The other day I received an email from a real estate professional who explained that he had stopped using pay-per-click advertising (via Google's AdWords and Yahoo's Overture) to market his real estate website because "it was too expensive."

Despite the advertising being profitable, the cost per lead was more than he wanted to spend.

If you don't know it already, this is not a smart idea for anyone marketing a real estate website.

In marketing, expense is somewhat irrelevant. Just about the only thing that matters (online or offline) is whether or not your advertising is profitable. If you get $2.00 back in results for every $1.00 you are sending out in advertising, why would you stop doing it?

Granted, there are limits due to overall budget, etc., but that's not the point here.

The real key to success with pay-per-click (or any) advertising is to track everything you do. That way, you will be able to spot the winning ads, kill the losing ones and make your money go further. Luckily both Google and Yahoo make this type of tracking pretty easy to do.

But beware, in pay-per-click advertising it is easy to view the "click" as the result. That's what you pay for after all.

Don't fall into that trap. The "click" is not a result, it is an opportunity - an opportunity for you to turn it into a result.

So instead of just tracking clicks, you need to dig a little deeper and track conversions.

What is a conversion?

A conversion is whatever you decide it to be - maybe a CMA request, maybe a newsletter signup, or maybe even a listing. Regardless of what your goal is for your real estate website advertising, make sure you are tracking exactly how many clicks turn into real results for you.

Sounds like common sense right? After all, what type of business owner would spend money on advertising without tracking the results? In my experience, a whole lot of them.

So back to the email and the real estate professional I mentioned at the beginning of this article...

What exactly is the problem with him dumping the more expensive advertising (in his case pay-per-click) and sinking all of his resources into the cheaper ways of marketing his real estate website?

The problem is that you should never put all of your advertising eggs in one basket. And you shouldn't dump advertising that is profitable.

Diversity leads to stability. It is better to have your real estate website traffic coming from 10 different streams than one huge river. Getting traffic from 10 sources means that if 2 of the sources dry up, you have a very small problem.

If you only have one source and that dries up... well, now you've got something more like a catastrophe.

So mix and match... Some of your advertising will be more expensive than the rest. As long as you are constantly tracking and reviewing the profitability of your various advertising methods, you won't lose.

Jason Leister, the Real Estate Technology Guru (tm), is owner of Computer Super Guy, LLC, a Chicago-based technology firm that helps real estate professionals profit with technology.

Visit the Real Estate Technology Guru to subscribe to our free monthly eZine, ProfIT, and receive a FREE copy of our special report "The Truth About Real Estate Websites and Search Engine Optimization."