The conversation generally goes like this: "My overhead is killing me. I can barely make a living doing real estate". The old adage does hold true that 20% of any industry makes 80% of the money. Or does it? In the Internet world it may not!

The one thing that the Internet has delivered on is the turning of this old standby rule on its head. The reason is simple; not all of the 20% are getting the job done on the Internet. In fact, it is likely that the top 2% are making 98% of the money. This means that there is plenty of room for real estate professionals to get on board and set the table for significant future revenue growth. But, just how can you do this? What differentiates that 2% from the other 98%?

A large percentage of web site owners still believe that the Internet is a magical place; that all that is required is for you to have a web site; that advertising isn't needed; that you hire outside help to maximize your search engine position; and so on and so on. The result is that they become disappointed with the results of this lack of effort and then put even less effort in because they don't see the point of it.

Well, now is your chance to take advantage of this situation and exploit it to your benefit. Assuming that you already have your web site, the next most important thing is to maximize your advertising dollars. You don't need a $5000 budget to be successful but there are 5 traps that you must avoid at all costs:

Mistake #1 - Decide to play in the big leagues with the big leaguers
Want to advertise on Yahoo!? Do you have $5,000 sitting around doing nothing? For the average web site owner the major search engines are out of reach. Also, arguably, the major engines are not suitable at all given that the strategic partnerships that they enter into detract from other ads on any page. Concentrate on getting your site well positioned in their directories and keep your money for spending elsewhere.

Mistake #2 - Hitch your wagon to pay per click search engines!
There has been much written about the value of pay per click engines and how performance based services make sense. The problem is though that as a pay per click engine becomes more popular, so do the keywords that you want to bid on.

The result is that over time, pay per click engines can only become more expensive and your return on investment decreases. The more eggs you put in this basket the less successful you will be over time unless you are prepared to spend more and more. Remember that moving your bids from $0.01 to $0.03 triples your budget!

That is not to say that they are not a good option. Quite the contrary, most pay per clicks let you control your costs. The problem is that as they become more popular you will have to spend more and more or risk losing your traffic. Be aware of this future problem and plan accordingly.

Mistake #3 - Spread your ad dollars across a variety of types of web media
By spreading your dollars out across a wide number of areas you will receive very little value. General indications are that your ad needs to be seen 3 - 4 times or more prior to a user potentially clicking on it. With advertising it all comes down to a formula of how little you can spend to receive the greatest return.

Concentrate your ad dollars in industry specific web sites that will drive directed traffic in front of your ad. This is much like a store only you have a simple message board in the window. The chances of people seeing your message board are much higher if the people walking by the store are interested in what's in the store!

The same is true for your advertisements. If you are a real estate professional, ensure that your advertisements are on real estate related sites because the visitors to that site are interested in your product.

Mistake #4 - Set your budget and exceed it!
OK, so you've set up an advertising campaign and you are spending within your limit of $X a month. Now, the click throughs are OK but there are no sales, no forms being filled in, etc. You think that more exposures will return more visits so you decide to double the budget. Surprise! The clicks increase but still no sales, no forms filled in, etc.

This is not an uncommon situation. Unfortunately, it does not correct itself and it does not get corrected through a budget increase. This is caused by one of 2 failures in that either the ad is wrongly placed or, alternatively, your site doesn't accomplish its main job of attracting AND keeping customers.

In both situations the answer is not to increase your ad budget. The answer is to fix the problem. Assuming that your site is OK, you must consider changing where you spend your advertising budget. Otherwise, you are like the lonely gambler playing a slot machine who loses $200 and then argues that he has to play more because he is certain to win.

Mistake #5 - Don't have an advertising budget at all!
As a real estate professional you are likely spending money each and every month on promotional items. From pens, to fridge magnets, to business cards, to bench signs, you spend the money because it helps people know who you are and what you can do to help them.

Why is it then that you won't spend any money marketing your site on the Internet? More and more people are relying on the search engines to deliver all of their traffic for free. Well, here's a shock for you. Within the next year or so, most of the major search engines will force you to spend money just to get listed.

We are already starting to see this development with Yahoo!, Inktomi, Looksmart and Go all moving towards a fee for indexing arrangement. As a result, if you don't prepare a budget of some kind, you will be forced to even to get the most basic of service, your site listed.

Conclusion
Whether it is $100 a month or $2,000, planning an advertising campaign is essential to the success of your business in the long run. Also, having your ad budget in place and fully accounted for can help you be positioned before your competition gets caught off-guard by future changes to search engines. This can only help you in the long run to be more successful and increase your overall income on an effective basis.

Ron Thibeault is a retired real estate lawyer and contributing Editor to ThinkRelo.com. His extensive experience in real estate law gives him valuable insight into the needs of clients, realtors and all other players in real estate transactions.