating a lot of investors? And he leans into the fact he’s a veteran.
They do a ton of work with vet and vet veteran focused charities. He leans into. We are an ethical company. We are building a business, a brand that’s going to be here for 10 years, 20 years, 50 years. Here’s how we’re giving back to the community. He focuses on that because his calculus, which I would argue is correct, is if you’re getting.
10 emails from buy house, fast cash.biz/maryland. And you’re going to want to go with this guy who lives near me. He’s a veteran that cares about my community. He, his team’s got a bunch of pictures on the team, it’s like it, it just makes it a different experience.
Differentiate. That whole industry shifted to a differentiation focused industry. And 99% of people haven’t realized data. So to me, this is the first time in the history of the industry that I think investors. I have always poo-pooed social media for real estate investors.
I’m like, who cares? I’m like, if I’m a motivated seller, I don’t care that you exist before I’m motivated. And I don’t care after I sell, I only care for a very short window. Like the refractory period on motivated sellers, very short. So I’m like, who cares if you’re tweeting, I just need you in the moment.
I’ve completely changed my tune on that over the last couple of years, because now I really do think it really does make a difference. If you have been showing up month over month before I needed you, because now we have a relationship there’s a reason to sell to you rather than any anyone else. So to me, when I look out at the landscape of marketing real estate investing, what I see.
Is an industry that’s in the middle of a profound transition, a transition that real estate agents or realtors, or all these other people in real estate in general had to go through decades ago. We are just going through now, right? I’m like, there’s a reason that real estate investors never did the refrigerator magnet calendar thing with the realtors, like face on it.
And he’ll call me in three years when you need to sell this house. The reason they’re doing that is like very. Market number two. And we were in the market. Number one. It never mattered to us now in maps. Like I’m not saying go invest in fridge magnets, but what I am saying is no, the industry you’re in right now, the market you’re in.
That’s the big one. There’s a whole bunch of tech transitions happening. We can talk about that too, if I have a takeaway for you. It’s understood that relationships with clients, sellers change over time, depending on how saturated or unsaturated your market is, regionally, you could still be market one.
You regionally could have been market two, a decade, right? But no, the market you’re in, because that will help you dial in the type of marketing you need to be doing and it’s going to be, make everything you do much more effective.
When I look out at the landscape of marketing real estate investing, what I see.is an industry that's in the middle of a profound transition, a transition that real estate agents or realtors, or all these other people in real estate in general had to go through decades ago. We are just going through it now.
Yeah, absolutely. And I’ve got so many questions about it, but really I want to make sure we cover while we’re here.
Folks have almost certainly heard in the news that recently Apple changed. Some stuff with iOS and basically Facebook is no longer able to, I don’t know, use your camera to look at you whenever they want whatever they were doing.
Yeah. Zuckerberg is no longer allowed to, he doesn’t have the right of prima Noctis or whatever.
But that’s really what I want to learn about from your perspective. Because I’ve heard about this left and right. And yeah, I understand his privacy so on and so forth, but what that really means as far, from an advertising perspective goes what changes have you seen that.
Yeah, this is, so this is absolutely fascinating. And I will be the first to say just to put this out there, right? Because this is what I do. It’s what I pay attention to every day. And I’ve thoughts. I got a lot of thoughts and opinions, but I will. I said this to you before we jumped in the car. I say it now, anybody who says they know exactly where all this stuff is going, it’s just completely full of it.
Nobody knows where this is going right now. We are in the middle of a really big sea change. Because it is outside of real estate investing just in the way that these advertising platforms work. And you also got to remember, like Facebook has a population of it’s if you put China, Russia, and the United States together, it’s four times bigger than that.
It’s man, these are massive. Companies on a massive scale
That almost everybody on the planet that’s basically. Yeah.
It’s like whether you know it or not, you got one. And it’s a weird environment to be in. I don’t think we really understand the dynamics alleyway, but this is really important to understand.
So I will back up, I will give a little context and then we’ll get right into the iOS changes. Because I do, I want people to have practical takeaways. I do have some practical takeaways for people. Sort of backup, right? What makes Facebook different from Google? In terms of advertising, because Google was the advertising leader for a long time, they had complete market domination.
Facebook punched them in the face. They’re still close, but Facebook beat Google in the advertising game. And if you think about it, it’s really weird because what made Google effective was Google was able to show you ads. Based on what you search for. So I always say if you’re used to, you’re a real estate investor, you used to direct mail.
Okay. So let’s bring this back. Where are you used to? I’m used to building a list, sending out a bunch of postcards, sending out letters or whatever. And I say, okay, in that situation, What do you know about the people you are mailing? Depending on the list, maybe you’re sending based on how much equity they have or, oh, this person, people got all these things like, oh, this first person has zoning code violations and I’m going to mail them.
Or they’re multifamily owners. Something about them, their demographics, their psychographics, their income or whatever, but you don’t know if they want to sell. You just know the type of person they are in Google. And Google. I have no idea who you are, but I know you’re interested in selling.
And the reason I know that is because when you type in Google, you go on Google and you take, I want to sell a house. They’re like, great. All I know is that person typed in, I want to sell a house. It’s probably a pretty good bet that they got a house they want to sell. Otherwise they wouldn’t type it in, I don’t know if you’ve typed that in for fun lately, but I haven’t.
So I don’t know anything about you, but I know your intent. That’s what made Google powerful. If I type in air Jordan’s price, the intent is I want to buy some air Jordans. I want to know the price. So that’s an incredibly valuable way to target advertising. You put it in front of people with the intent to buy it.
That’s what made Google, the monolith that they were in terms of online advertising. Facebook is much closer to direct mail than it is. Facebook works on an algorithmic basis that pulls from data that’s based on your demographics and psychographics. So what does that mean? Basically what it means is everything that you do on Facebook.
So people always remember oh, I like the page for air Jordans. Yeah. But also you surfed on a website about air Jordans, and also based on your age, your race, your location in G the universe the types of friends that you have and the things that they like, and the fact that we know X about your income and you drive this type of car, there’s a 14% higher chance that you’re going to buy air Jordans in the next six months.
And they’re using deep learning, machine learning, AI, whatever you want to call it, to mesh all these little data points together and basically predict what you might be interested in. That’s how Facebook works. And as that algorithm has gotten stronger and stronger and better and better at actually predicting behavior.
They are able to show ads in a very effective way. So for example, I would say this I’m a mark for advertising and absolute Rube. Okay. I will buy any stupid thing you put in front of me provided itself a certain number of things. So they’re like, okay, I can see you got, these kinda like black rimmed horn-rimmed glasses.
You’re a bald white dude with a beard, you’re wearing a black t-shirt, I could see you got like a moon Knight comic book in the background. Yeah, you’re probably gonna want the special whiskey amongst the subscription box. And I’ll be like, yes, I do. Because there just aren’t that many types of dudes in the world.
And so we all like the same stupid stuff and they got really good at Purdue. If you listen to Metallica, you’re probably gonna like Megadeth or whatever. And they just got really good at making those predictions. That’s how Facebook works. So on Facebook, I don’t know your intent, but I know a ton about it.
And it’s indirect, like as an advertiser, I don’t see that information. I just say, give me the people that are going to like Megadeth and Facebook will figure it out now. Okay. The reason I’m giving you that whole context, that whole system is based on an understanding that understanding is. They get to see what you do.
They get some way of tracking your behavior on your phone tracking behavior across a network of websites that advertise on Facebook. So if I advertise on Facebook, I’ve got to put a Facebook pixel in my website code. That’ll let Facebook know when people go there. That gives them data about the type of stuff that I like.
If I went on lego.com and they advertise on Facebook. Now Facebook gets some data about what I did on their website and he knows I like LIGO. And that puts me in a certain situation. 42 year old white dude who likes Lego. They’re like, okay, cool. You’re a dork. No one likes you. You go in that, you probably get the social skills course or whatever.
And so they’re putting me in the bucket, it all hinges on the understanding that Facebook gets the data about what you do. There’s a great saying right online where it’s if you didn’t pay for the website, you’re the product. Absolutely. So you’re the product on Facebook, all your data. So in any case, That makes people uncomfortable.
All right guys, that was part one of a two-part conversation with Dan Barrett from AdWords nerds tune in tomorrow for the second part where we’re going to discuss recent changes or how those, how the recent changes in data sharing David data privacy had impacted. Investors have impacted advertisers like Dan, he shares specific information about how this changes to data sharing specifically that apple has implemented have impacted his ROI on ads on Facebook.
Really interesting. And I love that he’s bringing actual data and numbers to us. We also talk about the ethics of making that decision and what his thoughts are as somebody in the industry who benefits from it. They’re at least benefited from the lack of privacy controls and MSI benefiting. Now, I don’t know.
We’re gonna, we’re gonna talk about all that. So tune in tomorrow, look forward to seeing you then if you haven’t yet, and you’re an apple podcasts user, please take a quick second and leave us a rating or review on apple podcasts. Five stars would be so much appreciated, helps other people learn about the show and helps us rank higher in the apple podcast ecosystem.
I’m always honest with you guys that gives me warmth and fuzzies. Cause I get to see that you’re engaging with the content and you’re escaping the wall street casino along with us. Once again, I’m your host Taylor lode. I’m a real estate investor, real estate syndicator. And I’m looking forward to seeing you right back here tomorrow.
Talk to you then.
Adword Nerds
About our Guest
Daniel Barett
Dan Barrett is the founder and Head Nerd at AdWords Nerds.
His unique approach to finding motivated sellers – combining online marketing best practices with rapid data collection and intense focus – helped dozens of clients grow their investment businesses while spending less time on their marketing.
Today, Dan’s focus is on research and development – finding the next big online marketing channel for investors. He also runs the REI Lead Gen Mastermind, a high-level coaching program that teaches investors the skills they need to market online.
Episode Show Notes
Dan Barrett is the founder and Head Nerd at AdWords Nerds. His unique approach to finding motivated sellers – combining online marketing best practices with rapid data collection and intense focus – helped dozens of clients grow their investment businesses while spending less time on their marketing. Today, Dan’s focus is on research and development – finding the next big online marketing channel for investors. He also runs the REI Lead Gen Mastermind, a high-level coaching program that teaches investors the skills they need to market online.
[00:01 – 05:03] Opening Segment
- Get to know Daniel Barrett
- Dan talks about AdWords Nerds
- Why Dan likes to focus on real estate and RE investors
[05:04 – 11:31] The Advertising Market Today
- What is pay-per-click advertising?
- Changes in the real estate advertising market
- Dan shares his experience in advertising
- The Breakthrough Advertising Book
[11:32 – 20:43] Marketing for Real Estate Investors
- All you have to do as a seller
- “Here is why you should choose me!”
- Being different and offering unique but relatable services
- We’re in a Different Market and Here’s What You Have to Know
[20:44 – 32:50] Facebook and Google Advertising
- Quick break for our sponsors
- Groundfloor offers short-term, high-yield real estate debt investments to the general public. Check www.passivewealthstrategy.com/groundfloor/ to get started.
- The changes with Facebook, Google, and iOS advertising
- “Nobody knows where this is going right now.”
- Facebook versus Google
- If you don’t pay for the website, you’re the product
Resources Mentioned:
Tweetable Quotes:
“Know the industry you’re in. Know the market that you’re in.” – Daniel Barrett
“Relationships with clients to sellers change over time depending on how saturated or unsaturated your market is.” – Daniel Barrett
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Connect with Daniel Barrett through LinkedIn. Visit their website https://adwordsnerds.com/ and listen to his podcast REI Marketing Nerds.
Invest passively in multiple commercial real estate assets such as apartments, self storage, medical facilities, hotels and more through https://www.passivewealthstrategy.com/crowdstreet/
Participate directly in real estate investment loans on a fractional basis. Go to www.passivewealthstrategy.com/groundfloor/ and get ready to invest on your own terms.
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