Setting up a Real Estate Marketing Budget: How Much Should You Spend?
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Want to grow your real estate agency this year? Then make sure you set aside resources and develop a real estate marketing budget to reach more potential clients.
A few years ago, there were more than 300,000 real estate firms in the U.S. We can expect that number to have grown significantly since then. With such a high level of competition, you must diversify your marketing approach to expand your reach.
It isn’t a question of whether it’s worth paying for your marketing efforts anymore; instead, it’s about how much to spend to achieve your marketing goals.
That is what this guide is for—to help you allocate your budget so you can make the most of your marketing dollars and ensure you don’t lose out on any opportunities to reach your client base.
How Much Should a Realtor Spend on Marketing?
According to the National Association of REALTORS®, 70% of brokers and 69% of sales agents have a website. NAR members use their sites for listing properties and providing helpful information about buying or selling properties.
But having a website is not enough. You need to market your services off-site, too. Creating a real estate marketing budget is the first step to take so you can determine how best to reach your target audience.
There are many misconceptions about real estate agents, like that they drive fancy cars and get million-dollar commissions. For most realtors, though, that isn’t the case. As mentioned above, there is a high level of competition in the industry. Plus, are a lot of costs associated with becoming a realtor and running an agency.
When it comes to setting aside a real estate marketing budget, the consensus in the industry is that it should be equivalent to 10% of your commission income. This should be enough to cover digital and traditional forms of marketing.
But the answer to how much should a realtor spend on marketing is not definitive. It is only a suggestion to help you identify how much to allocate to your marketing efforts. You can spend as little as $2,000 per year or as much as $80,000.
Pinning down an amount for your marketing budget will ultimately depend on your available resources and your income. But according to research from Deloitte, businesses that invested in digital marketing enjoyed up to 20% more in annual revenue. The investment you make in marketing will pay itself off in the long run.
What Should You Include in a Real Estate Marketing Budget?
Once you create your real estate marketing budget, the next step is to determine how to use that budget. There will be two types of marketing costs here:
- One-off expenses
- Ongoing monthly costs
It’s important to understand where you allocate your funds so that you can achieve your marketing goals.
Website Design & Development
Without a doubt, your real estate firm should have its own website. That’s because a website serves as the main source of information about your services. So, if you don’t already have one, it’s crucial that you invest in quality website design and development.
A high-conversion website is intuitive and easy to use. It should look professional and be simple to navigate. Make sure to allocate a portion of your budget toward site maintenance to keep it functioning properly and efficiently.
PPC
Pay-per-click (PPC) advertising is one of the best and fastest ways to drive traffic and sales online. It begins with keyword research so you can identify the phrases people use to search for services like yours. Then, you select and bid on which keywords to trigger your advertisements.
It’s typically easier to reach more prospects with this advertising method than organic search alone. Therefore, it’s worth including PPC in your real estate marketing budget and overall strategy.
Social Media
Social media marketing is another critical element to include in a real estate marketing budget. This includes hiring someone to post regularly on your social media pages, as well as
Run social media ads. Be sure to identify parameters for the ads based on your target audience and demographics to be most cost-efficient.
Content Marketing
Content marketing is still one of the front-runners for marketing your business online. People are constantly looking for information on the web, and you can leverage content marketing to target those users.
Your real estate marketing budget should include the costs associated with content production for blogs, newsletters, guides, videos, and so on.
In addition to those tactics listed above, you can get more ideas to improve your online presence and grow your following from the following blogs:
- Real Estate Marketing Tips: How to Grow Your Following – Part 1
- Real Estate Marketing Tips: How to Grow Your Following – Part 2
Why Should Your Budget Be Reassessed Over Time?
Marketing is not a one-off activity. It’s an ongoing process that should be constantly nurtured, developed, and reassessed. And the same goes for your budget.
The primary reason you must reassess your real estate marketing budget is to stay aligned with your firm’s year-to-date progress. Use the data and insights from your previous year’s marketing efforts to assess how well your current strategy is working.
Based on that data, you can make informed decisions about your marketing budget and growth (or lack of it). When assessing your budget, you need to answer these questions:
- How much have you spent on marketing for the past year?
- What is the percentage of return?
- Have you met your revenue goals?
- What are the projections for the adjusted budget?
The assessment and adjustment should be made periodically to ensure that the correct course of action is taken to meet, if not exceed, your marketing goals. By making timely modifications, it can positively impact your revenue potential.
Why Is Creating a Real Estate Marketing Strategy Essential?
Strategic planning is vital for any business, not just in the real estate industry. According to Harvard Business School Online, 90% of businesses fail to meet their strategic targets due to a lack of planning.
Creating a strategy is essential to see a return on your real estate marketing budget and investment. A marketing strategy outlines what you need to do to achieve your goal, whether it is to increase revenue or get more business inquiries.
The strategy will then inform what tactics you will employ to execute your plan. For example, your marketing strategy might include allocating a huge portion of your budget toward social media or PPC advertising since these are two channels that have delivered results for you in the past.
Needless to say, having a well-formulated strategy helps to align your marketing activities and prioritize them according to your desired results. Moreover, it also helps define accountability in terms of the timelines for your marketing initiatives.
Why Should You Hire an Outside Marketing Team?
When you create a real estate marketing budget, you obviously want to see results. However, just because you spend money on marketing doesn’t guarantee that it will be fruitful for your real estate firm.
Not all real estate professionals are marketers or have extensive marketing knowledge. This is part of why many fail even when they have allocated a budget for marketing their firm.
An outside marketing agency can help. They bring in the expertise that your team lacks in terms of identifying your target market and developing a marketing strategy that will help your marketing message get to the right people. Implementing marketing tactics is not enough without a good strategy in place.
Here are some of the reasons why you should hire an outside team for your real estate marketing:
- You are unsure of the right marketing approach to use.
- Your business has stalled or stopped growing.
- You don’t have time for marketing.
- You need expert guidance.
- You aren’t skilled at capturing and analyzing data.
At Viral Solutions, we not only have the knowledge and expertise you need but also use data and insights to make crucial marketing decisions. You can leverage that power to maximize your real estate marketing budget.
Final Thoughts
With proper planning and execution, your marketing strategy could be what propels your real estate firm to success. Make sure to invest time in planning your real estate marketing budget so you are spending the amount that will work best for your company.
Your marketing approach should be tailored to your goals and the availability of resources. Take advantage of our free marketing audit for your real estate business so you can determine which areas of your marketing plan need attention to maximize your real estate marketing budget.
At Viral Solutions we are committed to seeing YOU succeed. It is our goal to grow your business with proven digital marketing strategies that will help your business for the long haul.
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