STATE OF THE NATION

Digital marketing trends in self storage in Australia and New Zealand by Michael Dogger R6 Digital.

The Digital marketplace is more competitive than ever with an increase in competition and spending in the storage industry.

While advertising spend on digital advertising has increased in all industries, spending in the storage industry has increased at a higher rate than the average – there seems to be increased awareness of the need to spend money on digital marketing after a slower start and larger operators in the industry have increased their digital spend to meet the market.

Larger storage operators tend to blanket broad areas, meaning smaller sites can get caught in the crossfire. For example, large players might bid a high cost per click for a whole area, so a small site in a relatively small area needs to spend big to get number one ad placement in their area. No different to any other big versus small business approach.

Will a slowdown affect digital marketing?

Despite early warning signs of a global economic slowdown, the possibility of a recession is not keeping advertisers up at night too much. Advertising spending has continued to rise across the globe, with digital driving most of the growth.

“Jonathan Barnard, head of forecasting at Zenith Media says ‘The advertising market is underperforming the economy, but we don’t think that’s because advertisers have stopped investing. Instead, we think they’re investing in other areas like advertising technology, data and ecommerce.”

In 2019, worldwide digital ad spending is projected to rise by 17.6% to $333.25 billion and for the first time, digital spend will account for roughly half of the global ad market. Australia is over the average with 57% of all ad spend going to digital, and New Zealand is close behind at 54%. Self storage still works even in a downturn, it did in the GFC and will again when business does slow down and it will someday.

Google ranking

There has been some big changes this past year in the way that Google ranks websites. For a long time Google has had a few indexes that it used to rank websites – there was a desktop ranking and a mobile ranking algorithm. For the first time – the mobile ranking algorithm is the main ranking factor for websites. Most websites moved to this index earlier this year, meaning how your website looks on mobile actually determines your desktop ranking. If your website is still not mobile friendly then you will expect to drop in Google rankings. This is because mobile views are continuing to rise. For example, in July 2019 mobile visits doubled, and up to now, over 65% of all visits to storage facility websites are from a mobile phone.

Http vs Https.

Websites need a digital certificate to authenticate the website and if your website still starts with http:// then it does not have a digital security certificate. Sites with a certificate outrank sites that google considers “not secure”. Sort that out with your web developer today.

Ads with phone number extensions generate 36% more phone calls than those that have no number on the ad. People might call on the website itself but at a much lower rate.

There has been a global increase in ad blocker usage from 142 million to an estimated 615 million devices. Interestingly this doesn’t seem to be impacting ad views, as 65% of people click on Google ads versus organic. AdWords remain as a key lead generator and whilst some may advocate search engine optimisation only, without an effective Adwords campaign funded and running could lead your business to miss up to 65% of traffic. Rentals in self storage from AdWords are still on the increase.

Self storage learnings

Google Ads with offers in the main heading achieve a 3-4% increase in Click Through Rate (CTR). If you have an offer like – “50% off first month”, 3-4% more people click on that ad than a more generic Ad listing “Self storage space available” etc. Make sure your Ads have an offer to instantly increase the amount of people that will click though to see your offering.

The average increase nation-wide for CPC or cost per click advertising has

risen by 21% and is higher in capital cities, driven by two factors: 1. Larger groups have increased their budgets using the blanket campaigns to bid a high cost per click over larger areas. 2. More competition – extra sites now promoting on the AdWords platform.

Self storage cost per move in

There has been approximately a 70% increase in cost per move in in 2019, whilst cost per click (CPC) is only up 21%. Sites with effective digital campaigns have enjoyed more inquiries coming in, but the conversion rate of facilities has dropped overall. With increased discounting, increased competition and customers shopping around getting more quotes, a decrease in conversion rates for facilities can be expected. An unintended consequence of the factors of competition and growth of the industry.

It’s not all doom and gloom though! There is a strong correlation between the number of leads a site receives and the amount invested on ad spend. Many operators have a set ‘budget’ for ad spend, which is a concept drawn from non digital advertising, our research shows that there is plenty of interest for self storage spaces and taking a “I am only going to spend XYZ” for ads can mean that there are leads missed.

When sites adopt a “cost per move in” model, consider how fast you want to grow. For example, if it costs $150 per move in and you are ok with that, then you might spend as much money as you can to get as many leads as you can at that price. This can mean a doubling or even tripling the ad spend, but with double to triple the leads, filling up your facility will happen faster. You can control growth with advertising spend.

The percentage of leads coming in from AdWords compared to SEO is on the rise

We think a combination of SEO and AdWords is important as part of the overall digital mix. Whilst AdWords as a percentage of leads has risen from 44% to 54% in the last year, the trend of Adwords growth continues which ensures the Google AdWords platform isn't going away anytime soon.

From the owner perspective many hope that their investment in their organic rankings will eventually mean they don’t have to spend on AdWords, Search is dominated by google and it is increasingly unlikely that organic ranking will deliver the results.

RapidStor Online move in insight

Mobile views of online pricing have increased from 40% to 60% in the last year and there was a corresponding reduction in desktop views. More people are looking to book self storage online on their phones than ever before.

Average page views sit at around 1.5%, i.e. 1.5% of people that view prices complete a full reservation or booking. Some facilities get as high as 4% when they fine tune compelling offers. There alone is the key takeaway – offers work. On average, customers take twice as long to do online bookings on computer, having sorted their rental with real intent to rent as distinct from phone calls

To conclude, self storage operators are selling space in an increasingly competitive and more expensive digital marketplace. Reliance on leads generated digitally is increasing and is a function of the strong growth of the industry. Reliance on discounting rather than unique offers and selling points and targeted digital advertising will continue to impact investment returns. l

R6 Digital(r) is a full service digital agency based in Brisbane and is a SSAA service member with key staff with many years of self storage experience. For more information contact sales@r6digital.com.au or visit the website.