The national apartment market is predicted to grow by over 450,000 units in 2019. According to Fannie Mae’s Director of Economics & Multifamily Research, this will be one of the largest supply increases in the past decade. Most of this growth will be concentrated in ten metros, and as many of you have might guessed, most of this new supply will be for luxury Class A units. (Multifamily Executive)
The industry trend towards new luxury development has been going on for years.
In 2012, only half of all new apartment builds were considered high-end. In 2017, 79% of all new multifamily construction were luxury builds (Yardi Matrix).
A recent Bloomberg article aptly described the situation, “Tenants are gaining the upper hand in urban centers across the U.S. as new amenity-rich apartment buildings, constructed in response to big rent gains in previous years, are forced to fight for customers.”
Luxury communities are competing against more properties than ever for a small, high end portion of the rental market.
If you’re in charge of marketing a luxury community, you might be feeling the affects of this increase in supply. Now more than ever, luxury communities need to take a strategic approach to their marketing efforts. As a leading multifamily marketing agency, we’ve developed and executed successful apartment marketing strategies for many luxury communities. In this guide, we share ideas, advice, and observations from experts throughout our agency to give you our best insights into how to successfully market a luxury community.
Understand Your Place in the Luxury Apartment Market
Understanding the market surrounding your community is important for every multifamily development, but for a high priced luxury product, it is even more crucial. In the luxury rental space, your market is influenced by who can afford your community. In the past, when luxury inventory wasn’t as concentrated and competition was less of a factor, it might have been enough to just focus on appealing to wealthy individuals.
As this market becomes more saturated, high-end communities have a greater need to distinguish themselves from their competition. Not everyone capable of affording a luxury apartment is interested in one and not everyone interested in a luxury apartment in your area is going to care about your amenities and design aesthetic.
Start out your marketing process by researching your local market. The following market research questions will provide you with a great foundation to draw upon when developing your marketing plan.
What are the needs and desires of high income renters in your location? Which are you positioned to serve the best?
Are you serving any unmet needs or desires in your local luxury apartment market?
What are the current interests, purchasing behaviors, and online habits of your ideal renter?
Develop Your Marketing Strategy
Once you know your local market and what your community’s unique value proposition is, you’re ready to develop a marketing strategy. This involves selecting your marketing channels, devising your targeting parameters, and honing in on your key messaging.
One of the best ways to reach your target market is to show up when they are actively searching for a luxury community in your area. To do this you need to make sure you are visible in the most popular search engine, Google. While there are ways to take advantage of free traffic in Google (registering your business with Google is one we highly recommend), most communities, especially those in competitive luxury markets, need paid search ads to keep their community at the top of the search engine.
Data Driven Display
Banner campaigns are one of the best forms of advertising to use when you need to scale your brand awareness efforts. These highly visual ads show up when someone in your target market browses a website with ad placements on their desktop, tablet or mobile device. The main purpose of this form of advertising is to drive awareness of your brand, any concessions you are offering, and to visually communicate the most important value propositions of your community. This is a top of the funnel marketing approach that works best in combination with other advertising methods. Our studies (and outside research) have shown banner ads lead to more organic google searching for your community.
Social Media Advertising
Social media ads allow you to show up in the feeds of your target market. For a luxury community, the best social platforms to advertise on are Facebook, Instagram, and YouTube. Ads created within these three platforms are highly visual which helps show off the artfully designed interiors and desirable amenities that luxury communities offer. The targeting options that exist in Facebook, Instagram and YouTube are robust and offer communities the ability to zero in on the interests and behaviors of people in the luxury market.
Video content can help to showcase the appeal of a luxury community. Higher quality visual content gives the impression of a higher quality community.
Once you’ve attracted prospects to your website using awareness building campaigns you can launch retargeting campaigns to keep these prospects interested in your community. Retargeting campaigns can be created using Display Banners that follow website visitors around the web and in Facebook and Instagram.
Email campaigns are another great way to follow up with leads. If you are hosting an event, offering a concession, or looking to drive leads to take a tour, email campaigns can help you communicate to a targeted list of people using high end design and copy.
Through audience targeting you can allocate more of your marketing spend towards reaching the renters who are the most likely to be interested in your community. This is where your market research comes into play.
Take this example:
A community is located in a high-end neighborhood that is well known for its restaurant scene. The community is walking distance to some of the best restaurants in town. The community knows that locals like to be near these dining options and typically go out to eat with friends 3-5 times a week. They hire the best catering companies at resident events and host the local wine club in their lounge.
How can this community apply this information to their ad targeting efforts?
For starters, it’s important to point out that different platforms have different targeting capabilities.
In Google ads, most of the targeting options are based on the keywords you bid on. For Paid search you can build location specific luxury campaigns. When we set up these campaigns we typically bid on luxury, penthouse and high-rise focused keywords to capture renters actively looking for
You can apply the keyword targeting you used in your luxury paid search campaign in YouTube. The platform also allows you to expand your targeting efforts to include people who are in market for an apartment, live near the community, and have an interest in restaurants and wine. You can also target people interested in specific places, websites and apps.
For our Facebook and Instagram campaigns we use detailed psychographic targeting that aligns with people who may be interested in a higher price point apartment. Fine dining is an example of an interest targeting option we might use for a client like the one described above. We might also try targeting people interested in specific local restaurants who are ready to move and people who participate in wine clubs.
Copy and imagery provide communities the opportunity to communicate who they are to prospective renters. The more targeted your marketing approach is, the greater the opportunity for crafting messages that will convert.
Design elements go a long way in communicating luxury. Our typical approach to communicating luxury in our banner and email campaigns is to use design elements that compliment the aesthetics of the community and highlight the location. Aerial shots of a high rise in the city or of a lakeside community tend to perform well and help emphasize a key unique selling point.
When it comes to video content, the most important thing to showcase is the look and feel of your community. Our recent apartment video content research found that communities receive the best video ad results when they incorporate both tour and lifestyle content (you can read the results of our study here). We recommend incorporating shots of your amenities, common areas, and neighborhood to communicate the lifestyle your community creates alongside a unit tour.
For our Facebook campaigns we use carousel ads that include images and copy that showcase the luxury amenities offered by the community. With Paid Search we create ads that mention luxury in the ad copy and highlight community features with call out and structured snippet ad extensions.
Let’s go back
In Facebook and Instagram we’d incorporate images of the neighborhood, the interior of the apartment, the lounge, and maybe an additional amenity like a spa or pet park. In the ad description we might say, “Live steps away from award winning restaurants, cafes and bars. Invite your friends to hang out at our rooftop terrace or join us in the lounge for our monthly wine tasting events. Experience a life of class, convenience, and community in the heart of (insert location). Schedule your today!”
Wherever possible, you want to make sure you are clearly communicating what sets the community apart and what life is like for renters who live there. Social media ads and email campaigns give you the most space to convey this kind of lifestyle messaging. Copy that tells a
Measure and Optimize Your Marketing Efforts
It is important to develop clarity around what you want to achieve with your marketing efforts. The campaigns and platforms you choose and the way you optimize them will in part be determined by the objectives you set at the beginning of your marketing strategy. As you run your luxury apartment marketing campaigns, you will want to keep track of metrics that will give you an indication of how you are performing towards your objectives.
We use the following metrics to determine the overall success of a comprehensive digital marketing campaign.
Paid Website Sessions
The objective of most ads is to deliver as much qualified traffic to a community’s website as possible. Website sessions in Google Analytics track the total number of website visits a campaign brings in. Luxury apartment marketing campaigns require a greater emphasis on the quality of leads than on the quantity. The market overall is smaller and the advertising approaches tend to be more targeted. Overall sessions is a great first metric to evaluate if your ads are bringing in website visitors but further analysis is required to determine if the traffic you are bringing in is qualified.
Some top of the funnel awareness campaigns, Targeted Display and YouTube
Average Session Duration
This is a website session quality metric that allows you to see how long an average website visitor stays on your site. This metric can be evaluated on a campaign basis. Google Analytics lets you compare how different sources of traffic compare in their ability to bring in website visitors that stay on the site for a long time.
If a campaign that is conversion focused is bringing in website visitors with a high bounce rate, that may be an indication that the campaign isn’t bringing in quality traffic. The bounce rate reflects the rate of people who visit a website and exit the site right away. One thing to look for with a luxury community is how high the bounce rate is on the floor plan page since that is where most communities present their pricing. If the bounce rate is too high, modifications can be made to your targeting to help bring in more qualified traffic.
Phone calls, contact forms submissions, application completions, and chat leads are all conversion metrics communities can track in Google Analytics to further evaluate the effectiveness of their marketing efforts. We explain these metrics in depth in this blog post.
Luxury apartment marketing campaigns are a living, breathing entity. The more you invest in marketing, the more you learn about what works best for your community. Over time, marketing channels and tactics may evolve but the core strategy of understanding your market fit, diversifying your marketing efforts and utilizing targeting will help your community stand out in the luxury apartment market for years to come.
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Are you interested in using the marketing channels and tactics in this article to bring traffic to your luxury community? Reach out to one of our multifamily marketing experts here.