One of a the biggest mistakes a real estate agent can make is neglecting to see value in marketing their brand with a sufficient advertising budget.
Successful marketing campaigns can increase awareness of your brand, your business and your income. But how do you determine just how much of your annual income to allocate to marketing? Below we outline three steps to determine just how much you should budget for your advertising efforts.
- Observe market trends – To understand what marketing strategies are worth investing in, take some time to analyze market trends and compare your company with others in the industry. Look at marketing efforts from similar companies, both online and offline, to determine where companies in your industry advertise and how much they spend. Understanding the ad budgets of comparable companies in your industry can be valuable insight for developing your own budget.
Calculate a percentage – Look at your average annual income and consider how long you’ve been in business. Younger companies rely heavily on aggressive marketing plans to increase brand awareness and drive revenue. If your company is five years old or younger, experts suggest devoting between 12 and 20 percent of gross revenue to marketing. For older companies, brand awareness and a profitable customer base have already been established, meaning these companies can allocate a slightly smaller budget to advertising efforts, between six and 12 percent of gross revenue.
- Determine the when, where and how – When, where and how should you spend your marketing budget? Your initial observation of market trends and other comparable companies advertising strategies can be a great starting point to determine where to spend your marketing budget. Once you know where you want to spend your marketing dollars, how much should you spend in each place? With the rise in online marketing, it can be assumed that a significant portion of your budget will go to online marketing efforts, and Forrester Research provides great insight into how your online budget should be allocated:
- Search engine marketing, including keyword optimization, requires the most significant online spending, capturing about 14 percent of total marketing budgets.
- Display advertising, like banner ads and re-targeting, is the next largest, taking ten percent of total marketing budgets.
- Social media marketing is relatively cheap, but by no means free: Most companies devote two percent of their total marketing budgets to maintenance on social sites.