Facebook Changes the Rules for Real Estate Ads: What Happened, Why it Matters and How to Update Your Targeting Strategy

September 11, 2019

Earlier this year, Facebook released an announcement in response to Facebook’s ad targeting options being misused to discriminate against people based on race, color, religion, national origin, gender, disability and family status.

With a number of lawsuits piling up against the company from housing groups, Facebook decided to change the system to prevent real estate professionals, landlords and others from discriminating with Facebook ads.

Sheryl Sandberg, chief operating officer at Facebook, explained that protecting people from discrimination is a top priority. In light of this, Facebook made three major changes in how they manage real estate, employment and credit ads to ensure Facebook’s platform could no longer be used to discriminate against certain protected classes. Facebook will no longer allow advertisers to target by the following:

  • Age: A default option of “18-65+” will be required.
  • Gender
  • Zip Code: Also known as micro-targeting based on neighborhoods

Additionally, the Facebook lookalike audience will no longer take into consideration the above when modeling audiences based off a seed list.

Impact of Facebook’s Recent Ad Changes

While it’s too soon to tell what the impact of these changes will be, the ramifications of these targeting adjustments have the potential to be far-reaching for digital marketers. On the flipside, targeting advertisements based on gender, age and zip code seemed to be more effective in the past than they are today. Smaller businesses and advertisers may have already experienced struggling campaign performance due to these outdated advertising methods.

Facebook Targeting for Real Estate: Alternatives to Test

It’s important to recognize that while Facebook is making major changes to its targeting capabilities, it also continues to make major advancements with machine learning that allow for broader audience targeting. Here are some audience suggestions that can be tested to help improve performance.

Target Facebook Audience by Intent

Rather than targeting people over a certain age, qualify users that have a higher intent to purchase a home:

  • Target the real estate listing sites they are browsing such as Zillow, Realtor.com and Redfin. These can be found in the interest-based detail targeting audiences within Facebook Audience Insights. Just remember to exclude anyone who might be an employee of these companies to reduce wasted spend on the wrong audience.
  • Utilize the detail targeting audiences that are interested in home buying (“Starter Home” or “House Hunting”) or indicate that the user is about to apply for a home loan (“First-time Home Buyer Grant” or “Mortgage Loans”).

Leverage Machine Learning for Geo-Targeting

Instead of focusing on a narrow geo-targeted strategy that relies on the potential home buyer currently living in that location and not necessarily wanting to buy in that location, focus on entire cities or a DMA. Facebook’s machine learning capabilities are designed to find the user who is most likely to take a desired action based on multiple signals. By limiting the data available, those signals become harder to find and interpret. And while you can’t target a zip code anymore, you can still target a 15-mile radius around a city, address or pin-drop, if needed.

Use Facebook Dynamic Ads for Real Estate

Even though this is a creative feature, the ads are extremely relevant because they are created based on the content and pages people have visited on your website. In a recent campaign The Search Agency’s paid social team ran for a client, this tactic helped boost offline activity by 76 percent (driving interested buyers into a model home) at a 4x more efficient CPA than other Facebook ads – in just two months. If you’re already running Dynamic Ads for Real Estate, pair these with a full funnel approach by launching campaigns that will drive more users to your website to continue fill that pool.

Facebook intends to roll out these ad targeting changes by the end of the year. While this complete overhaul to Facebook’s ad targeting options is certainly noteworthy and has the potential to negatively impact unprepared real estate professionals and digital marketers, we hope the suggestions we’ve outlined here will help you pivot your targeting strategy and position you for continued success in your Facebook marketing efforts.

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